in the Infant
Enforced Self-Regulation
Formula Industry: A Radical Extension
of an "Impractical"
Proposal
JurgGerber
Introduction
CONTROL OF CORPORATE CRIME and deviance is one of crim?
inology's most perplexing issues. There seems to be consensus that
corporate crime is prevalent, that it is serious in nature, and that
means of controlling it need to be developed. However, there is some dis?
agreement over how this is to be achieved. Some recommendations concern
various reactive measures. These range from the increased use of civil law in
THE
prosecuting corporate offenses (Harvard Law Review, 1979) to Fisse and
Braithwaite's (1983) suggestion thatmuch corporate deviance could be elimi?
nated by subjecting offending corporations to adverse publicity, both formal
and informal.
Proactive measures
have emerged in recent years as an alternative and
to
controlling corporate deviance. Proponents of such
supplemental approach
solutions maintain that changing the law, or the legal sanctions associated with
violations of law, alone will not effectively control corporate deviance. In?
stead, corporations themselves have to be transformed. Suggestions include
Stone's (1975) call for public directors on boards of large corporations who
would represent the public interest,Vaughan's
(1983) recommendation to re?
duce transaction complexities in corporations, and the demand for stronger
business ethics as the key to long-term control of corporate crime (Clinard et
al., 1979).
What is true for control of corporate crime in general holds especially true
for corporate crime and deviance in a multinational context. In such a setting,
inconsistent national legal codes and the absence of a trulypowerful transna
isAssistant Professor of Sociology at theUniversity of Idaho, Moscow,
Idaho,
JURG GERBER
83843. In addition to his research on the infant-formula controversy, he has written on theWar on
Drugs. This is a revised version of a paper presented at the 1988 Meetings of theAmerican Society
of Criminology, Chicago, Illinois. This research was supported in part by a grant from theUniver?
like to thank Susan
The author would
1989 Seed Grant: 681-Y919).
sity of Idaho (Fiscal Year
Weeks, Eric Jensen, John Braithwaite, Jim Post, and Jim Short for comments on earlier versions of
this article.
98 Social Justice Vol.
17,No.
1
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Enforced Self-Regulation in the InfantFormula Industry
99
tional governmental agency further exacerbate the difficulty of controlling
corporate behavior, whether criminal or unethical. Because conventional ap?
proaches, which center on the criminal justice system, are thereforedifficult to
implement, non-traditional approaches have to be considered. Unfortunately
these potential (but allegedly impractical) solutions have been more or less ig?
nored in the debate on how to control corporate crime and deviance.
?
Braithwaite's
This article analyzes one of these "impractical" solutions
?
for
enforced
of
call
(1982)
by focusing on a
corporations
self-regulation
particular case study: theNestle Corporation's monitoring by theNestle Infant
Formula Audit Commission (NIFAC). Braithwaite's model of enforced self
regulation is presented in the next section, followed by the history of the infant
formula controversy and the creation of NIFAC. Next, the adequacy of NIFAC
as an example of enforced self-regulation is discussed. Special attention is
given to themultinational nature of Nestle's business transactions. Some rec?
ommendations as to how NIFAC
(or a similar body) should be changed to
serve as a model for other corporations and industries are explored in the
conclusion.
Enforced Self-Regulation
After detailing the need for a corporate control model that diverges from
conventional criminal justice approaches, Braithwaite (1982: 1470-1471) de?
scribes his model of enforced self-regulation as follows:
Under enforced self-regulation, the government would compel each
company to write a set of rules tailored to the unique set of contin?
gencies facing that firm.A regulatory agency would either approve
these rules or send them back for revision if theywere insufficiently
stringent.At this stage in the process, citizens' groups and other in?
terested parties would be encouraged to comment on the proposed
rules. Rather than having governmental inspectors enforce the rules,
most enforcement duties and costs would be internalized by the com?
pany, which would be required to establish its own inspectorial
group. The primary function of governmental inspectors would be to
ensure the independence of this internal compliance group and to au?
dit its efficiency and toughness....
Governmental involvement would not stop atmonitoring. Violations
of the privately written and publicly ratified rules would be punish?
able by law.
Although thismodel may sound radical, Braithwaite argued that it is not.
