Ethical and sustainable coffee production is a major selling point for both micro-roasters and multi-national corporations alike. It’s why brands like Starbucks and Nestle—two of the world’s largest coffee companies—have created certifications to attest to the responsible production, both in terms of the land it is grown on and the people who work it, their coffees undergo.
But a scathing new report alleges that these two companies in particular aren’t living up to their own standards and that their coffee farms in China have “an environment characterized by excessive working hours without overtime pay, the presence of child labor, the absence of medical and health insurance, lack of safety gear, low wages, absence of paid leave, and exploitation of Indigenous peoples.”
Made in collaboration between Coffee Watch and China Labor Watch, the report is based on boots-on-the-ground undercover investigations at coffee farms across the Yunnan Province that supply coffee to Starbucks and Nestle. Throughout 2024, investigators made three different trips to the area and interviewed “66 individuals, including coffee farmers, their families, and teachers from schools attended by children of coffee-farming families” in order to “better understand child labor issues,” the report states.
They found instances of child labor as well as adult workers facing excessive hours—“roughly 12 hours a day, 7 days a week for 3 consecutive months”—with no paid leave, no compensation for statutory holidays, illness, or personal leave, no no medical insurance or safety equipment despite “grueling conditions, exposure to harsh conditions, agrochemicals, and occupational health risks.”
These violations run afoul of not only Starbucks’ and Nestle’s minimum ethical certification standards C.A.F.E. Practices and 4C, respectively, but also violate China’s labor laws.
But these coffees are still C.A.F.E. Practices and 4C certified, thanks to a loophole known as “ghost farms.” According to the report, transnational brands like Starbucks and Nestle buy coffee from large estate that have achieved the certification and “follow production and labor standards.” But these farms source their coffees from smaller, unregulated “ghost farms,” who don’t maintain the same standards, allowing the unethically produced coffee “to be ‘laundered’ into the global market under the guise of being ethically sourced,” per the report.
Coffee Watch and China Labor Watch make no allegations of Starbucks or Nestle being party to, or even aware of, the labor violations they found. Both companies provided statements to the Washington Post about the report, with Starbucks Director of International Communications stating that they are “committed to investigating thoroughly” the allegations and that the company’s supplier agreements “mandate that all farms maintain detailed records of their coffee production and purchases,” which implies that the company was at least aware that non-estate produced coffee was being purchased. Nestle’s Senior Corporate Spokesperson Claudia Alfonso that they “take these allegations very seriously and have contacted our suppliers to investigate carefully and if necessary, take corrective action.”
Still, the report states that this “recurring pattern of neglect and abuse in coffee certified by 4C and C.A.F.E. Practices (run by Conversation International for Starbucks) calls into question whether these certifications can genuinely serve as industry benchmarks or even be considered ethical standards at all.
Read the full Ghost Farming and Coffee Laundering report here.
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
