Term paper #2 Breach in ethics

 

    Whether you like it or not, unless you live under a rock you have heard of  Starbucks . Starbucks has an arrangement of coffees, teas, refreshers, Frappuccino, baked goods, and so much more.  The brand prides itself on the positive impacts that the claim to make around the world. One impact in particular is that Starbucks protection of human rights. On the website Starbucks states, "Our aspiration is to be people positive- investing in humanity and the well-being of everyone we connect with, from our partners to coffee farmers to the customers in our stores and beyond". However, in 2024 customers began to wonder if that was truly the case. It has been claimed that the farmers that produce the coffee for Starbucks have been known to abuse human rights. This has led to a breach in the ethics that Starbucks is so quick to brag about the company being so good at maintaining. 

       LegalClarity defines ethics as "the moral principles that guide an individual's behavior or the conduct of an activity." The website also stated "An ethics violation occurs when an individual or entity acts in a manner that deviates from establish more principles, professional codes of conduct, or societal standards of right and wrong. This behavior undermines trust and can lead to negative consequences for those involved." 

    In 2024, The The National Consumers League sued Starbucks for false advertising. The group believes that the company is misleading its consumers into believing that the coffee they are drinking is "100% Ethically" sourced. Even though Starbucks knows that they are purchasing from suppliers with "documented, severe human rights and labor abuses". 

    CEO of the National Consumers League, Sally Greenberg stated "On every bag of coffee and box of K-cups that Starbucks sells, Starbucks is heralding its commitment to 100% ethical sourcing, but it's pretty clear that there are significant human rights and labor abuses across Starbucks' supply chain." The lawsuit cities reports of human rights and labor abuses on coffee in tea farms in Guatemala ,Kenya , and Brazil that Starbucks as well as other well-known tea and coffee companies use. 

    The BBC even hired a undercover reporter to gather more evidence concerning allegations of sexual abuse on tea plantations in Kenya. As of 2023 more than 70 women had told BBC that they had been sexually abused by their supervisors. The undercover reporter was able to obtain video from a job interview to work on one of the plantations. The interview was held in a hotel room and during the interview Mr.Chebochok, who had worked on the plantation for more than 30 years, pinned the reporter against a window and then continued to pressure her into sex. Chebochok made statements such as "I'll give you some money, then I'll give you a job. I have helped you, help me" and "We'll lie down, finish and go. then you come back". The reporter made it clear that she did not consent and that she wanted out of the situation. Thankfully in her case she had a production team standing by that was there under the guise of making film about where the tea and coffee come from.

    In Guatemala unethical child labor was reported at plantations. Both Starbucks and Nespresso have claim that they have a "zero-tolerance" for child labor however it seems that they are all talk and no fact. In this case, a group posing as researchers scouting locations for a film that was to show where the coffee comes from went undercover to find out more. The reporters filmed children working long hours in horrible conditions. The reporter was told that the children worked up to six days a week and could work for eight or more hours a day. The children ranged in ages from as young as eight years old to around twelve years old. At the end of the day the children were paid depending on the weight of beans they had picked. It was reported that the children would earn less than 5 pounds per day which is equivalent to about six dollars. 

    During the investigation reporters went to seven plantations linked to Nespresso and five linked to Starbuck. Child labor was discovered at every single one. In a statement Starbucks said " We can confirm we have not purchased coffee from the farms in question during the most recent harvest season, and we will not do so until we can verify that they are not in breach of C.A.F.E practices- our ethical sourcing program developed in partnership with Conservation International that provide comprehensive social environmental and economic standards, including zero tolerance for child labor"  

    In 2004 Starbuck launched its own sourcing standards, called C.A.F.E practices. The program holds Starbucks coffee suppliers to more than 200 quality, labor, and environmental standards. Farms that do not meet these standards are not purchased from until corrective actions have been confirmed. Starbucks also uses a number of third-party companies that certifies that a farm is upholding standards. With all of these third-party companies overseeing that these standards are upheld is Starbucks really the one to blame? Or is it the third-party company? The Rainforest Alliance, a third-party that certifies Starbucks' supply chains, was sued in 2021 by a consumer advocacy group for "false and deceptive marketing" of Hershey's cocoa as "100 percent certified and sustainable." And even though it was the third-party company that was supposed to be checking that the standards are upheld the blame ultimately fell on Hershey. 

    Starbucks published a promotional video on its Coffee academy website. In the video a coffee buyers from Starbucks states the company's ethical sourcing stamp "means that we are buying coffee, making sure that it's good for the planet and good for the people who produce it." Along with the video Starbucks has repeatedly made statements denying any connection to the unethical sourcing of their tea and coffee. 

    As of now, the case is still in litigation and there has been no reported ruling or settlement announced. And as of now Starbucks has not been required to change its sourcing practices. It is unsure if the lawsuit alone is to blame for the companies operating income decreased by 22% in the first quarter of 2025 or if the company's other questionable decisions. Starbucks also revealed in its first-quarter earnings report for fiscal year 2025, that the companies Comparable store sales  in the United States declined by 4% and its comparable transactions also decreased by 8%.