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What is Nestlé doing to improve palm oil sourcing?

responsible palm oil sourcing

Does Nestlé use palm oil and how much do you buy?

Nestlé uses palm oil as an ingredient in a number of our products. At the same time, we are meeting demand for choice in our product range where feasible, with palm-oil free recipes.

We bought around 460,000 tonnes of palm oil in 2016. We buy palm oil from processing companies that source it from Malaysia, Indonesia, Latin America and West Africa.

What is Nestlé doing to source sustainable palm oil?

Nestlé is working to increase the amount of responsibly sourced palm oil in our supply chain, and to ensure that our suppliers comply with our Responsible Sourcing Standard (pdf, 2Mb).

The Nestlé Responsible Sourcing Standard makes explicit provisions for the protection of peatland and high-carbon stock land, which are critical in combating deforestation, and for preventing social conflict arising from potential disputes over land rights and land acquisition.

All our suppliers must comply with local laws and regulations under our guideline. They must not cultivate palm oil or source it from areas cleared of natural forest after December 31, 2015. They must respect the free, prior and informed consent of local and indigenous communities, and protect high-carbon-value forests and peatlands.

With our partner Earthworm Foundation, we’re currently mapping our palm oil supply chain. We can now trace more than 90% of the palm oil we source back to the mill of origin and almost half back to the plantation level. Our ambition is to achieve 100% responsibly sourced palm oil by 2020.

Nestlé is also focusing on technical assistance programmes for smallholder farmers, including Earthworm Foundation 'Rurality' initiative. This focus on smallholders is a direct way to improve our responsible sourcing of palm oil, and of making a real difference to the livelihoods of farmers who supply us.

What is Nestlé doing to address labour & human rights abuses?

Human rights abuses have no place in our palm oil supply chain, but are endemic in the palm oil sector. To systematically address them, strong and collective action is needed to transform the industry and raise standards. We are committed to addressing any abuses that occur, working closely with others.

In April 2018, we launched our global Action Plan to address the issue of labour rights in our palm oil supply chain. This plan sets out the targets, activities and interventions we will focus on with our partners and other industry players to address labour issues. We will provide regular public updates on our progress.

We published our Action Plan (pdf, 400Kb) alongside a Labour Rights Assessment of our palm oil supply chain in Indonesia, which we commissioned from the Danish Institute for Human Rights (DIHR) and Earthworm Foundation in 2017. This focused specifically on the labour rights of workers, and DIHR and Earthworm Foundation teams interviewed over 200 people, including mill and plantation workers, smallholder farmers and local community members.

Through this assessment, Nestlé sought to gain a deeper understanding of the actual and potential labour impacts in our palm oil supply chain in Indonesia. We also sought to develop recommendations on the role we, and other industry players, should play to address them.

These other players include the government, civil society, national and international sustainability certification bodies such as Indonesian Sustainable Palm Oil (ISPO) and Roundtable on Sustainable Palm Oil (RSPO), international organisations and palm oil buyers.

The Action Plan is the next step in our work to achieve a sustainable supply chain, building on our existing responsible sourcing programme. The journey to achieving transformation across the palm oil sector is a long one, and there is much still to do. But by working collaboratively we believe we can realise the change we want to see.

What are you doing to stop your palm oil coming from companies involved in rainforest clearance in Indonesia’s Leuser Ecosystem?

We are very concerned by continued deforestation in Indonesia’s Leuser Ecosystem and allegations of palm oil companies involved in it.

Through Starling satellite-based monitoring, we are monitoring closely forest cover changes in proximity to any sites in our supply chain.

Our direct suppliers have worked with all of their suppliers operating within 50 km of the Leuser Ecosystem and held several workshops in the region to raise awareness of the importance of this Ecosystem and the need for collective action to protect it.