Even though there are no current instances of true enforced self-regulation,
"incipient manifestations of the enforced self-regulation model" (Ibid.: 1483
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100
Gerber
1490) can be found in numerous industries. Civil aviation safety is regulated
in all countries by publicly enforced private rules. Likewise, according to
Braithwaite, some enforcement activities of the Environmental Protection
Agency resemble the enforced self-regulationmodel. Such examples illustrate
the stipulation of:
public enforcement of privately written rules. But the full enforced
self-regulationmodel requires more; it also mandates governmentally
monitored internal enforcement of the internallywritten rules (Ibid.:
1486).
There are some cases that come close to this requirement. The Food and
Drug Administration, for instance, requires pharmaceutical companies to ad?
here to its "Good Laboratory Practices," a set of guidelines thatwere exter?
nally written but are internallyenforced.
The relative strengths and weaknesses of enforced self-regulation are also
discussed by Braithwaite. The former include, among others, the fact thatrules
would be tailored tomatch the company, that rules could be adjusted quickly
to new circumstances, and that compliance would become the path of least
corporate resistance. Among thepotential weaknesses are the cooptation of the
regulatory process by businesses, thewriting of rules by companies in such a
way thatwould assist them in evading the spirit of the law, and possibly the
calling into question of the independence of the compliance group.
NIFAC
and the Infant Formula Controversy
As documented elsewhere (Gerber and Short, 1986; Gerber, 1988), for
nearly two decades infant formula and themarketing practices of itsmanu?
facturershave been the focus of public attention. Few nutritionists question the
product's nutritional adequacy if it is prepared properly. Critics, however,
?
have questioned whether conditions in the developing world
including high
?
are
rates of illiteracy and poverty
conducive to proper preparation of infant
formula.Unable to buy sufficientquantities of formula,many women attempt
to make it last longer by diluting it, a practice that frequently leads to
malnutrition and even death. Health hazards are furtheraggravated by the fact
thatdrinking water is often contaminated in less-developed countries. Bottle
fed infantsmay thus be doubly endangered by exposure to bacteria thatwould
not be transmitted in breastmilk and by being deprived of immunities gained
in breast feeding.
A variety of marketing practices have also drawn sharp criticism from in?
fant formula activists and the general public. Particularly objectionable was
the employment of women designated as "mothercraft nurses" who were, in
reality, sales people. Hired by themanufacturers to promote company prod
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Enforced Self-Regulation in the InfantFormula Industry
101
ucts, these women "advised" mothers on breast and bottle feeding. In order to
increase their credibility, the women frequently dressed in white clothing,
which gave them the appearance of nurses (Muller, 1974: 5). Mothers received
free samples from mothercraft nurses and other company representatives
(Ibid.: 11-12). As a result of using the samples, mothers were sometimes un?
able to resume breast feeding, thus becoming dependent on breastmilk
substitutes.1
Even though none of these corporate behaviors violated criminal or civil
statutes in any country,2 they attractedmuch public attention. As we showed
elsewhere (Gerber and Short, 1986; Gerber, 1988), this publicity led some
corporations, including Nestle, tomodify theirmarketing practices.3 This pro?
cess of generating publicity was initiated in 1971 with the publication of
"Commerciogenic Malnutrition?" (Jelliffe, 1971), a brief article on themal?
nutrition resulting from the profit-maximization strategies of corporations.
Articles in popular magazines and a report by a British journalist, entitled The
Baby Killer (Muller, 1974), followed. Shortly thereafter,a Swiss activist orga?
nization published a translated version ofMuller's report under the titleNestle
Kills Babies (Arbeitsgruppe, 1974). The titlewas deliberately selected in order
to attract public attention since it forced Nestle to respond (Arbeitsgruppe,
1976: 11). Though the original report had singled out Nestle (along with a
British corporation named Unigate), Nestle considered this title too provoca?
tive and sued the activists for libel, thereby unwittingly providing their critics
with a public-relations victory. Nestle eventually won that suit, but at the cost
of being subjected to public scrutiny.
In 1974, the controversy spread to theUnited States, where the Interfaith
Center on Corporate Responsibility (ICCR) focused on themarketing of infant
formula (Ermann and Clements, 1984). In an attempt to counter criticism,
Nestle coordinated with other corporations in announcing the formation of the
International Council of InfantFood Industries (ICIFI) and its "Code of Ethics
and Professional Standards" (Arbeitsgruppe, 1976: 118). Although this code
was immediately criticized because itwas vague and ambiguous (Scott, 1980:
629-633) and because "it was written so as to admit no wrongdoing" (Post and
Baer, 1978: 25), it did represent something of a milestone. Though flawed in
design, itwas intended to be a means of self-regulation of the industry,appar?
ently the first such undertaking.
