Ties to Labor and Human Rights Among Palm Oil Leaders and Laggards

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Palm oil, sustainable palm oil, PepsiCo, human rights, labor, workers rights, supply chain, Leon Kaye, Indonesia,
Protests against the palm oil supplier Korindo’s business practices in Seoul, Korea.

When talking about how the private sector impacts labor rights worldwide, both positively and negatively, the center of such a discussion must start with the global palm oil industry. The sector has grown rapidly over the past 10 to 15 years as food processing and personal care product companies increasingly coveted this ingredient, which can improve and standardize products’ consistency as well as lengthen their shelf lives. According to WWF, global palm oil production was approximately 24 million tons in 1999; by 2019, that amount more than doubled to approximately 50 million tons; in the next few years, watch for annual production to surpass 70 million tons.

Indeed, other industries also touch our everyday way of life, such as seafood, timber and paper, and cotton. But as WWF pointed out, almost half of all consumer goods on the planet include palm oil as an ingredient, which in turn is why this ingredient affects so many people across its entire supply chain — from farm to factory and then, finally, at the retail check-out counter.

Furthermore, palm oil has become the focal point of the global debate over how to best manage the environment while securing the most basic human freedoms. Concern is now mainstream: In the popular Netflix series “Grace and Frankie,” a scene over the palm oil controversy leads one character to tell the lead, played by Lily Tomlin, to get over her hypocritical stance on the industry: “I bet I could open up your purse right now and find three things that have palm oil in them.”

Yet those countless things made from palm oil are wreaking havoc in communities across the world, say many NGOs, as countries including Indonesia, Malaysia, Guatemala and Colombia become the setting for what is often called “conflict palm oil.” These nations are amongst several emerging economies to witness forced labor along with an increase in land grabbing and unfair wages.

Although business and consumer awareness of these problems have surged, many of the world’s leading food and consumer packaged goods companies continue to engage in business relationships with palm oil producers that are associated with labor and human rights violations — therefore putting their reputation, and the lives of far too many citizens, at risk.

The fundamental problem is that far too many suppliers are refusing to abide by the principles of Free, Prior, and Informed Consent (FPIC). By international law, FPIC grants local communities the right to accept or decline any projects that could impinge on lands they either own, have occupied for generations or use to secure their economic livelihood.

So, who are the leaders in the push for more fairly produced palm oil, and who is falling behind?

Deborah Lapidis, campaign director with the global environmental campaign organization Mighty, told us it is difficult to identify which companies are leading on the procurement of ethically sourced palm oil. Many companies, she insisted, continue to be stubbornly opaque when it comes to the disclosure of where they procure palm oil and how their supply chains operate.

“There is a whole set of brand-name companies that we consider major laggards when it comes to the implementation of their ‘no exploitation’ policies, because they have failed to publish their plans and progress reports,” Lapidis told TriplePundit. “And they never respond to our inquiries when we flag problems in their supply chain.”

Companies Mighty has called out for their refusal to engage with environmental and human rights NGOs include some of the world’s most popular food brands: Krispy Kreme, Tim Horton’s, Starbucks, Kraft Heinz, ConAgra, Burger King and Yum! Brands (which runs Pizza Hut, KFC and Taco Bell restaurants). “All of these companies failed to respond to three serious inquiries of potential policy violations in the past few months,” Lapidis said.

The situation is especially dire as labor and human rights abuses in several countries continue to worsen, she explained, despite a boost in consumer awareness about palm oil’s impact and hence a much louder outcry.

Mighty’s inquiries included palm oil suppliers such as BLD Kirana on Malaysian Borneo, which allegedly encroached on land long owned by local communities; Indonesia’s IOI Group, which continues to be accused of conducting human rights and environmental abuses; and Korindo, a Korean-owned palm oil producer that activists say occupied land owned by families for generations while deforesting areas on which communities were economically dependent for centuries.

Rainforest Action Network (RAN) is one of the most active NGOs monitoring the palm oil sector and advocating for the fairer treatment of workers within global palm oil supply chains. It is also highly critical of the industry.

“Unfortunately, the palm oil supply chain continues to be riddled with the worst forms of human and labor rights abuses,” said RAN’s Emma Lierley. “While activists have had great success in raising the profile of conflict palm oil in the last few years, what has often been overlooked is the conditions for workers and communities on the ground.”

One company RAN repeatedly called out for intense criticism is PepsiCo. The New York-based beverage and snack food giant is one company included on RAN’s Snack Food 20, a group of companies the NGO says is behind both deforestation and the lack of protections for workers within the palm oil industry.

Two years ago, PepsiCo promised a strong commitment to the sourcing of sustainable and responsible palm oil. RAN counters that PepsiCo’s 2014 declaration, which the company updated last year, fails to secure strong human rights protections for workers and their local communities.

The culprit is Indofood, a PepsiCo joint venture that is one of the most prominent palm oil growers in the world. It’s the largest Indonesian food processing company and the sole maker of PepsiCo’s food products in Indonesia. The list of abuses, from RAN’s point of view, runs long and include:

  • The company’s reliance on contract workers who often bring their families to palm oil plantations in their desperation to meet impossible quotas
  • Wages that can be up to 75 percent lower than what is generally accepted within the industry; the blind eye to child labor
  • And unsafe working conditions, which range from the excessive use of pesticides to the refusal to provide safety equipment to workers

These ongoing controversies led RAN and other NGOs to urge the suspension of Indofood from the Roundtable on Sustainable Palm Oil (RSPO), the body tasked with defining global standards for ethical and responsibly-sourced palm oil. RAN also led a campaign to thwart PepsiCo’s efforts to attract millennial workers at recruiting events on university campuses. Student activists confronted PepsiCo recruiters, saying young professionals will not work for a company with links to documented human rights abuses.

Are any companies driving positive change on how palm oil is grown, produced and distributed? When it comes to progress on supply chain issues, WWF touts the efforts of companies including Danone, General Mills, Kraft Heinz and Unilever in its most recent global palm oil scorecard.

And Lapidus of Mighty noted a turnaround within some of the larger palm oil suppliers in Southeast Asia. “I think the companies that have an open and transparent grievance mechanism for workers should get credit for being further along than their peers,” she said. Those companies include producers Wilmar, Musim Mas, GAR and Asian Agri.

Emma Lierley of RAN, however, insists the entire palm oil industry has a long road ahead before it can genuinely say it is a sector committed to the fair treatment of workers and local communities. “There are no true leaders on these issues, as conflict palm oil is too often associated with indigenous and community land grabbing, forced and child labor, poverty wages, union busting, and reckless exposure to toxic chemicals,” Lierley said.

Image credit: Mighty/Flickr

Based in Fresno, California, Leon Kaye has written for TriplePundit since 2010. He has lived across the U.S., as well as in South Korea, Abu Dhabi and Uruguay. Some of Leon's work can also be found in The Guardian, Sustainable Brands and CleanTechnica. You can follow him on Twitter (@LeonKaye) and Instagram (GreenGoPost).

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