We invited consumer goods firms to comment on a summary of the findings from our plasma investigation. Here are their responses.
Kellogg is committed to working with our global palm oil suppliers to support the production of sustainable palm oil from sources that are environmentally appropriate, socially beneficial and economically viable. Anything less is not acceptable. In response to the information provided, we have initiated our grievance process to further investigate this issue in our upstream supply chain and coordinate with our suppliers to determine next steps.
We appreciate your bringing this serious issue to our attention. Responsible sourcing of palm oil through the implementation of our No Deforestation, No Peat, No Exploitation (NDPE) commitment, had been and remains a key focus for us and I assure you we will continue to act in this important area.
This [sic] industry issues relating to the provision of plasma in Indonesia is challenging as they are both complex and systemic and we appreciate any focus to try to address them at a cross-sector collaborative level.
Whilst we are not connected to these issues by direct supply, almost all of our direct suppliers have aligned NDPE commitments, and we use our PZC Supplier Non-Compliance Process to address any grievance case that comes to our attention. For the case allegations that you refer to, please can you provide details, including mill connection, to enable us to include the issue in this process, enabling engagement with our supplies to try to address the specific cases?
From our experience the discussion of specific cases is also a valuable way of then engaging more effectively with indirect suppliers for the wider systemic issue. We will be engaging with key suppliers to discuss and understand their approach for ensuring their FFB suppliers are compliant with plasma obligations.
A key element of our PZC 2023 Action Plan is ‘Transformation’, working in partnership with the Earthworm Foundation landscapes as Associate Sponsor in Indonesia. This strategic approach includes support with community rights and empowerment, conflict resolution management, land planning and tenure, government engagement on regulations and capacity building.
We are committed to working with partners to continue driving the adoption of responsible sourcing practices worldwide, and we do not purchase palm oil or palm oil derivatives directly from mills. We take these allegations very seriously and have initiated our grievance process to better understand the practices of the companies noted in the BBC report. All of our suppliers are expected to adhere to our Responsible Palm Oil Sourcing Policy and our Supplier Responsibility Standards.
PepsiCo is committed to sustainable sourcing. Our goal is to ensure that all our palm oil is free from deforestation, new development on peatlands, and exploitation of people. We take all allegations in our value chain seriously and work with our suppliers and partners to help enable effective remedies through our grievance mechanism. We will be investigating those named in this recent research and appreciate the thoroughness of the BBC, The Gecko Project and Mongabay. This is why PepsiCo continues to proactively make our mill and supplier lists public.
While Mondelēz International accounts for only about 0.5 percent of palm oil consumption globally, we have played – and continue to play – a leadership role in global industry advocacy toward sector transformation. For years, we have actively worked with our global suppliers towards sustainably sourced and fully traceable palm oil in our products. In fact, we were the first multinational consumer goods company to require suppliers to trace all the oil they sell, not just the oil they sell to us.
The Mondelēz International Palm Oil Action Plan details actions to achieve our goals to make sustainable palm oil the mainstream option, based on the principles that production should be on legally held land; not lead to deforestation or loss of peat land; respect human rights, including land rights; and not use forced or child labor.
Our Palm Oil Action Plan requires suppliers to:
To date, we have partnered and engaged with several of the leading global organizations focused on improving the palm oil supply chain.
Our work with these organizations is based on our view that the complex challenge of producing sustainable palm oil can only be solved through collaboration with all actors in the palm oil supply chain, from growers to suppliers and buyers, as well as local and national government and non-governmental organizations. We remain committed to achieving complete sustainability and transparency across our supply chain and the industry at large, and will continue to provide regular updates on our progress.
We’re in touch with our partners/experts to better understand the issue and how we might address in future with further public commitments. Our POAP, Human Rights report and public commitments & supplier expectations are consistent with partner/peers and generally support what it is you are advocating for. MDLZ has a goal of no-exploitation of local communities and has set general expectations to conduct business with integrity in their supplier codes of conduct.
1. Is Reckitt aware of problems related to plasma in its supply chain?
We are aware of the complex issues involving the provision of plasma in Indonesia, but we were not aware of specific grievances or allegations involving companies in Reckitt’s supply chain.
2. Do Reckitt’s NDPE policies address these problems?
Reckitt has detailed standards and policies that govern our actions, ambitions and expectations regarding labour, human rights, health and safety in our supply chains, as well as an additional natural raw materials sourcing standard. These standards are global in nature, and therefore do not address specific legislation in specific markets.
However, the sourcing standard does state that “Reckitt’s commitment to sourcing NRMs (natural raw materials) responsibly requires compliance with all applicable laws, regulations, and maintenance of necessary legal permits”. It also states that small-scale producers should be proactively included in supply chains wherever possible, and that such inclusion should ensure trust and transparency, avoid exploitation and improve livelihoods.
3. What measures would Reckitt take to check for plasma-related problems in your supply chain?
Within individual roadmaps we are developing with our palm oil suppliers, we will review and confirm the status of their plasma provision, and through these suppliers aim to ensure that a process for correct provision is in place in their supply chains. In addition to any activity that our direct suppliers make to confirm correct plasma provision, we will also include this in our own audit approach in conjunction with partners such as Earthworm Foundation.
We know that the companies involved – at least the two the BBC has identified for us – are not direct suppliers to Reckitt. We nonetheless recognize our responsibility to ensure appropriate standards are in place on the ground. Our sustainability ambitions include a commitment to a fairer society, and across our business we are dedicated to ensuring an inclusive culture where everyone is treated fairly and equally. This is alongside our commitments to environmental sustainability that includes a target for sourcing 100% RSPO palm oil by 2023 for direct/key ingredients, which are around 80% of our total use, and 2026 for the remaining most complex derivatives.