In early 1977, the InfantFormula Action Coalition (INFACT) was formed
inMinneapolis.
INFACT's
stated goal was to initiate "a national campaign
aimed at changing the practices of theAmerican companies and the Swiss gi?
ant,Nestle" (INFACT, 1984: 4). After operating in a low-key manner for sev?
eral months, INFACT announced a boycott of Nestle products on July 4,1977,
charging thatNestle had remained unresponsive to its critics. Conditions for
rescinding the boycott included the halting of all mass-media advertising and
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102
Gerber
the discontinuation of the practices of distributing free samples and hiring of
mothercraft nurses (INFACT, nd[a]: 6).
For the next four years, INFACT, as theprimary representative of thevari?
ous activist organizations opposed to the industry,and Nestle, as the primary
target, jockeyed with each other for position in their battle for publicity.
INFACT staged its version of theBoston Tea Party (the Boston Nestea Party),
initiated campaigns focusing on Nestle Halloween candy, and organized a se?
ries of "ironing board actions." The latter involved setting up ironing boards in
malls and on sidewalks, handing out pamphlets, and asking people to sign pe?
titions.At the same time, INFACT was successful in obtaining boycott en?
dorsements from a variety of church groups (e.g., the National Council of
Churches), health organizations (e.g., theAmerican Medical Student Associa?
tion), and many other groups.
Nestl? countered such activities with a vigorous campaign of counter
publicity. Its actions included an aggressive advertising campaign, publication
of literature and pamphlets, and lobbying the governmental and quasi
governmental agencies thatbecame involved in this struggle, such as thePan
American Health Organization and UNICEF. At least one Senate subcommit?
tee held hearings on the issue of infant-formulamarketing in developing
countries (United States Congress, 1978). Of the agencies involved, themost
important was theWorld Health Organization (WHO), which became in?
volved in part as a result of a request by Senator Kennedy (the chair of the
Senate subcommittee conducting the hearings). Starting inOctober 1979, a se?
ries of meetings and conferences was held under the auspices ofWHO, during
which a code regulating themarketing of infant formula was drafted.
InMay 1981, the 34th session of theWorld Health Assembly, the ruling
body ofWHO, convened inGeneva, Switzerland, to debate the "International
Code ofMarketing Breast Milk Substitutes." The goal of the code, which was
subsequently adopted by a vote of 118 to 1 (with theU.S. casting the only dis?
senting vote),
is to contribute to theprovision of safe and adequate nutrition for in?
fants, by the protection and promotion of breast feeding, and by en?
suring the proper use of breastmilk substitutes,when these are neces?
sary, on the basis of adequate information and through appropriate
marketing and distribution (World Health Organization, 1981, Article
1).
Because itwas passed only as a recommendation tomember governments,
the code did not legally proscribe any corporate practices. At the same time, it
detailed both practices no longer considered acceptable and the roles that in?
dustry, governments, and activists should play in achieving compliance.
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Enforced Self-Regulation in the InfantFormula Industry
103
Although this code was opposed by most infant-formulamanufacturers,
Nestle's original position is a matter of dispute. The company claimed to have
endorsed it on the day itwas passed (Nestle Coordination Center forNutrition,
1983: 1). INFACT maintained thatNestle publicly stated twomonths later that
itwould not follow the guidelines (nd[a]: 16). Nevertheless, Nestle imple?
mented the code unilaterally on March
16, 1982. Concurrently, Nestle an?
the formation of the Nestle Infant Formula Audit Commission
stated purpose
(NIFAC). Formally organized inMay of that year, NIFAC's
nounced
was
to:
examine complaints and allegations about Nestle's marketing prac?
tices and to satisfy itself thatNestle is honoring its publicly stated
recommen?
commitments in relation to the application of theWHO
dation (NIFAC, 1982a).
Edmund S. Muskie, a former Secretary of State and U.S. Senator, was re?
tained as chairperson of NIFAC.4 In order to ensure NIFAC's
independence
from the corporation, Nestle offeredmembership on the commission to critics
of the industry. As a result, Dr. Robert Campbell, head of the American
Baptist Convention, became a member (Nestle Coordination Center for
Nutrition, 1983: 2).5
Concurrent with these actions, Nestle issued instructions to its personnel
based on theWHO Code (Nestle Coordination Center for Nutrition, 1982).
