Sugar

Cane sugar plant

Sugar is an essential ingredient in many of the foods and beverages we produce.

It is sourced from more than 200 suppliers in 60 countries around the world, in both sugarcane and sugar beet forms. Sugar harvesting can be dangerous, and labor conditions are often challenging. We are committed to working with our suppliers to ensure labor rights are upheld, including tackling child labor and ensuring fair pay and working conditions for employees.

Our sugar supply chain

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Our approach to sourcing sugar sustainably

Our sugar supplies mainly come from Brazil, Mexico, Thailand and India and the US (predominantly from sugar beet). We also source smaller quantities from other countries, including Australia, the Philippines and Colombia.

Our aim is to ensure that our sugar is sourced from mills where the operations, as well as the farms and plantations that supply them, comply with local laws and regulations and our Responsible Sourcing Standard (pdf, 2.4Mb). This includes:

  • No use of forced or child labor.
  • Workers’ pay and conditions that at least meet legal or mandatory industry standards.
  • Respecting freedom of association and collective bargaining, unless prevented by law.
  • The provision of safe and healthy workplaces.
  • Mitigating the impacts on water by implementing water management plans, and additional measures in water-stressed areas.

Assessments have identified a range of challenges in some of the countries where we source sugar, including working and living conditions for sugarcane laborers and environmental challenges like agrochemical applications. Together with our suppliers and implementing partners such as Proforest, we are actively working to address them.

Working with sustainable suppliers

We work with Proforest to map our sugar supply chain and assess our suppliers. By the end of 2020, we had mapped the supply chain back to the sugar mills in several countries and regions, including Brazil, Mexico, India, Australia, Thailand, the Philippines, China and Central America. The assessment process includes exploratory and full site visits and analysis of traceability and employment data. Findings inform the development of strategies for mills to improve practices, implement changes and roll out appropriate training across their supply bases.

Transparency

To hold our suppliers and ourselves accountable and drive industry-wide transparency, we have published the list of our Tier 1 sugar suppliers (pdf, 300Kb) and the list of the mills in our supply chain (pdf, 400Kb), along with their countries of origin.

Natural capital

In 2010, we made a deforestation-free commitment for our supply chains, stating that all of our products, globally, will not be associated with deforestation by 2020. For several years, we have been using a combination of tools, including supply chain mapping, on-the-ground verification and geographic information system (GIS) analysis for 69 mills in 11 countries in 2020 to ensure that the sugar we buy is not linked to deforestation. As of December 2020, 91% of the sugar we buy was classified as having a low risk of deforestation. We will continue to work with suppliers to close the gap by 2022.

Smallholder farms are a critical component of sugarcane farming. In Thailand alone – the world’s second-largest world exporter of sugar – sugarcane is almost exclusively produced by 330 000 independent small farmers. To date, some sustainability projects and initiatives have tried to incorporate small farmers but have not yet reached scale.

The Thai sugarcane industry is just beginning its sustainability journey. With the support of sugar buyers, growers are developing their operations in line with the Bonsucro Standard (pdf, 1Mb) but launching scalable solutions across thousands of small farms is a challenge.

Verifik8, an innovative technology solution, could be the answer. Verifik8 has been developed to enable farmers to easily share information directly with mills. Farm data is collected via a mobile app before being analyzed and shared with mill extension officers and inspectors for validation. The tool is fully aligned with the Bonsucro Standard, making it easier for smallholders to implement improvements that meet the Standard.

To support these efforts, we have committed to responsibly and sustainably sourcing sugar and to supporting suppliers in reaching their own sustainability targets. We understand that there are challenges for suppliers to achieve certification and/or a baseline of good practices across their entire supply base, especially where they consist primarily of smallholder farmers. Since 2017, we have supported the implementation of a capacity building, training and continuous improvement program in Thailand’s sugarcane sector in partnership with PepsiCo, Bonsucro, FairAgora Asia – the makers of Verifik8 – and leading sugar producer Mitr Phol.

Key achievements to date include:

  • The creation of a knowledge development plan for capacity building and measurement of sustainability performance.
  • 100 smallholder farmers across four locations participated in a program designed to help them achieve a baseline of good farming practices.
  • The development of the incentive program Champion Farmer.

