Categories
The Coffee Watch and China Labor Watch report Ghost Farms and Coffee Laundering uncovers serious labour abuses in Starbucks’ and Nestlé’s Chinese coffee supply chains, particularly in Yunnan Province. Undercover investigations found child labour, excessive working hours, lack of contracts, unsafe conditions, and wages averaging only USD $421 per month compared with Nestlé’s CEO’s USD $13 million annual salary.
Workers endured 12-hour days, seven days a week during harvests, with no paid leave, health insurance, or protective equipment. Gender discrimination, unsafe agrochemical exposure, and exclusion of Indigenous and ethnic minority groups such as the Wa, Hani, and Lisu were widespread. Many abuses directly violated Chinese law, as well as Starbucks’ C.A.F.E. Practices and Nestlé’s 4C certification schemes.
The report highlights how coffee from “ghost farms” with no direct contracts is “laundered” into global markets through certified estates, undermining ethical sourcing claims. This structural loophole allows brands to promote sustainability while benefiting from exploitative conditions.
China’s coffee sector is expanding rapidly, with Starbucks planning 9,000 stores in China by 2025 and consumption growing 30 percent annually. Without urgent reforms, the combination of booming demand, weak enforcement, and exploitative procurement will deepen systemic abuses.
The report calls for Nestlé and Starbucks to abolish piece-rate pay, introduce direct contracts with all workers, ensure living wages, and provide programme support to protect labour rights, Indigenous communities, and the credibility of ethical certifications.