"to compare the Nestle Instructions with WHO's
NIFAC then asked WHO
interpretationof the Code" (Ibid.). WHO ultimately published its "Notes on
the International Code of Marketing of Breast Milk Substitutes," which
NIFAC converted into specific recommendations and sent toNestle to amend
its instructions.Nestl6 accepted these recommendations on October 14, 1982,
and sent out revised instructions (Ibid.).
Although Nestle's critics acknowledged that the company had made some
changes, they characterized them as insufficient. INFACT argued thatNestle's
revised instructionswere "seriously inadequate, permittingmany promotional
International Code" (INFACT,
techniques prohibited by theWHO/UNICEF
1982: 1). Nevertheless, INFACT agreed to submit reports of alleged violations
toNIFAC along with other organizations thatmonitor Nestle's corporate be?
havior. By the end of 1982, for instance, NIFAC had received 78 reports of
re?
alleged violations (Ibid.: 2). Even though INFACT was willing to submit
and
effectiveness.
to
role
the
latter's
it continued
ports to NIFAC,
question
The boycott was continued "because there is no real institutional agreement
normonitoring system to assure thatNestle follows theCode scrupulously and
permanently" (INFACT, nd[b]: 1).
This process of interaction continued until January 1984. INFACT and
other activist organizations criticized Nestle for falling short of the recom
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104
Gerber
mendations in theWHO Code. They remained wary of NIFAC because it did
not act "as an objective judge of Nestle's actions, but rather as a defender of
theNestle position" (INFACT, 1983: 1). For instance, the procedure devel?
to evaluate specific complaints against Nestle proved to be
oped by NIFAC
relatively cumbersome, according to the activists. In this procedure, activists
would submit a report of an alleged violation of theWHO Code, Nestle was
given a chance to respond, and the activists were then offered an opportunity
toprovide a rejoinder. Only after completion of these steps did NIFAC issue a
finding.The activists complained that such a lengthyprocedure served to ob?
fuscate the issues. They also complained that even at the end of this process
a request that could not be
NIFAC would often require more information?
honored due to limited resources. Also, NIFAC could not sanction Nestle in
anyway, which meant that the activists had no effectivemeans of monitoring
the company. Notwithstanding such criticisms, INFACT continued the dia?
logue with Nestle and NIFAC and submittedmore reports.
Subsequently, Nestle's critics acknowledged thatprogress had been made.
INFACT published a list of demands thatNestle would have tomeet for the
boycott to end (INFACT, 1984: 1). On January 24, 1984, Nestle agreed to do
so during a joint press conference with INFACT and the International Nestle
Boycott Committee (INBC).6 The boycott was suspended for a period of six
months, with the provision that itwould be permanently abandoned should
Nestle remain in full compliance with theWHO Code (Murphy, 1984: 3).
Throughout the spring and summer of 1984, representatives from Nestle
and activists met on a regular basis to iron out the remaining differences. After
WHO proposed a plan that eliminated these differences, the Nestle Infant
Formula Controversy was temporarily resolved. Nestle and INBC issued a
joint statement announcing the terminationof the boycott. The published doc?
ument also called on INBC "to continue to observe carefully Nestle's market?
ing practices and cooperate with NIFAC in the investigation of allegations of
violations of theWHO International Code" (Angst and Young, 1984).
Although serious charges have been levied against Nestle and other corpo?
rations since then (see Tanner, 1984; Multinational Monitor, 1985; 1987), and
consumer actions against Nestle have now been resumed, the end of the origi?
nal Nestle boycott represented an important turningpoint in the controversy.7
Particularly relevant was the role of NIFAC
rate behavior
and, more
specifically,
in controlling questionable corpo?
the role of self-regulation of
corporations.
NIFAC
as an Example
of "Enforced"
Self-Regulation
Nestle established NIFAC after it pledged to unilaterally implement the
Code in all developing nations in which it sells infant formula.
on Article 11.3 of the code:
Specifically, itbased the founding of NIFAC
1981 WHO
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Enforced Self-Regulation in the InfantFormula Industry
105
Independently of any othermeasures taken for implementation of this
Code, manufacturers and distributors ofproducts within the scope of
this Code should regard themselves as responsible for monitoring
theirmarketing practices according to theprinciples and aim of this
Code, and for taking steps to ensure that their conduct at every level
?
conforms to them (World Health Organization, 1981, Article 11.3
emphasis added).
