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April 13, 2018

New Report Confirms Labor Abuse and Legal Violations on Major Indonesian Palm Oil Company Linked to PepsiCo, Nestlé

NGOs call for immediate action; RSPO must suspend ‘sustainability’ certification after further confirmation of worker exploitation

FOR IMMEDIATE RELEASE
CONTACT: Emma Rae Lierley, +1 425 281 1989, Emma@ran.org

San Francisco, CA - This week, a report was released verifying ongoing labor abuses and legal violations on palm oil plantations belonging to Indofood—the largest private palm oil plantation company in Indonesia which has yet to adopt a commitment to responsibly produce palm oil. This latest report adds to a growing documentation of exploitation on the company’s palm oil plantations.

Indofood has wide connections to the global market, including major joint venture partnerships with global snack food brands like PepsiCo and Nestle and with palm oil trader Wilmar, via its parent company First Pacific. The report found “repeated and systemic failures” that included legal violations on overtime, casual workers, and Freedom of Association. The report was released by Accreditation Services International (ASI), the accreditation body of the Roundtable on Sustainable Palm Oil (RSPO), the palm oil industry’s largest certification scheme.

“The RSPO has failed to sanction its member Indofood for abuses to workers’ basic rights for nearly two years. How much more evidence will it take?” said Herwin Nasution, Executive Director of OPPUK. “Enough is enough. We are calling on the RSPO for no more delays and for immediate suspension of Indofood. Only when Indofood has been independently verified to abide by the RSPO standards and Indonesian law should it be allowed back into the RSPO.”

This is the second assessment that ASI has carried out in response to Rainforest Action Network (RAN), Indonesian labor rights advocacy organization OPPUK, and International Labor Rights Forum (ILRF)’s reports and formal complaint in October 2016 against Indofood with the RSPO. ASI’s first assessment resulted in the suspension of SAI Global, the firm certifying Indofood’s plantations, in December 2016. SAI Global was then reinstated by ASI in July 2017. However, in November 2017, a second report by RAN, OPPUK and ILRF showed that Indofood continued to perpetuate labor abuses and violate Indonesian labor law and the RSPO Principles and Criteria, all while being RSPO certified by SAI Global.

“ASI’s latest investigation into Indofood and its certification body SAI Global is confirmation of what we have known for years: Indofood is systematically abusing workers rights and the RSPO is systematically whitewashing these violations with its phony “sustainable” palm oil label,” said Robin Averbeck, Agribusiness Campaign Director at RAN. “This investigation casts serious doubt on the integrity of the entire RSPO system — auditors are suspended and reinstated but then found again to be failing in the same ways; the RSPO has failed to sanction its member despite a years old complaint; and Indofood continues to earn profits for selling certified oil while violating workers’ rights. These issues must be addressed at their core—nothing less than the survival of the RSPO system is at stake.”

“Indofood buyers, business partners and investors have piles of evidence showing Indofood’s labor abuses and legal violations and must take urgent action to enforce their own policies by suspending relationships with Indofood immediately,” said Eric Gottwald, Legal and Policy Director at the International Labor Rights Forum (ILRF). “Joint venture partners like PepsiCo, Nestle, and Wilmar must use their business influence to move Indofood towards responsible palm oil production.”

Further, the ASI report adds to growing documentation of the social and environmental impacts of operations controlled by Indofood, as well as the wider Salim Group conglomerate of companies of which Indofood is a part. A report released earlier this week confirmed that Citigroup has responded to inaction at the highest levels of The Salim Group by canceling all loans to IndoAgri and its subsidiaries, with immediate effect. This is the first time that a US bank has dropped financing for a palm company over environmental, social and governance risks associated with its investments in the company.

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ASI assessment: http://www.accreditation-services.com/s/assessment/a1P1H000003MkldUAC/a20171118679

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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