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October 11, 2016

Amid Controversy, NGOs Call for Suspension of Palm Oil Giant Indofood from RSPO

After a second scathing investigation documents systemic labor violations on Indofood palm oil plantations in Indonesia, groups call for action from the RSPO

FOR IMMEDIATE RELEASE

CONTACT: Emma Rae Lierley, +1.425.281.1989, Emma@ran.org

San Francisco, CA - Rainforest Action Network (RAN), Indonesian labor rights advocacy organization OPPUK, and International Labor Rights Forum (ILRF) lodged a formal complaint today against palm oil giant Indofood with the Roundtable on Sustainable Palm Oil (RSPO), the industry’s largest certification scheme. Indofood is the largest private palm oil plantation company in Indonesia which has yet to adopt a commitment to using only responsibly produced palm oil. The company is a major joint venture partner of global snack food brand PepsiCo.

RAN, OPPUK, and ILRF are calling for the suspension of two of Indofood’s palm oil plantation subsidiaries––PT. PP London Sumatra Indonesia Tbk. (Lonsum) and PT. Salim Ivomas Pratama Tbk. (Salim Ivomas)––from the RSPO for egregious labor rights violations documented on multiple Lonsum plantations. In both an independent report and in a report filed recently by the RSPO’s own accreditation body, Indofood was found in violation of both the RSPO Principles & Criteria, as well as the RSPO Code of Conduct.

“It is time for the RSPO to act in the interest of palm oil workers. The evidence is clear: Indofood is systematically violating the fundamental rights of workers on its palm oil plantations,” said Herwin Nasution, Executive Director of OPPUK. “The RSPO must hold its members accountable to its standards, and when egregious violations are found, such as those found by us and corroborated by ASI, the RSPO must suspend its member.”

In June 2016, RAN, OPPUK, and ILRF released the report “The Human Cost of Conflict Palm Oil: Indofood, PepsiCo’s Hidden Link to Worker Exploitation in Indonesia,” which documented abuses including the use of child labor, exposure of workers to highly hazardous pesticides, payment below the minimum wage, long-term reliance on temporary workers to fill core jobs, and suppression of independent labor union activity on two Indofood plantations.

In response to the previous report, Accreditation Services International (ASI), the accreditation body to the RSPO, carried out an assessment on a third Indofood plantation. ASI’s report was released in September 2016, and found similarly widespread violations of Indonesian labor law, unsafe and inconsistent practices for use and storage of pesticides, a lack of contracts for casual workers prior to 2016, contract terms for casual workers which prevent them from meeting the basic minimum wage, lack of registration for social benefits for all workers, and discriminatory employment terms.

The complaint also highlights that Indofood has been unwilling to engage the complainants over the allegations raised, which is in violation of the RSPO Code of Conduct, that states “[RSPO] members will commit to open and transparent engagement with interested parties, and actively seek resolution of conflict.” Indofood was given the opportunity to respond to the key findings of RAN, OPPUK, and ILRF’s report prior to publication and repeatedly invited to engage in dialogue. Indofood, however, declined to comment on the findings of the report. Indofood director Franciscus Welirang said, in response to the report, in an interview with the leading Indonesian newspaper, The Jakarta Post, that “the practice of hiring children to meet the high quotas was an acceptable part of Indonesian culture.”

“Plantations in Indonesia are usually close to villages and thus there’s a plantation culture based on targets. It’s standard for families to ask for help [from their children],” Welirang was quoted by The Jakarta Post.

The Jakarta Post went on to further report, “According to Franciscus, however, this does not mean that Indofood condones the practice, since its policy explicitly bans the use of underage workers. ‘There’s a law in Indonesia and we are in compliance but there’s also a culture that cannot be perceived as the same as Western culture.’”

“Any RSPO-certified company unwilling to engage in dialogue over well-documented violations in their operations should be suspended,” said Eric Gottwald, Legal & Policy Director at the International Labor Rights Forum. “The RSPO must enforce its rules.”

Numerous Indofood buyers, joint venture partners, and financiers were called out in “The Human Cost of Conflict Palm Oil: Indofood, PepsiCo’s Hidden Link to Worker Exploitation in Indonesia,” for relationships with Indofood, its plantation arm IndoAgri, and its parent company First Pacific. These include PepsiCo, Nestle, Unilever, Procter & Gamble, Musim Mas, Golden Agri Resources, and Wilmar; Japanese banks Sumitomo Mitsui Financial Group, Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ; European banks HSBC, Rabobank, Standard Chartered, BNP Paribas and Deutsche Bank; and US-based Citibank. PepsiCo in particular has been the target of a major public campaign related to Indofood as it released an updated palm oil policy in September 2015 which exempts Indofood from meeting the same responsible production standards set for PepsiCo’s other palm oil suppliers.

“Indofood buyers, business partners and investors must  enforce their own policies by suspending relationships with Indofood if the company does not take public action to address the exploitative Conflict Palm Oil practices documented in its operations,” said Gemma Tillack, Agribusiness Campaign Director with Rainforest Action Network (RAN). “Indofood is increasingly falling behind the curve on responsible palm oil production. Joint venture partners like PepsiCo must force a change or cut its ties.”  

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Rainforest Action Network runs hard-hitting campaigns to break North America’s fossil fuels addiction, protect endangered forests and Indigenous rights, and stop destructive investments around the world through education, grassroots organizing, and non-violent direct action. For more information, please visit:www.ran.org

The International Labor Rights Forum (ILRF) is a human rights advocacy organization dedicated to achieving just and humane conditions for workers worldwide. ILRF works with trade unions and community-based labor rights advocates to expose violations of workers’ rights, including child and forced labor, discrimination, and violations of workers’ rights to organize and bargain collectively.

OPPUK is an Indonesian labor organization founded in 2005 by student activists and workers concerned about palm oil workers’ working and living conditions in North Sumatra, Indonesia. OPPUK organizes and educates workers, conducts research and advocacy, and campaigns for the rights of palm oil workers in North Sumatra and Indonesia more broadly.

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