In Nigeria, the government is increasingly focused on developing its sugar sector. Nestlé is engaging with key stakeholders to ensure this is done sustainably. Engagement with local suppliers started in 2018. In 2019, our partner Proforest conducted two supplier assessments to better understand the current situation and to support our local suppliers.

The Sunti Golden Sugar Estate (SGSE) is one of Nestlé’s suppliers in Nigeria and one of the largest producers of sugar in the country. As part of the site assessments, Proforest assessed:

  • The production site’s operations against our Responsible Sourcing Standard.
  • Land rights issues, using Landesa’s new LandAssess tool, which is a risk assessment and management framework. It provides a clear and simple set of checklists that generates a report to help agricultural companies assess and manage how they respect land rights.
  • Capacity building for SGSE’s staff on health, safety and environment (HSE).

The land rights assessment helped to identify areas for improvement, including the need to establish a land use plan that secures the rights of communities within the operation areas and strengthen the stakeholder engagement process. HSE training was also provided, reflecting observations made by the team on-site, including on the use of personal protective equipment (PPE).

Toward the end of 2019, the same site assessment visit was replicated in Dangote’s Savannah Sugar Company Limited, located in Numan, Adamawa State, Nigeria. The company helped identify areas of improvement in their operations. 
 
In 2020, Nestlé, Proforest and both suppliers worked together to develop action plans. This included engaging suppliers to agree on the best approaches to close gaps identified against our Responsible Sourcing Standard during site assessments.

A site assessment at Sucrivoire’s operations in Zuénoula and Borotou-Koro, Côte d’Ivoire against Nestlé’s Responsible Sourcing Standard (pdf, 2.4Mb) identified a number of environmental issues to be addressed. These included a lack of assessments during previous land clearances and development on high conservation value (HCV) and high carbon stock (HCS) land. As a result, it was likely that some of these areas of land had been converted to sugar growing.

It was clear from the assessment that there was a lack of awareness among staff on how to identify, manage and monitor HCV and HCS areas. Sucrivoire was very interested and open to learning about this, so, together with Proforest, we arranged specific training on the basics of HCV/HCS and how to identify and protect them. Ten employees from the two milling sites took part in the training, which featured interactive, classroom-based activities as well as practical field visits to ecological sites.

At the end of the training, participants briefed a Sucrivoire Zuénoula director about the lessons learned and how they planned to incorporate them into their operations. It was agreed that HCV/HCS assessments of operations and subsequent developments will be carried out before all future conversions of land for sugar growing.

In 2020, Proforest planned to conduct follow-up visits and provide further capacity-building activities and support to Sucrivoire. This was prevented by travel limitations due to the COVID-19 pandemic. Remote engagement activities were therefore employed to provide additional resources to support the identification of HCV and HCS areas. By the end of 2020, the supplier indicated that they had engaged a local consultant to carry out environmental assessments including HCV identification. Nestlé and Proforest will continue their follow up in 2021 to review the assessment outcomes. The approach and interventions are always customized to the different needs identified for the various sites since there is no one-size-fits-all solution.

Protecting workers and children

During harvest periods in many countries, such as China, Côte d’Ivoire, Mexico, Nigeria and Thailand, large numbers of temporary migrant workers live and work in sugarcane-growing areas. The nature of this labor force accounts for many social risks within the supply chain. These can include limited access to sanitation and potable water; overcrowding and a lack of personal space and privacy; children not in education and potentially exposed to hazardous conditions; and limited access to safe working practices, such as the appropriate use, storage and disposal of chemicals. We have several interventions in place to address these issues, with a particular focus on improving conditions for workers and children in Mexico.

Although there is a lot of pressure from the government, non-governmental organizations and others to address child labor in Mexico, it can be a sensitive issue in the mills due to the way that labor is contracted and how much influence the mills feel they can exert on those who recruit cane cutters. This has made it challenging to establish a clear plan and a more progressive approach is required. Together with Proforest and its local partner, ABC Mexico, we have been working to address this issue at our supplying mills: La Gloria mill in Veracruz and Grupo Beta San Miguel (BSM). The mills were initially supported in developing policies together with implementation and monitoring plans, followed by training and awareness-raising activities in the field. The aim has been to support the mills in developing an approach to reduce the number of children working in the field over time.