Because deforestation will not be solved by addressing it directly in our own supply chain alone, we are also working with Earthworm Foundation and multiple suppliers sourcing in Aceh Tamiang, Indonesia, to address deforestation at a landscape level. This landscape overlaps with the Leuser Ecosystem. The initiative aims to contribute to government land use planning processes to create resilient and thriving ecosystems and communities through multi-stakeholder collaboration. If successful, we will use this pilot as a model for future approaches to address deforestation.

What about Rainforest Action Network’s allegations that you source from plantations inside the Rawa Singkil Wildlife Reserve?

In October 2019, Rainforest Action Network (RAN) released a report alleging deforestation in the Rawa Singkil Wildlife Reserve, within the Leuser Ecosystem. We are closely monitoring the situation and working closely with our suppliers sourcing in the area.

We source palm oil from mills near the Leuser Ecosystem. Two of the mills investigated - PT Global Sawit Semesta and PT Samudera Sawit Nabati - supply our direct supplier Golden-Agri Resources (GAR). We immediately engaged with GAR, which requires all its supplier mills to establish traceability down to plantation level, and to identify all the independent plantations and smallholders they source from. These mills receive palm oil from hundreds of small holder farmers.

GAR is engaging with both mills to verify the specific allegations contained in the RAN report and will send teams to conduct on-site verifications. If the investigation reveals that these two mills source palm oil from plantations engaged in deforestation activities, we will suspend them from our supply chain.

Deforestation patterns observed through satellite monitoring in Rawa Singkil Wildlife Reserve show that most deforestation in this area involves small-scale encroachment of less than five hectares on forest areas, adding up to significant areas of clearance. We are working with our suppliers and partners to strengthen or develop the necessary tools to monitor, verify and mitigate small-scale deforestation risks.

This includes strengthening traceability to plantation systems, building mill capacity to address deforestation risks outside of supplier concessions, and integrating forest protection in all our smallholder initiatives. We also are reinforcing the requirement that all our suppliers enforce No Deforestation and No Exploitation (NDPE) policies and a commitment to progress towards traceability to plantation level for all the mills in their supply chains.

Real transformation requires collective action and collaboration on the ground. Progress will take time and we are committed to an inclusive approach – taking small holder farmers with us on this journey as we make further progress towards a deforestation free supply chain.  

We look forward to continued discussions with RAN and other stakeholders on how we can work together to address the challenges in the Leuser Ecosystem.

What is your response to Greenpeace’s ‘Final Countdown’ report?

Deforestation is a serious and complex issue. The entire palm oil industry must work together to address it, through greater transparency, inclusiveness, direct supply chain engagement and capacity building.

Our ambition is that by the end of 2020 all of the palm oil that we use is responsibly sourced (pdf, 1Mb) , and we continue to work towards this target by ensuring that suppliers to Nestlé comply with our standards.

We are concerned by the findings relating to Wilmar in Greenpeace’s report, and are working closely with the company and our partner Earthworm Foundation to address these issues and ensure that prompt action is taken where required. We welcome the announcement by Wilmar that it has set the goal of obtaining a 100 percent independently verified No Deforestation, No Peat and No Exploitation (NDPE) compliant supply chain by 2020 (pdf, 104 Kb).

Together with Earthworm Foundation, we continuously map our supply chain and help our suppliers meet our Responsible Sourcing Standard. If our suppliers fall short of these standards, we will take decisive action, including potential suspension of our commercial ties. Here you can see a list of suppliers that have recently been removed from the Nestlé supply chain, or that are in the process of being removed, by September 30 2018 at the latest.

We’ve put in place additional measures to improve supplier transparency and practices. In February 2018, we published a full list of all of our Tier 1 suppliers of palm oil, and a list of all of the mills that we can trace our supply back to.

By the end of 2018, we will also become the first global food company to implement Starling – a satellite-based service developed by Airbus and Earthworm Foundation – to monitor 100% of our global palm oil supply chains. The purpose of this system is identify potential deforestation at an early stage.

How do you respond to the Amnesty International report on palm oil?

Amnesty International’s report, ‘Indonesia, The Great Palm Oil Scandal’, identified alleged human rights abuses taking place in Indonesia that have no place in our palm oil supply chain. These were linked to Wilmar, one of our suppliers. We are working closely with Wilmar to address this issue.

