Monster Beverage Corporation: Report on Slavery and Human Trafficking in Supply Chain
WHEREAS: An estimated 40 million people are victims of modern slavery, with 24.9 million in forced labor. These victims work in virtually every industry and across sectors in a company’s supply chain. According to the U.N. Guiding Principles, companies have a corporate responsibility to respect human rights within their operations and supply chains. The issue is seen as a material risk for shareholders due to potential litigation and loss of revenue by brand association with slavery.
The 2018, Know the Chain, Food & Beverage Benchmark Findings Report scored Monster at four points, acknowledging that Monster has improved over their 2016 score of zero. This shows that Monster has made some commitments regarding modern slavery. However, the commitments are not time-bound and Monster doesn’t disclose if any progress has been made. This reflects poor transparency and disclosure in managing human trafficking and forced labor risks in its supply chain. In contrast, Coca-Cola, Nestlé, and Pepsico, scored 62, 58, and 49 respectively. This is also reflected in the Corporate Human Rights Benchmark [Indicators D.1.5.b and D.1.5.d], which scored Monster only 1.2 out of 100, and a score of zero on indicators focused on addressing forced labor risks.
Monster Beverage ingredient lists contain sucrose and glucose, both are derived from cane or beet sugar. Forced labor is known to be present in the production of sugar cane in Bolivia, Brazil, Dominican Republic, Guatemala, India, Myanmar, and Pakistan according to the U.S. Department of Labor. Verité, an independent NGO, confirms the forced labor practices in the sugar cane industry globally. Monster has not disclosed what practices it has in place to address forced labor in these countries although nine other peers have done so according to the August 2017 report, “How Food and Beverage Companies Tackle Forced Labor Risks in Sugarcane Supply Chains.” The company also did not address forced labor risks related to the sourcing of coffee and tea.
Monster also does not report on Supply Chain Transparency or Monitoring and Certification. Peers including Coca-Cola disclose names and addresses of sugar suppliers as well as how they monitor sugarcane field working conditions.
Monster states that it does not conduct unannounced supplier compliance audits because of assumed minimal risk of slavery and human trafficking, yet there is no detail of how this was determined, and, regardless, it is not a rationale for non-disclosure.
BE IT RESOLVED: Shareholders request Monster Beverage to issue a report containing the criteria and analytical methodology used to determine its conclusion of “minimal risk” of slavery and human trafficking in its sugarcane supply chain. The report should be available by November 15, 2019, prepared at reasonable cost, and omitting proprietary and privileged information.
SUPPORTING STATEMENT: In its report Monster should consider following industry peers’ best practices for verifying that suppliers comply with its standards.