Mondelez International’s statement regarding the plans to create a stand-alone company for its Russian operations falls way short and is tone-deaf to B4Ukraine’s calls for a responsible business exit. Given the gravity of violations occurring in Ukraine, the American snacking giant needs to do more to live up to its human rights responsibilities.
The designation of the Oreo-maker Mondelez an “international sponsor of war” by Ukraine’s National Agency on Corruption Prevention (NACP) in May this year prompted a wave of boycotts of Mondelez’s products in Sweden, Norway and Denmark.
Feeling the pressure from the Scandinavian region and its own employees, Mondelez issued a statement on June 15th regarding its future business activity in Russia. Specifically, the company announced its intention to make its business in Russia “stand-alone with a self-sufficient supply chain by the end of this year.”
The idea of a “stand-alone” Russian business has been hailed by many media outlets as the long-awaited exit from Russia. In reality, the announcement calls for far greater scrutiny.
Will Mondelez retain a share in the local business or any profit accrued? How will it ensure the actions of the stand-alone branch do not contribute to the human rights abuses committed in Ukraine? These are just a few important questions the American snacking giant needs to clarify.
Operational independence may provide limited legal liability for Mondelez, but it does not excuse a lack of action under the UN’s Guiding Principles on Business and Human Rights. Such principles stipulate that any company involved in a conflict zone must conduct heightened human rights due diligence and exercise leverage over subsidiaries where they are linked to harm.
We eagerly anticipate further details from Mondelez, outlining the concrete measures that would distinguish this approach from “business as usual” and effectively distance the company from the Russian market. Mondelez’s key stakeholders, including investors, employees and consumers, have the right to understand the level of the company’s commitment to ethical business practices and its genuine efforts to address the concerns raised.
We agree with Mondelez that there are no easy decisions – however, there are right ones. We urge the Mondelez leadership to completely withdraw from Russia in order to no longer be associated with Russia’s crimes in Ukraine.
The continued Russian business operations of over 1,800 western companies from G7 and Switzerland points to the urgent need for governments to step in and provide better guidance to companies. Such advice would ensure that businesses are informed about the mounting risks of continued business operations in Russia and are taking steps to minimize them, including complete exits from the tarnished Russian market.