Answer to Question #207106 in Management for Pearl

Question

In March 2020 an exposé of Britain’s Channel 4’s Dispatches program revealed an ethical breach in Guatemala in which both Starbucks and Nespresso were involved

 1. Describe what the exposé found on the coffee farms and how both companies’ ethical principles were violated.

Answer 1

Starbucks was embroiled in a child labor controversy after Channel 4's Dispatches exposed the truth about the coffee farms that supply Starbucks and Nespresso with beans. Children as young as 13 were videotaped working about 40-hour weeks in dreadful conditions, picking coffee for a fraction of the price of a Starbucks latte or a box of Nespresso pods. The face of Nespresso, George Clooney, applauded Channel 4's inquiry while also expressing sadness over its findings. He has urged the board of directors of Nespresso to do more. A human rights lawyer alleges evidence suggests Starbucks and Nespresso violated international labor standards. Both Starbucks and Nespresso have launched investigations into the allegations. Less than 1p will go to the coffee pickers from the price they pay for the coffee.

Although it is unclear whether the Dispatches team videotaped the children during their summer vacation or when they were skipping school to work, both Starbucks and Nespresso have stated that child labor is forbidden at any point in their supply chain. When children are seven or eight years old, they begin helping with the harvest. Despite the fact that many campesinos pull their children out of school for other reasons, it's no surprise that Guatemala's school vacation coincides with the coffee harvest. The companies had not purchased coffee from the farms in question during the most recent harvest season, and they will not do so until they can verify that they are not in violation of C.A.F.E. Practices, a comprehensive social, environmental, and economic standard developed in partnership with Conservation International that includes zero tolerance for child labor.