Such language is not strong enough tomeet Braithwaite's (1982: 1470) vi?
sion of enforced self-regulation: "...the government would compel each com?
pany...." However, although Nestle was not legally forced to establish an in?
dependent watchdog group, it could not afford to ignore the controversy.
Nestle had been losing the publicity battle against its critics. Consequently, the
boycott had negative consequences, both material and nonmaterial, forNestle.
Nestle was thus forced to respond in a way thatwould lead to positive public?
ity. In thewords of a currentmember of NIF AC, Nestle leaders:
needed to demonstrate theirwillingness to hold theirmarketing prac?
tices open to public scrutiny.The way to formalize that commitment,
and make itvisible and manifest, was to create a commission of this
sort (personal conversation).8
thereforenot a governmental agency that compelled Nestle to set up
NIFAC, but rather a combination of negative publicity and the demand of a
quasi-governmental agency, theWorld Health Organization. In the absence of
a powerful transnational governmental agency, negative publicity may be a
Itwas
major weapon in controlling the behavior ofmultinational corporations.
In other respects, Nestle and NIFAC approximate Braithwaite's model of
enforced self-regulation. Nestle prepared marketing instructions based on the
1981WHO Code, sent them toWHO for comparison with the code at the re?
quest of NIFAC, and subsequently revised these instructions in accord with
WHO and NIFAC recommendations. Throughout, the public interestwas well
represented by the various activist organizations that negotiated with both
WHO and Nestle (see Braithwaite, 1982: 1470).
Enforcement of Nestle's commitment to the code is partially financed and
executed by Nestle and NIFAC, and partly by the activists. The model of en?
forced self-regulation foresees the internalization of most enforcement duties
and costs. This has been done to the extent thatNestle fully fundsNIFAC, and
members ofNIFAC or its staffdo on-site inspections. NIFAC did considerable
fieldmonitoring early in its history (consult itsquarterly and annual reports),
but it is now criticized for having "done no independent monitoring...since
1984" (Gaschott, 1988). The on-site inspections that take place are now con?
ducted almost exclusively by activists and church groups. Nonetheless,
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106
Gerber
NIF AC continues to receive reports of alleged violations of the 1981 code for
investigation and thus still performs the function ofmonitoring Nestle's corpo?
rate behavior at least to some extent. Itmust be emphasized, though, that seri?
ous problems remain. NIF AC receives many fewer complaints today than
before because the activists no longer seem to have much faith in NIF AC.
Given the slowness of the review process, NIF AC is again being seen as a de?
fender of Nestle rather than as an independent monitoring body (see Gaschott,
1988).9
Although NIF AC thus appears to have failed to control Nestle, the situa?
tion is complex. One of the chief responsibilities of enforced self-regulation is
to ensure the vigilance and independence of the internalmonitoring body.
Normally, thiswould be the responsibility of a governmental agency and its
inspectors (Braithwaite, 1982). However, there are no transnational govern?
mental agencies with real power over corporations such as Nestle. Organiza?
tions such as theEuropean Economic Community and theUnited Nations are
at best only semi-governmental bodies. Though theyhave regulations thatpro?
scribe certain corporate practices, the absence of effective sanctions make
these regulations relatively ineffectual.The control of a Swiss-based corpora?
tion such as Nestle proves to be even more elusive because Switzerland is a
member of neither theUnited Nations nor the European Economic Commu?
nity.Nestle thus engages in business all over theworld, but is subject to few
international regulations.10 As such, an unconventional approach (i.e., one that
?
Braithwaite's
is not centered in the criminal justice system) has to be used
model. It also explains why the latterneeds to be modified to include activist
organizations. It is their responsibility to fulfill all the roles of governmental
agencies in Braithwaite's model. The organizations thatassumed these respon?
sibilities in the infant-formula controversy include INFACT, ICCR, theThird
World Action Group in Switzerland (Arbeitsgruppe Dritte Welt), and, more
recently, theAction for Corporate Accountability (an off-shoot and sister or?
ganization of INFACT).11 Because it seems unreasonable to hope for a power?
fulmultinational governmental agency to emerge, or for Switzerland to submit
itself to its authority, activist organizations thathave a multinational focus will
have to continue to assume this function in a revised model of enforced self
regulation.