La Gloria has developed a policy to prevent child labor in harvesting activities, which has been approved by the mill and cane growers’ associations. The mill has also implemented a due diligence process to verify the age of workers and avoid children entering field work or working with chemicals. To ensure these regulations are upheld, the mill will perform regular field ID verifications and has implemented a program to raise awareness about relevant laws and sanctions relating to employing children.

BSM has developed a corporate policy to tackle child labor in their supply base. It has also implemented programs to identify and address root causes of child labor and to raise awareness about child rights among producers, shelters for migrant workers, leaders of the cane-cutting teams and mill personnel. Additionally, BSM has implemented a due diligence process to verify the age of workers and prevent children from entering field work.

Every harvest season, the La Gloria sugarcane mill hires around 2000 cane cutters. These are usually migrant workers from Puebla and Veracruz. They are organized into groups of 30–60 cutters and are housed in 39 shelters provided by the cane growers’ association.

Through assessments with Proforest and ABC Mexico, we found that the shelters provided at the La Gloria mill were in poor condition: unsafe, unhealthy and insufficient. These included people sleeping on floors, a lack of ventilation and illumination, and only one bathroom and shower for 60 people. We developed a strategy to address this that focuses on raising awareness, rehabilitating shelters and helping cutters and their families manage the shelters themselves.

After raising money to rehabilitate five shelters for more than 300 workers in 2017 and 2018, we took this work further in 2019 by supporting La Gloria in the development of a financing mechanism for the rehabilitation of additional shelters over the next five years. In 2020, La Gloria improved the conditions of five shelters, focusing on ventilation, lighting and ensuring the available space was used as efficiently as possible.
 
With the support of Proforest, in 2020, Nestlé and BSM developed a protocol for guiding the improvement of housing infrastructure for migrant workers. Since this is one of the biggest issues, this guide will help BSM and the entire sector provide decent housing conditions for migrant cane cutters and their families. The document is available in Spanish and English.

Since 2019, we have worked with Proforest to support major sugar suppliers in Mexico in improving working conditions for cane cutters. This includes ensuring access to sufficient and potable water, hygiene services and emergency equipment.

We have supported BSM in the implementation of a hydration program at the Casasano mill in Morelos. The program has benefited over 200 people from five shelters through the delivery of water containers and filters to improve water collection and quality. Additionally, mills have installed mechanisms and distribution equipment to increase access to drinkable water in the field for 700 cane cutters. Hydrating isotonic drinks are also provided during the hottest parts of the harvesting season to prevent dehydration cases.

In La Gloria, we have supported the acquisition and distribution of equipment to improve clean water availability for 3000 cane cutters. They will receive clean water and hydrating serum during the 2020–2021 harvest season. Additionally, 30 first aid kits have been delivered to mill inspectors and cane-cutting leaders to better address emergencies in the field.

Collective action and engagement

We have an ongoing, multi-stakeholder program based on the Responsible Sourcing from Smallholders (RSS) framework that aims to address sustainability risks and improve sugarcane smallholder livelihoods in the Philippines’ largest sugar-producing region. Proforest assessments identified various sustainability risks, including child labor. Nestlé and Proforest concluded that the RSS framework could help stakeholders build on existing initiatives and provide clear direction.

In partnership with three independent local mills, each sourcing from a common pool of small cane planters, we have agreed activities to address key risks and farmers’ needs: child labor, inadequate PPE, cane residue burning, input access and know-how, affordable finance, alternative livelihood support (for example, vegetable gardens) and soil management including irrigation. 

There are an estimated 5574 small farms (10 hectares and below in size) in the milling districts where the program operates. Across four years, the RSS program engaged with 88 Agrarian Reform Beneficiaries Organizations (ARBOs) where the collective 3913 small farmer members have directly or indirectly benefited from RSS interventions. Almost 3000 PPE sets have been distributed to farmers and the program is currently supporting 12 ARBOs to expand alternative livelihood projects. 

In late 2019, the RSS introduced the Comprehensive Assistance to Small Holders (CASH) for Farm Productivity Program. As well as facilitating soil analysis tests and providing coaching, the CASH program gives all participating ARBOs additional livelihood support, high-yielding varieties cane points and access to other soil fertility initiatives from the mills.

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