Indofood: A Massive Loophole for Conflict Palm Oil

Following two years of escalating public outcry over its use of Conflict Palm Oil, PepsiCo released a new palm oil commitment on September 21, 2015 that environmental and human rights organizations immediately labeled as both inadequate and incomplete. 

PepsiCo’s newly announced commitment specifically exempts its joint venture partner Indofood from adhering to its heightened social and environmental standards. Indofood produces the PepsiCo products containing palm oil in Indonesia. It is the third largest private palm oil company in Indonesia and remains the last company among the top three palm oil growers yet to adopt a responsible palm oil policy.

A report released today by Rainforest Action Network and Rainforest Foundation Norway and written by Aidenvironment, titled “Palm Oil Sustainability Assessment of Indofood Agri Resources,” presents an assessment of Indofood’s policies and practices against the higher responsible palm oil production standards set by its competitors and customers. Research, satellite analysis, field investigations and interviews with civil society groups identified a number of cases that demonstrate “business as usual” practices for Indofood means the clearing and burning of rainforests and long-standing cases of social conflict and human rights violations.

The report also highlights Norway’s Government Pension Fund Global, one of the world’s largest investors, which has shares in a parent company of Indofood. The Norwegian Pension Fund has recently excluded companies similar to Indofood from its investments portfolio due to violations of the Pension Fund’s ethical guidelines. It is recommended that the Norwegian Pension Fund investigate the activities of Indofood and consider exclusion or divestment from Indofood’s parent company if the policies and practice of the company are not improved significantly.