Braithwaite envisioned a model of enforced self-regulation inwhich gov?
ernmental involvement would go beyond monitoring. Specifically, "violations
of the privately written and publicly ratified rules would be punishable by
law" (Braithwaite, 1982: 1471). This has not been the case in the infant for?
mula controversy. However, consumer action in response to negative publicity
constitutes some measure of "punishment." Whenever Nestle has fallen short
of its publicly stated commitments or the expectations of the activists, the lat?
terhave successfully attracted public attention to their claims. Consequently,
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Enforced Self-Regulation in theInfantFormula Industry
107
Nestle was compelled to respond to such unwanted scrutiny of its conduct.
The success of these activities was manifested in changes inNestle's practices
and the subsequent termination of the boycott in 1984. It remains to be seen
whether the activists will be able to generate sufficientpublicity for their sec?
ond boycott, which could once again induce Nestle tomodify itsmarketing
practices.
Conclusion
In sum, theNestle InfantFormula Audit Commission falls short of Braith
waite's model of enforced self-regulation, mainly because there exists no
multinational governmental agency capable of functioning in a supervisory
role. Nonetheless, "enforced" self-regulation may be a viable means for con?
trolling the behavior of multinational corporations. The infant-formula issue
presents an example of how this can be achieved. Corporations can be forced
throughnegative publicity to set up an internalmonitoring agency, one funded
by the corporations themselves. Activist organizations in various countries
in turnmonitor the agencies charged with self-regulation. Negative
publicity, along with consumer actions (e.g., boycotts), provide the sanctions
that the activist organizations control and can use against the corporations. In
essence, thismodel of "enforced" self-regulation entails a combination of two
ideas found in Braithwaite's writing: enforced self-regulation (1982) and the
use of publicity in controlling corporate behavior (Fisse and Braithwaite,
1983). In tandem, the two may provide one of the keys to solving the per?
plexing problem of controllingmultinational corporations.
I am not advocating that the present, revised model of enforced self
regulation is to be implemented as theprimary mechanism to control multina?
tional corporations. That clearly would not be feasible formany reasons, with
lack of resources among activist organizations being perhaps themost obvi?
ous.12 Control of corporations by a powerful transnational agency ismore fea?
sible in the long run, although such a solution would entail its own set of
would
problems (e.g., corporate capture of the regulatory agency). However, since
such an organization is not likely to come into existence considering current
political realities, something else has to be done in an attempt to control
transnational corporations. "Enforced" self-regulation might provide a partial
solution.
The present, revised model could be extended to entire industries. In the
infant-formula industry, a development has occurred that shows some
promise. On February 23, 1984, the International Association of Infant Food
Manufacturers (IFM) was established inParis. By 1988, themembership con?
sisted of 33 corporations from 17 nations (Infant Food Manufacturers, nd).
More importantly, IFM, which replaced the old ICM, has now instituted a
complaint review process that approximates thatof NIFAC. At this time, all of
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108
Gerber
these activities may not be much more than public relations efforts.This view
is held by several members of theAction forCorporate Accountability whom I
interviewed for this research (see also IBFAN, 1987: 2). Nonetheless, the for?
mation of IFM may prove to be a step in the right direction. If it expands its
activities to "include full-scale independent monitoring functions" (NIFAC,
1987: 4), it can become an example of themodified model of enforced self
regulation. Another necessary prerequisite would of course be the continued
use of negative publicity in order to force IFM to remain independent and
vigilant.
This model could also work for other industries. In thewords of a member
of NIF AC, the commission could serve as a model:
for industries...if
there
are
a continuous
issues...of
nature....
Selling
pharmaceutical products, for example, falls into the category of in?
dustries where
this could clearly be a model...
(personal
conversation).
The pharmaceutical industryhas been criticized for "dumping" hazardous
drugs in countries with national codes less stringent than those found inWest?
ern industrialized nations. Agreements reached between the industry and its
critics could be enforced by an organization similar toNIF AC.
NIF AC may also serve as an "inspiration" for industries such as the de?
fense industry. Cost overruns are a recurring problem in this industry and
mechanisms have to be devised to address this issue. A watchdog organization
likeNIF AC could assume such a role. In this case, themodel of enforced self
regulation could be implemented more easily because the problems caused by
themultinational relations of, say,Nestle would be less of a concern.13 On the
other hand, legislation mandating the creation of a NIFAC-like group seems
unlikely, given the existence of a military-industrial-governmental complex
(Mills, 1956). Consumer activism, combined with negative publicity, may be
thebest hope for effective control of a variety of corporate behaviors.
