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Nestle plans donation to Ethiopia

Millions of people in Ethiopia are facing starvation
Millions of people in Ethiopia are facing starvation

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Is Nestle justified in seeking damages from Ethiopia?


VEVEY, Switzerland (CNN) -- Nestle, the world's biggest food producer, plans to give any money it receives from a damages claim against Ethiopia back to the poverty-stricken country.

Chief Executive Peter Brabeck said the company was not interested in taking money from Ethiopia while it faced famine, so it would donate any proceeds to food aid for the country.

But he said on Monday that Africa would benefit in the long term if governments "demonstrate a capacity to comply with international law" by settling outstanding claims.

Last Wednesday, demonstrators besieged Nestle's UK headquarters demanding the company drop claims to collect $6 million from Ethiopia. The average person in Ethiopia makes less than $2 a day, while the Swiss giant makes about $6 million every hour, aid agencies say.

Nestle posted sales of $59.36 billion for 2001 and pre-tax profits of $6.15 billion.

Nestle's business in Ethiopia was seized by the previous regime in 1975. The company wants compensation although now it says it will reinvest any damages in the country, after five days of protests by aid agencies.

The Ethiopian government has already offered $1.6 million to resolve the issue.

Ethiopia is struggling with a famine that could see as many as 11 million people facing starvation, aid workers and government officials say.

Nestle remains a target for protesters in various parts of the world. The company leads many boycott lists because of controversy over its baby milk formula in the developing world. Nestle denies its milk products can harm infants' health.

In an attempt to improve its image, Nestle unveiled a set of principles in March.

But it says it was caught off guard by last week's protests over Ethiopia and admits it stumbled when it first said it wanted the bill paid in full.

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