Nestlé actively collaborated with Amnesty during the drafting of its report, and provided detailed information on our relationship with Wilmar. We’ve responded publically to the four different letters sent to us by Amnesty since October 2016 and have met them to discuss the situation and progress on the ground.

Some of the issues Amnesty identifies are complex. So effective remedies, improved operation practices and, ultimately, systemic industry change do not happen overnight.

For six years we’ve worked with partners, including Earthworm Foundation, to improve transparency, traceability and supplier behavior in the palm oil industry. Our Responsible Sourcing Standard includes strict rules on labour rights. We will suspend any suppliers that do not meet these requirements.

Read our full response to the Amnesty report.

What are you doing to end deforestation in your palm oil supply chain?

Nestlé is committed to ensuring that no deforestation takes place where we source our ingredients and packaging materials by 2020. We made this commitment in 2010, and it was the first of its kind made by a food company.

We’ve pledged to end deforestation in our palm oil supply chain, and are focusing on improving traceability, working with our suppliers to understand exactly where our palm oil comes from.

In September 2018, we became the first global food company to implement Starling, a satellite-based service developed by Airbus and Earthworm Foundation, to monitor 100% of our global palm oil supply chains. We will extend the program to cover our pulp and paper supply chains in 2019 as well as soya at a later stage.

Nestlé also published a Transparency Dashboard, in April 2019, that uses Starling data to provide information on deforestation trends observed near the palm oil mills it sources from.

Using all this information, we are continuously increasing our proportion of responsibly sourced palm oil. This is palm oil that we source from suppliers that comply fully with our Responsible Sourcing Standard. This document explicitly prohibits deforestation in our supply chain.

We can now trace over 90% of the palm oil we source back to the mill of origin and almost half back to the plantation level. Our ambition is to achieve 100% responsibly sourced palm oil (fully compliant with our guideline) by 2020.

More broadly, Nestlé supports the Consumer Goods Forum commitment to achieving zero net deforestation by 2020. We’ve signed the New York Declaration on Forests, and are an active member of Tropical Forest Alliance 2020, a partnership dedicated to ending deforestation in palm oil.

Do you source palm oil from REPSA in Guatemala?

We’ve decided to stop sourcing palm oil from REPSA. We will honour our existing contracts with the company, but will not renew them. We expect to cease commercial ties by the end of 2018.

Does Nestlé source palm oil from IOI Group?

Nestlé suspended purchasing from IOI Group in March 2016 immediately after its suspension from the Roundtable on Sustainable Palm Oil (RSPO) following allegations of human rights abuses and deforestation.

Since that time, we engaged with IOI in their efforts to improve their responsible sourcing practices. An action plan was developed to set out targets around traceability to plantation, management of third party suppliers, and broad-based environmental and social management systems.

Since their suspension, IOI made progress in systematically reshaping the way their business operates with regards to sustainability. In recognition of their progress, RSPO lifted their suspension and Greenpeace suspended their campaign. We decided to end our suspension on purchasing from IOI in June, 2017 and continue to engage and monitor their progress against their action plan, including monitoring IOI’s work to resolve the Pelita case of disputed land with local communities.

What are you doing to address concerns over Indofood’s palm oil sourcing?

In December 2016, Nestlé and Indofood Group in Indonesia agreed that we would take over palm oil sourcing for Nestlé products manufactured under this joint venture – a process that was completed in early 2018.

Nestlé and Indofood Group agreed to close the joint venture in September 2018 for commercial reasons.

What about palm oil and health concerns?

Nestlé uses refined palm oil as an ingredient in a number of products. We do so in strict accordance with, and often beyond, all relevant food safety regulations and laws, wherever we operate.

We are addressing concerns about MCPD esters in refined palm oils and other refined vegetable oils by working with our suppliers to ensure that levels are as low as possible. The quality and safety of our products are non-negotiable priorities.


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