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What is Nestlé doing to ensure palm oil is sourced sustainably?

palm oil

 

Nestlé’s position on palm oil

We use palm oil in some Nestlé products because it works well in many recipes. It takes much less farmland to cultivate palm oil versus other mainstream plant-based alternatives, and using it allows us to avoid using animal fats.

We bought around 460,000 tons of palm oil in 2016, from processing companies that source it in Malaysia, Indonesia, Latin America and West Africa. Our ambition is to achieve 100% responsibly sourced palm oil by 2020.

Where feasible, nonetheless, we are meeting demand for choice in our products with palm-oil free recipes.

How about palm oil and health?

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

When eaten as part of a healthy diet, processed foods made using palm oil (such as bouillons, fried noodles, doughs, chocolate coatings or ice cream) typically make up only a small contribution to our daily intake of saturated fats and are not a health risk.

Nestlé has significantly reduced saturated fats in many of our products since adopting a corporate policy (pdf, 1.5Mb) on this in 2009. Our 2020 objective is to reduce saturated fats by 10% in products that do not meet strict nutritional standards, to support the World Health Organization (WHO) recommendation that only 10% of calories should come from saturated fats.

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.

What is Nestlé doing to ensure responsible palm oil sourcing?

Nestlé is working to increase the proportion of sustainable palm oil that we source. We are committed to 100% responsibly sourced palm oil by 2020 – by ensuring suppliers comply with our Responsible Sourcing Standard (pdf, 2Mb).

This has provisions to help protect peatland and high-carbon stock land, which are critical in combating deforestation, and for preventing social conflict arising from potential disputes over land rights.

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 are 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.

Nestlé is focusing on technical assistance programs for smallholders, including Earthworm's 'Rurality' initiative. The smallholder focus is a direct way to improve our responsible sourcing of palm oil, and make a real difference to the farmer livelihoods. 

Nestlé is committed to achieving 100% RSPO-certified sustainable palm oil by 2023. RSPO plays an important role in driving industry change towards sustainable palm oil. We support them in this goal.

We are also exploring blockchain technology to increase traceability in our palm oil supply chain.

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

Nestlé expects over 90% of our key agricultural commodities to be verified deforestation free by the end of 2020. We remain committed to achieving 100%, in line with a commitment we made in 2010.

Working with our suppliers, we’re improving traceability standards 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.

This allowed us to publish our Transparency Dashboard in April 2019, which uses data from Starling to provide information on deforestation trends seen near the palm oil mills where we source.

Using all this information, we are continuously increasing our proportion of ‘responsibly sourced’ palm oil that fully complies with our Responsible Sourcing Standard.

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.

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 (pdf, 1Mb), and are an active member of Tropical Forest Alliance 2020.

How do you stop forced labor and human rights abuses?

Human rights abuses have no place in our palm oil supply chain, but are a problem in the sector. We need strong, collective action to address them and raise cross-industry standards. Working with others, Nestlé is committed to ending such abuses and ensuring responsible labor practices.

In April 2018, we launched our global Action Plan (pdf, 400Kb) to address labor 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 forced labor issues. We will provide regular public updates on our progress.

At the same time, we published an independent Labor Rights Assessment of our palm oil supply chain in Indonesia, based on interviews with over 200 people, including mill and plantation workers, smallholders and local community members.

We wanted a better understanding of actual and potential labor impacts in Indonesia, and developed recommendations on the role Nestlé, and other industry players (government, civil society, certification bodies, international organizations and palm oil buyers), should play.

In November 2017, we announced a collaboration with Sime Derby Plantation (SDP) in Malaysia, to launch a worker’s helpline, as a grievance mechanism to help them report on, and us to stop human and labor rights abuses.

What about Greenpeace’s ‘Burning down the House’ report?

We are deeply concerned by the forest fires in Indonesia and continue to monitor the situation. To be clear, we are strongly opposed to deforestation, and are committed to ensuring that none of our products is associated with deforestation. Nestlé’s Responsible Sourcing Standard, which includes a No Deforestation, No Peat, No Exploitation (NDPE) requirement, sets a standard that we expect all our suppliers to meet.

On the allegations made by Greenpeace, we are investigating and verifying occurrences of land clearance and burning, as we do for other deforestation clearances. We will immediately stop sourcing from any supplier that we find linked to deforestation. We’ve already removed 10 suppliers from our palm oil supply chain for non-compliance with our Responsible Sourcing Standard requirements.

Global Forest Watch data shows that more than 75% of 318,000 fire alerts in Indonesia this haze season have occurred outside of concession areas. This suggests that these are carried out by independent producers and smallholder farmers looking at expanding their plots. Our experience shows that we need to engage with smallholder farmers to prevent deforestation, by supporting their livelihoods and sustaining their communities.

