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 Guideline (pdf, 1Mb).

This guideline follows industry-wide Roundtable on Sustainable Palm Oil (RSPO) criteria on the growth and use of sustainable palm oil, but goes further with explicit provisions to protect peatland and high-carbon stock land. This is critical to combating deforestation and prevent social conflicts arising from land rights disputes.

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 November 2005. 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 The Forest Trust (TFT), 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 TFT's '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 TFT in 2017. This focused specifically on the labour rights of workers, and DIHR and TFT 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.

How do you respond to the Greenpeace report on deforestation in Indonesia?

We’ve identified some issues with one of our palm oil suppliers in Papua, Indonesia & we’re working closely The Forest Trust to address them. If we find problems in terms of supplier compliance with our standards, we will take action – potentially including suspension.

Nestlé is committed to zero deforestation globally by 2020. This means that none of our products will be associated with it. We’re strongly opposed to deforestation & we’re proactively tackling it through our responsible sourcing programme.

Our ambition is that we will use 100% responsibly sourced palm oil by the end of 2020 (pdf, 90 Kb).

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 The Forest Trust (TFT), to improve transparency, traceability and supplier behavior in the palm oil industry. Our Supplier Code 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.

Using 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 Guideline and Supplier Code. 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 (pdf, 1Mb), and are an active member of Tropical Forest Alliance 2020, a partnership dedicated to ending deforestation in palm oil.

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

We are very concerned by allegations that palm oil companies are engaged in deforestation in Indonesia’s Leuser ecosystem. One of the companies identified in recent campaigns on this issue, PT. Agra Bumi Niaga, was a sub-supplier to Wilmar, which in turn supplies palm oil to Nestle.

Wilmar immediately stopped sourcing palm oil from PT. Agra Bumi Niaga, when these allegations were published, and Nestlé is working closely with Wilmar to investigate the allegations.

Wilmar has contacted all of its suppliers operating within 50 km of the Leuser Ecosystem to reinforce its No Deforestation, No Peat and No Exploitation Policy (pdf, 1Mb). This obligation reflects Nestlé’s own commitment to end deforestation in our palm oil supply chain.

In addition, Wilmar has organised several workshops in the region to raise awareness of the importance of the Leuser Ecosystem and the need for collective action to protect it.

We are working closely with Wilmar and our other suppliers on sustainability initiatives to address problems such as deforestation in Northern Sumatra, Indonesia (including the Leuser ecosystem). This will help us identify where deforestation is a risk in our supply chain, and take strong action.

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 September 2018 at the latest.

Does Nestlé source palm oil from IOI Group?

Following IOI Group’s suspension from the Roundtable on Sustainable Palm Oil (RSPO) in March 2016 following allegations of human rights abuses and deforestation, Nestlé immediately stopped sourcing palm oil from plantations where concerns were raised.

We were able to do this because of the robust traceability systems we have in place. Together with our partner TFT, we carried out an assessment of IOI’s action plan in response to the issues raised. We decided that this did not go far enough. Consequently, Nestle will not award any new business to IOI and we have phased-out all existing contracts.

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 our joint venture.

This is in line with our ambition that 100% of the palm oil we buy is traceable back to responsibly managed plantations that comply with High Conservation Value (HCV), High Carbon Stock (HCS) and Free, Prior and Informed Consent (FPIC) standards.

The transition began in January 2017 and is now complete. For the palm oil that Indofood buys for its own needs, we continue to share best practices with the company, to contribute to a wider industry transformation.

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.

Read more Read more about responsible sourcing of palm oil

Read more Read the Nestlé Responsible Sourcing Guideline (pdf, 1Mb)

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