Published: 23/10/2009

Nestlé’s Corporate Business Principles claim to “respect the right of employees to form representative organisations and to join – or not to join – trade unions, provided this right is freely exercised, and establish a constructive dialogue with these unions.”

Should employees need some guidance on this issue management is there to help.

Business is good at the Nescafé factory in Panjang, Indonesia. Three-quarters of the output is exported to developed countries. The company is hiring.

New hires are given two documents when they enter employment: the employment contract, and an application to join an organization called FKBNI. In accordance with the Corporate Business Principles, they are informed that they can join, or not join, to make sure their decision is freely exercised. This is as it should be, because the Corporate Business Principles state that “Nestlé aims to provide an example of good human rights’ practices throughout its business activities and has an interest in encouraging the improvement of social conditions, which are an important factor for sustainable development.”

In pursuit of these goals, Nestlé has even adopted a program of positive discrimination.

It’s not always easy to found a union of workers in Indonesia. Decades of authoritarian dictatorship and a notoriously corrupt legal system (even the World Bank has said it’s impossible to get a fair trial in the country) cast a long shadow at the workplace. Workers have reason to fear for their job security.

So in December 2007 Nestle brought 12 Panjang workers hundreds of kilometers from their home town to a luxury hotel in Jakarta to help found the FKBNI.

The timing was no coincidence. Since fall 2007, the IUF-affiliated Nestle Indonesia Workers’ Union – Panjang (SBNIP) representing the Panjang workers had been requesting negotiations for much-needed changes to the collective agreement. 2007 was a year of runaway inflation in the price of food and other necessities. The SBNIP wanted to negotiate wages as part of the collective bargaining process, and to have the wage scale included in the employment contract. They believe it’s a fundamental right.

Nestlé management claimed that wages were a “commercial secret”. SBNIP members were pressured into joining the FKBNI. Signatures were forged on membership documents. SBNIP members were visited in their homes, where the Corporate Business Principles and Nestlé’s adherence to the UN Global Compact were explained. Others were transferred, and placed under video surveillance. FKBNI members’ applications for education allowance for their children are approved; SBNIP members’ applications are rejected “for administrative reasons”.

Last year, the IUF filed a submission on behalf of the SBNIP with the Swiss National Contact Point for the OECD, whose Guidelines for Multinational Enterprises require transnational companies to adhere to internationally recognized human rights standards, including trade union rights. The submission pointed to fundamental breaches of the Guidelines and urged the National Contact Point to facilitate genuine collective bargaining at Nestlé Indonesia.

While the submission was being handled by the Swiss government, Nestlé corporate management turned to the local industrial court to impose a collective agreement. The industrial court has, predictably, issued an ultimatum: the union must submit to the collective agreement proposed by Nestlé, or revert to an even older agreement, and sign within 15 days. The agreement imposed by management merely prolongs the existing one, and does not contain a negotiated wage, or even reveal the wage scale, which remains a “secret.”

Nestlé has “conceded” that it might now be willing to negotiate wages in 2010 – but insists that SBNIP first sign the company’s 2008-2009 “proposal”, and that the FKBNI – the organization it created and nurtured to destroy the SBNIP – be included in the process. Meanwhile, management exerts daily pressure – Nespressure – on the SBNIP.

Despite the court order, there is nothing to stop Nestlé from entering into genuine negotiations NOW with the SBNIP for a new collective agreement. Nothing but its commitment to maintaining pressure on workers to weaken unions at Nestlé Panjang and around the world at the world’s largest food company.

STOP Nespressure and negotiate now! – CLICK HERE TO SEND A MESSAGE TO NESTLE!

To learn more about Nestlé, Nespressure and the fight back, visit