Nestlé has ended its joint venture partnership with Indofood, the Indonesian palm oil supplier accused of workers’ rights abuse and deforestation.
A week after PepsiCo confirmed it had put a complete stop on palm oil sourcing from Indofood amid mounting pressure from campaigners, Nestlé has revealed it closed its joint venture, which manufactured food products in Indonesia, last month.
A statement published on the palm oil policy section of its website said: ”Nestlé and Indofood Group agreed to close the joint venture in September 2018 for commercial reasons.”
The Rainforest Action Network (RAN) has claimed the decision as a victory in its campaign against Indofood, which is currently the subject of a complaint to the Roundtable on Sustainable Palm Oil (RSPO) over alleged labour violations on its palm oil plantations.
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“This is a strong move by Nestlé,” said Robin Averbeck, agribusiness campaign director with RAN. “No company, bank or certification system which espouses commitments to uphold human rights and stop deforestation should continue to be in business with Indofood.”
Nestlé took over all sourcing of palm oil for its products manufactured by the joint venture in 2016, when environmental and workers’ rights groups first raised the complaint against Indofood with the RSPO.
But with the complaint still to be resolved, it had come under growing pressure from campaigners to sever all ties with Indofood.
PepsiCo confirmed last week it had put a complete stop to palm oil sourcing from Indofood’s palm oil supplier arm IndoAgri, though it has so far continued its joint venture with the Indonesian company.
IndoFood has strongly denied the allegations of labour issues at its palm oil plantations. “No substantive facts, evidence or supporting documents have been provided to us to support these allegations,” it said in June.
The palm oil supplier insisted it had “complied fully “with the RSPO complaints procedure, which has included an independent investigation at its sites and stressed its “plantations remain certified under RSPO”.
The Grocer understands the RSPO is set to announce the findings of its investigation into Indofood and its final decision on whether the company can remain certified imminently.
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