Right of reply

[tinyjo]

Much to my surprise, I got a reply back from Nestlé this afternoon. The line was pretty much what you'd expect and very similar to that taken on the Today programme this morning. So, for those who want to know, here it is

We thank you for the e-mail you sent us to express your concern regarding
Ethiopia.

In view of the incomplete information in your possession, we would like to
provide you with Nestlé's point of view on this issue:




Nestlé Compensation Claim Against Ethiopia
Proceeds to be Invested Locally


The issue of the compensation negotiations between the Ethiopian
authorities, a unit of the World Bank and Nestlé has resulted in some
ill-informed comment by the media.

Nestlé believes the issue should be put into context:

In 1975, the then government of Ethiopia expropriated all foreign owned
corporations. Among them was ELIDCO (Ethiopian Livestock Development
Company), in which the Schweisfurth Group (Germany) held a majority
participation. Negotiations with the Ethiopian Compensation Commission were
started in 1978. In August 1998, ELIDCO was sold by the Ethiopian
government to a local private company for $8.73 million.

Nestlé acquired the Schweisfurth Group in 1986 and, as legal successor, also
inherited the compensation claims against the Ethiopian government. In 2001,
the authorities decided to settle the issue with the help of the
Multilateral Investment Guarantee Agency (MIGA) of the World Bank. Proposals
for compensation of the expropriated companies were made and negotiations
are on-going. These negotiations are presently concentrating on technical
points, such as exchange rates.

In the interest of the continued flow of foreign direct investment, which is
critical for developing countries, it is highly desirable that conflicts are
resolved according to international law and in a spirit of fairness. A
solution in this case will constitute an important step in re-establishing
the confidence of potential foreign investors, which is clearly in the
interest of the Ethiopian population and the country's economic development.
Nestlé will therefore continue to cooperate with the World Bank and with the
Ethiopian authorities in order to come to a solution.

Furthermore, Nestlé commits itself to invest the proceeds of the
compensation negotiation in a long-term, viable investment in Ethiopia which
will contribute to the economic development of the country.

As always, Nestlé will also respond to requests for help to alleviate the
suffering of the population that is presently threatened by the food
shortage.

Since they seem to have provided an email address specifically to discuss the topic, I thought I'd mail them back addressing a couple of their points -

[legal description snipped]

> In the interest of the continued flow of foreign direct
> investment, which is
> critical for developing countries, it is highly desirable
> that conflicts are
> resolved according to international law and in a spirit of fairness. A
> solution in this case will constitute an important step in
> re-establishing
> the confidence of potential foreign investors, which is clearly in the
> interest of the Ethiopian population and the country's
> economic development.
> Nestlé will therefore continue to cooperate with the World
> Bank and with the
> Ethiopian authorities in order to come to a solution.
>

I think that the threatening attitude of the opening of this paragraph is highly unlikely to endear you to campaigners who are not, perhaps, as ill informed as you would like to believe. If you intend to cooperate with the World Bank and the Ethiopian authorities why have you not accepted the $1.5 million compensation which the Ethiopian government has offered and the World Bank has endorsed as fair?

Furthermore, if you wish to help the people of Ethiopia through this time of famine, the most efficient method for you to donate, both in terms of time and money, would be to defer this matter until the crisis is past and Ethiopia is better able to respond to such claims.

Yours,
Jo Charman

I can't believe that they're trying to claim that it's in Ethiopia's best interests to be stung for $6m! Even the World Bank, a body not notorious for seeing the poorer country's point of view has said

This $1m in our opinion is justifiable. But this is not the point of view of Nestle. They are trying to get as much as they can

One point which I didn't think worth making to Nestlé at the moment was that I do think that companies like this, just as much as governments should be subject to the Jubilee 2000 campaign - I don't think asking Nestlé to write of a sum which is a tiny fraction of one years profit to them would be unreasonable. And, given the regime changes since the debt was incurred and the attitude of the current Ethiopian government, I don't really see that it would effect Ethiopia's prospects for forign investment either.

Comments

[tinyjo.livejournal.com]

Woo hoo! I should bloody well think so too :)