Nestle pays $14.6 million toward Swiss banks' Holocaust settlement

VEVEY, Switzerland (AP) – Food giant Nestle said Monday it is paying $14.6 million toward a settlement with Holocaust survivors and Jewish organizations to meet possible claims over the use of slave labor during World War II.

"It is either certain or it may be assumed that some corporations of the Nestle Group that were active in countries controlled by the National Socialist (Nazi) regime employed forced laborers," the group said in a statement.

It said it would contribute to a $1.25 billion settlement agreed upon by Switzerland's two largest banks.

"Nestle expects this contribution to cover all possible legal claims that might be raised against it both in Switzerland and abroad," the statement added.

Nestle companies operating in Germany and Austria will make voluntary contributions to those countries' foundations to compensate slave laborers, it said, but did not specify amounts.

Some Swiss companies allegedly used slave labor in German subsidiaries or subsequently took over implicated German companies. Nestle has said that it acquired a company in 1947 that was suspected of using forced labor during the Nazi era.

The two banks – Credit Suisse and UBS AG – reached their out-of-court settlement in August 1998. This provided for the release of all claims not only against the two banks but also against the Swiss government, the central bank, other commercial banks and Swiss industry.

But when U.S. District Judge Edward Korman approved the settlement July 26, he said that Swiss entities which seek releases from slave labor claims should identify themselves within 30 days.

Switzerland's main employers' organization urged any company which might have used forced labor to come forward.

Nestle said that in many instances, it did not own the corporations that used forced labor at the time, and it was "often not possible to exercise effective control" over those that it did.

"As the legal successor of such corporations, Nestle nevertheless accepts its moral responsibility to help alleviate human suffering," the company said.