4. What steps would Reckitt take to resolve these issues?
We acknowledge that supply chain realities may not always reflect the standards we set out. We are committed to working with suppliers and third-party partners to fully understand and close gaps within agreed and realistic, but also ambitious, timescales.
Where we come across individual grievances, we will work with the parties on the ground to solve them. In cases where compliance with our standards has proved to be unattainable within acceptable timescales, we would only then look to remove a company from our supply chain. By principle, we prefer to be involved in solutions rather than just stepping away from problems. We will naturally follow up with the suppliers you raised with us and would appreciate further details on other companies when you are able to share them.
The findings presented by the Gecko Project and BBC suggest potential systemic problems regarding adherence to Indonesian rule of law and governance of agricultural cooperatives. Both of these would require further investigation and coordinated action by various public and private stakeholders to address. We see value in cross-sector collaboration to address these and any other systemic challenges, both with peer companies, supply partners, civil society and of course, government actors.
It is important to work to improve the livelihoods of smallholder farmers in the palm sector. We are aware about the issue related to the development of plasma palm plantations, and we continue to engage our suppliers to help them make progress with regard to this complex issue. Our responsible sourcing standard requires our supply chain partners to work in compliance with all laws and regulations in the countries in which they operate.
Unilever has been active for many years in supporting independent smallholders and so far, our programs have reached over 15,000. We are expanding this work, and our actions to more directly source our palm oil, are estimated to already be to the benefit of over 30,000 more independent smallholders.
With regards to our suppliers, we expect all our suppliers to follow not only the law but also our Responsible Sourcing Policy and People and Nature Policy, which set out mandatory requirements and expectations to do business with us, including the need to respect and advance human rights and deliver transparent and traceable supply chains. We publicly disclose the palm oil suppliers and mills we source from, both directly and indirectly, and recognising the importance of individuals and communities raising issues, we have a robust grievance mechanism in place and publish a grievance report so that issues are shared publicly. Where we are unable to verify a supplier's compliance to our policies, we will take action in accordance with the respective policy and in some cases that may entail suspension of those suppliers from our supply chain.
This is an issue we take extremely seriously. As mentioned earlier, we have immediately activated our grievance process and are investigating these allegations with the support of our suppliers and Earthworm Foundation.
We have reminded our suppliers of our business ethical code, requested them to implement their due diligence and we will add any suppliers found to be contravening their plasma commitments to Danone’s No-Buy list.
We expect all suppliers to comply with local laws and respect our policies and principles of no deforestation, no development on peat, and no exploitation of rights of workers, indigenous peoples, and local communities (NDPE).
Beyond our policies, and because we know these are systemic challenges, we are strengthening collaboration with peers and suppliers – through active participation in the CGF Forest Positive Coalition, and through multi-stakeholder projects like Livelihoods Palm Oil Project and the Siak Pelalawan Landscape Programme. In doing so we aim to bring greater transparency and ensure fairer settlements for smallholders and communities.
The Hershey Company takes all allegations of No Deforestation, No Peat and No Exploitation (NDPE) violations seriously, including the allegations around the withholding of plasma or the profits from plasma from local communities. Since 2013, Hershey has been committed to achieving a responsible and sustainable NDPE palm oil supply chain in line with our Responsible Palm Oil Sourcing Policy as well as our Supplier Code of Conduct, No Deforestation Policy and Human Rights Policy. Our Palm Oil Policy includes the requirement to “Support the inclusion of smallholders into sustainable palm oil supply chains and assist scheme and independent smallholders in achieving compliance with our policy”. We continue to communicate with our suppliers that remaining compliant with our NDPE policy, which includes fulfilling plasma obligations, is not optional.
In line with our Palm Oil Grievance Procedure, failure of our direct and indirect suppliers to uphold our NDPE commitments may lead to their removal or suspension from our supply chain in accordance with our sourcing policy. We have taken a number of actions in recent years to remove suppliers from our supply chain who have violated our policies and who do not demonstrate an interest in remediating their issues as seen on our public Palm Oil Grievance Log.
Based on the outreach from The Gecko Project, we have reached out to our direct suppliers on the specific allegation linked to PT Agrolestari Sentosa as well as their broader due diligence process around plasma obligations of their Indonesian suppliers to follow-up on the findings that your organizations have reported. Updates from our suppliers will be included in our grievance log, which is published on a monthly basis.
Hershey understands that RSPO certified palm helps mitigate human rights and environmental risks in our supply chain but is only one part of our more comprehensive responsible palm oil sourcing approach. We do not rely on any single effort but know that the best and most effective approach is an integrated and comprehensive set of efforts and actions to achieve our goals.
Thank you for raising allegations of supplier non-compliance with plasma obligations in Indonesia, particularly the case related to the PT Agrolestari Sentosa plantation. Failure to meet plasma obligations would present a risk of non-compliance with Colgate-Palmolive Company's no exploitation policies and local laws,
In addition to our current ongoing work with the Consumer Goods Forum Forest Positive Coalition and our monitoring and verification process, we will address the issue in four ways:
Finally, we work closely with the Earthworm Foundation on the development and support of our Palm oil program, policies and our overall grievance management process.
We are investigating further and take this issue extremely seriously.
The social and environmental challenges of palm production are well documented and we are working hard to gain more granular transparency of our supply chain. We are committed to intolerance to exploitation and human rights infringement. To this end, we are active members of RSPO and ASD (Action for Sustainable Derivatives).
Together with other ASD members, we’re currently running a full transparency assessment of all of our palm containing ingredients and we will be publishing the mill list for 2021 purchases later this year.
Over the past two years, we have renewed and strengthened our commitment to responsible sourcing, including ensuring full traceability and/or certification for critical ingredient supply chains by 2025, including palm.