At the World Economic Forum in Davos, I gave Nestlé chair Peter Brabeck, a present – an original, signed copy of The Baby Killer, the 1974 report that I wrote for War on Want.

The Baby Killer explained how multinational milk companies like his were causing infant illness and death in poor communities by promoting bottle feeding and discouraging breast feeding.

Our Swiss associates were less subtle. They titled the report "Nestlé Toten Babies" (or Nestlé Kills Babies), which a Swiss court found was libelous. On the substance of the argument, however, the judge warned Nestlé that if the company did not want to face accusations of causing death and illness through sales practices such as using sales reps dressed in nurses' uniforms, they should change the way that they did business.

That shocked the company and undermined its benevolent self-image. It also launched a long-running global campaign, proving that networked social action was possible even in snail mail days.

Nestlé boycotts spread from Switzerland and Britain to the US, where shareholder activism and court challenges against other milk companies – led by the Sisters of the Precious Blood, a religious order working under the umbrella of the Interfaith Centre for Corporate Responsibility – achieved a fine balance between grassroots organising, legal process and catchy communication.

The campaigns attracted wide-spread support from medical professionals, health authorities and civil society in developing countries. So in 1981, the UN World Health Assembly (the governing body of the World Health Organisation) recommended the adoption of an international code of conduct to govern the promotion and sale of breast milk substitutes. Global regulation of consumer industries was – and remains – a threat to business. UN resolutions are "soft law" that have little direct effect, yet often lead to hard national enforcement.

Back then, Nestlé's response was that their critics should focus on doing something to improve unsafe water supplies, which contributed to the health problems associated with bottle feeding. I spent 30 years doing just that in Mozambique, South Africa and elsewhere. So it was appropriate that water brought me together with Brabeck.

I don't like the way companies such as Nestlé promote bottled water, turning one of life's essentials into a brand that only the better-off can afford and undermining the value of public supplies in the process. But I have to acknowledge Brabeck's efforts to get business and governments to work together to manage and protect the world's vital water resources.

However, for Nestlé and the rest of the global food industry, the baby milk scandal has grown up rather than gone away. The industry today stands accused of harming the health of whole nations, not just their babies. New York mayor Michael Bloomberg has committed his own money to a campaign against unhealthy food, comparing this to his fight against the tobacco industry. The WHO faces opposition to proposals from the NGO Global Action for Improved Nutitrion to establish partnerships with industry. What started as skirmish in the nursery is turning into full-scale war on many fronts.

While the diseases are now obesity, diabetes and heart disease, the issues about the food industry's responsibility remain the same: its huge marketing budgets clearly influence peoples' behaviour, even if direct causality can't be demonstrated. Children and young adults may get fat because they do not get enough exercise. But if they are offered and encouraged to "choose" super-saturated fat diets, dosed with excessive salt and drinks laced with multiple sugars, can the industries that produce and promote those products absolve themselves from the ugly outcomes? Back in the 1970s, the Swiss judge ruled to the contrary. Today public and political opinion is again swinging in that direction.

Important questions are being raised in discussions about the new global development goals to be adopted when the UN's current Millennium Development Goals 'expire' in 2015. Should sustainable development goals focus on the unsustainable and unhealthy lifestyles of the rich as well as on the plight and basic needs of the poor? As the world searches for better measures of development than gross domestic product (GDP), counting dead babies remains an important indicator. But if infant mortality was a stark indicator of poor infant feeding practices in the 1970s, gross obesity is a parallel indicator of poor nutrition today. And action to control the products and marketing of large food companies are an obvious means to improve people's health.

So the spectre of global regulation still looms, an existential issue for the global food companies. "Ethical investors" now turn for guidance to the FTSE 4 Good index, which screens company behaviour. But there will need to be more explicit codes of practice and the political will to enforce them if shareholder action is to be effective. If global companies are to produce and promote healthier food and treat their suppliers more fairly and remain market leaders, such standards must also be enforced or cheap unregulated competition will inevitably undermine those who comply.

Critics of the global food business also face challenges. Realists know that a return to a bucolic world of trusted small-scale local food production cannot meet the needs of seven billion people today and more tomorrow. But should activists build on existing regulatory platforms by raising the bar, setting new standards and mobilising shareholders to promote a more responsible and accountable global food industry? Or should they take a more aggressive approach to monitoring and acting directly against damaging behaviour? We will probably see a mix of both strategies, making the food business a challenging place to be over the next few years.

Back in Davos, my dedication to Brabeck was simple. Reading the Baby Killer report today showed that we had made progress since the 1970s, I said. I thanked him for his support on the global water agenda, and I meant it. Of course there are many places around the world where Nestlé's operations are challenged by workers and communities, for many valid reasons. But in an imperfect world, at least some of the immediate issues are now on the table for public discussion and he has helped to put them there. I could perhaps have added the Mozambican adaptation of that old revolutionary slogan: "Victory continues – the struggle is certain". But, however accurate, that would have spoilt the moment.

Mike Muller is an engineer, writer and development specialist. Currently a member of South Africa's National Planning Commission, he is also a visiting professor of public and development management at the University of the Witwatersrand University in Johannesburg. As director general of South Africa's Department of Water Affairs, he designed and led a programme that has brought safe water to over 16 million people since 1994

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