Answer

PepsiCo is a laggard company because its revised palm oil commitment lacks an ambitious deadline for cutting Conflict Palm Oil and failed to apply to all PepsiCo branded products; such as products made by its Joint Venture Partner (JVP), Indofood. We understand that PepsiCo expects its JVPs to comply, but PepsiCo has not yet outlined its plan to enforce its policy in all countries where its products are sold. Given that Indofood manufactures PepsiCo branded products, it is a matter of urgency that PepsiCo require Indofood to halt the destruction of rainforests, peatlands and the abuse of human rights. It is critical that the time-bound implementation plans PepsiCo publishes includes measures to undertake independent verification of its suppliers’ entire operations--the only way to ensure the company, and its JVPs, are not purchasing from companies trafficking Conflict Palm Oil. Given its size and influence, PepsiCo has an opportunity to play a leading role in transforming the palm oil sector in Indonesia, Malaysia and Latin America.

Current Palm Oil Commitment (September 2015):

Has a commitment to source 100% RSPO certified palm oil by 2015 and 100% physical RSPO certified palm oil by 2020

Has a commitment to source palm oil that is traceable to the mill by 2016 and to the plantation by 2020.

Requires suppliers to go beyond the inadequate standards of the Roundtable on Sustainable Palm Oil (RSPO) and end the destruction of rainforests, peatlands and abuse of human and labor rights, with the exemption of Joint Venture Partners such as Indofood.

Commits to terminate the relationship with suppliers when corrective action plans are not implemented.

Commits to release a public time-bound implementation plan, with clear performance based milestones.

Commits to periodically report [its] performance against [its] policy and associated commitments.

 

Weaknesses in Palm Oil Commitment:

Does not apply to all branded products or in all countries where products are made and sold, including by subsidiaries and joint venture partners.

No assertive deadline for eliminating Conflict Palm Oil from all branded products and global operations.

No requirement for compliance across suppliers’ entire operations, but does ‘encourage suppliers to apply responsible palm oil production standards to their entire operations, not just those supplying PepsiCo’.

No requirement for an immediate moratorium on the destruction of rainforests and peatlands across growers’ entire operations.

No requirement for independent verification of supplier compliance with responsible palm oil production practices, including no destruction of rainforests, peatlands or abuse of human and labor rights.

No published procedures to eliminate Conflict Palm Oil suppliers.

No public time-bound implementation plan, with clear performance based milestones for achieving traceable, transparent and independently verified supply chains.

No requirement for public transparency from palm oil growers, refiners, and traders.

Ongoing reliance on discredited RSPO GreenPalm Certificates instead of supply chain transformation.

Current status:

Ongoing sourcing from unknown plantations, high risk regions and high risk supplier Indofood.

Company products at extreme risk of contamination with Conflict Palm Oil

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