ETHIOPIA: Oxfam Ireland was claiming a victory for Ethiopia yesterday after one of the richest companies in the world backed down from a $6 million compensation claim against the government of the famine-stricken African nation.
Following considerable public outrage, food and beverages company Nestlé has reduced its claim on the government to $1.5 million and promised to donate the sum exclusively to famine relief in Ethiopia.
"This is a victory for Ethiopia and the public around the world who supported them in resisting Nestlé's claim," said Mr Colin Roche, campaigns officer for Oxfam Ireland, in a statement yesterday.
The country is battling devastating drought and the collapse of the coffee market which represents over half of Ethiopia's export earnings. In addition, around 11 million people are threatened with a famine that experts predict could be worse than the 1984 disaster which prompted Live Aid.
The Nestlé claim goes back to 1975 when the military regime in Ethiopia, the Derge, seized the assets of foreign companies. Nestlé did not own the nationalised company in question at the time but inherited the compensation claim when it took over the Schwelsfurth group in 1986. The German owners had a stake in the Ethiopian Livestock Development Company before it was seized by the Derge.
A campaign led by Oxfam and supported by a British newspaper resulted in the Swiss-based company being bombarded with 40,000 letters and many phone calls urging it to drop the compensation claim.
At first, Nestlé responded to the public concern by saying it was good for investment in the continent that African nations settle their debts.
However, the resulting public relations disaster saw Nestlé begin negotiating with the Ethiopian government on the matter. The company has now signed a memorandum of understanding stating that it will immediately hand over the $1.5 million compensation sum to Ethiopian aid agencies to combat famine.
In a statement, Nestlé bosses said the company was not interested in taking money out of a famine-ridden country. It added that it was looking at ways to assist in dealing with the famine and a delegation from Nestlé was in Ethiopia for this purpose.