We’re providing technical assistance to almost 50,000 smallholder farmers, and are scaling-up initiatives to help them increase crop productivity and diversify incomes. Our aim is to make forest conservation economically attractive, restore forestry stocks and promote regenerative agriculture.

What about deforestation 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.

The Leuser Ecosystem is a priority ecosystem for Nestlé’s forest protection strategy, because of the significant and unique biodiversity it holds, the closeness of several mills in our supply chain to it and complex deforestation patterns in the region.

Solutions will not be simple or immediate, and our work to date consists of supply chain mapping, satellite monitoring, engagement with suppliers and landscape initiatives.

Using Starling satellite-based monitoring, we are keeping a close eye on forest cover changes close to any sites in our supply chain. This includes the entire Leuser Ecosystem, Aceh and North Sumatra.

Our direct suppliers have worked with all their suppliers operating within 50 km of the Leuser Ecosystem. They have held several workshops in the region to raise awareness of the ecosystem’s importance and the need for collective action to protect it. We are now reengaging our suppliers to accelerate adoption of NDPE policies and full traceability to plantation systems by all mills in our supply chain at risk.

We are working with Earthworm Foundation and multiple suppliers sourcing in Aceh Tamiang, Indonesia, to address deforestation at a landscape level, where it overlaps with the Leuser Ecosystem.

This initiative aims to bring together multiple stakeholders, to contribute to government land-use planning processes to create resilient and thriving ecosystems. We are now exploring opportunities to apply this model in additional locations around the Leuser Ecosystem.

What about RAN’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.

Two of the mills investigated, PT Global Sawit Semesta and PT Samudera Sawit Nabati, operate close to the Leuser Ecosystem, and supply our direct supplier Golden-Agri Resources (GAR).

Both mills source palm oil from hundreds of smallholder farmers, and GAR – which requires all supplier mills to establish traceability down to plantation level, and to identify all the independent plantations and smallholders they source from – is working with both mills to verify RAN’s specific allegations.

If the investigation reveals that the two mills source palm oil from plantation involved in deforestation, we will suspend them from our supply chain.

Satellite monitoring in Rawa Singkil Wildlife Reserve shows that most deforestation in this area involves areas of less than five hectares, but this adds up to significant areas of clearance.

Working with our suppliers and partners, we are strengthening and developing 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 smallholder 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?

The findings on Wilmar in Greenpeace’s report are concerning, and we are working closely with the company and our partner Earthworm Foundation to address these issues and ensure 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).

Working 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, which includes potentially suspending commercial ties. Here is a list of suppliers recently removed from the Nestlé supply chain.

Greater supplier transparency and better practices are vital. 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.

At the end of 2018, we also become the first global food company to use Starling – a satellite-based service developed by Airbus and Earthworm Foundation – to monitor 100% of our global palm oil supply chains and catch evidence of potential deforestation at an early stage.

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 about Amnesty International’s report on palm oil?

Amnesty International’s report, ‘Indonesia, The Great Palm Oil Scandal’, identified alleged human rights abuses taking place in Indonesia that the NGO linked to Wilmar, one of our suppliers. We have working closely with Wilmar to address this issue.

Nestlé collaborated with Amnesty as it drafted the report, and provided detailed information on our relationship with Wilmar. We responded publically to Amnesty’s letters, and met them to discuss the situation and progress on the ground.

We are working closely with partners such as Earthworm Foundation to improve transparency, traceability and supplier behavior in palm oil. Our Responsible Sourcing Standard includes strict rules on labor rights – ultimately we will suspend any suppliers that do not meet these requirements.

Read our full response to the Amnesty report.

Do you source palm oil from REPSA in Guatemala?

No, we have stopped sourcing palm oil from REPSA, and ceased our commercial ties in 2018.

Does Nestlé source palm oil from IOI Group?

Yes. Nestlé did stop purchasing palm oil from IOI Group in March 2016 after the company’s suspension from RSPO following allegations of human rights abuses and deforestation.

RSPO eventually lifted their suspension and Greenpeace suspended their campaign. We ended our suspension in June 2017 and continue to engage and monitor IOI’s progress against their action plan, which includes resolving the Pelita land dispute 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 we would take over palm oil sourcing for Nestlé products made under this joint venture – a process we completed in early 2018.

Nestlé and Indofood Group agreed to close our JV in September 2018 for commercial reasons.


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Our Starling journey

Starling is helping us gain a better understanding of the deforestation risks around our palm oil supply chain. As we act on this knowledge we want to share our journey with you.

Our palm oil supplier engagement process

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Engaging our suppliers

We use the data provided by Starling to engage our suppliers on deforestation risks. This graphic illustrates our engagement process.

Our palm oil supplier engagement process

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