NOTES
1.
2.
(IBFAN,
For additional problems, both use and marketing related, see Muller (1974).
to the International Baby Food Action Network
is no longer the case. According
This
1988b),
some countries
practices.
3. For a detailed
ing, consult IBFAN
4.
Muskie
have
now passed
legislation
listing of current corporate practices
(1988a).
was retained as the chair because
that outlaws
certain marketing
in the field of infant-formula market?
"an international figure, with high credibility
(Veraldi, 1988: 121).
among the groups supporting the boycott, would be needed"
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Enforced Self-Regulation in theInfantFormula Industry 109
of NIF AC was broadened in subsequent years to include other critics
instance, James Post, management
professor at Boston University and
author of several papers on the controversy, was added to the commission.
6.
INBC was at that time a coalition of organizations
that sponsored boycotts of Nestle
products in 10 countries (France, Germany, theUnited States, England, Norway, Sweden, Canada,
5.
The membership
experts. For
and outside
Australia, New Zealand, and Finland). ENBC changed its name from the Nestle Boycott to Inter?
national Negotiators for Babyfood Code Compliance upon completion of theNestle boycott.
7. Nestle was warned during the summer of 1988 that a boycott of its products would be
it changed itsmarketing practices significantly (Mantell, 1988). After it had
with the 1981 WHO Code for a period of time, the corporation started to en?
gage in questionable practices again. Nestle representatives in theThird World no longer hand out
free supplies, but have allegedly found other ways to evade the spirit, ifnot the letter, of the code.
reinstituted unless
been in compliance
Reports indicate thatNestle "sells" supplies to hospitals but "forgets" to collect the payment. The
Action for Corporate Accountability
challenged Nestle to stop such practices, but did not receive
an answer fromNestle that itconsidered acceptable. On October 4,1988, activist leaders called for
the resumption of the consumer boycott of Nestle and a new boycott of American Home Products
(Action, 1988).
8. The present research is part of a larger project on the organizational development of one
of the activist groups, INFACT. Both telephone and face-to-face interviews have been conducted
for this purpose. The
summer of 1988.
9.
Some
conversations
of Nestle
of the corporation. Witness
that are referred to in this article were
conducted
during the
as a legitimate monitoring agency
's critics have never accepted NIFAC
the following indictment of the commission by a long-term activist:
was formed by Nestle to defeat the boycott and was carefully constructed with
that intention inmind. So [NIFAC] has got nothing to do with solving the problem, and
my goal is solving the problem. I have never considered it a legitimate or respectable
NIFAC
organization, although it has three or four people who are clearly committed to the
same goal as I am.... Nestle has chosen to respond [to its critics] in a public relations
is another
way. They have always refused to respond in a substantive way and NIFAC
public relations response (personal conversation).
10.
Switzerland has so far refused to join such organizations because doing so would re?
?
a claim that is not universally accepted.
quire it to violate its pledge of neutrality
INFACT no longer focuses on the infant-formula issue. Instead, ithas organized a boy?
11.
involvement in the production of nuclear
(GE) products in protest of GE's
(Gerber, 1988). Critics of the approach advocated here may point out that INFACT's
history proves that activist organizations do not have any "staying power," and thus this approach
to controlling corporate behavior cannot work in the long run. This criticism is not justified. Al?
as an organization moved on to nuclear weapons, many of its founding members
though INFACT
Thus, there ismore
stayed with infant formula (and formed Action for Corporate Accountability).
cott of General Electric
weapons
history implies. Furthermore,
continuity than INFACT's
IBFAN have displayed considerable stability as well.
12.
Writing more than 20 years ago, Akers (1968)
international organizations
such as
anticipated another problem of self
seek to regulate themselves not because of altru?
regulation: the fact that professional associations
such action would preclude external control. Clearly, the industry has
isticmotives, but because
and we need to recognize this fact. At the same time, this
attempted this (e.g., ICIFT, NIFAC)
as in conventional self-regulation. It is the function
problem does not seem as serious in enforced
of the supervisory agency to prevent such evasion tactics, according to the Braithwaite model.
issues involved in the defense industry that are not
There are, of course, multinational
13.
addressed here.
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Gerber
110
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Other Materials
Gaschott, Nancy
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