October 3rd, 2018 – Snack food giant Nestle just announced it has ended its joint venture partnership with notorious bad actor Indofood, one of the largest palm oil companies in Indonesia. This move escalates a growing trend of major companies publicly dropping Indofood, a company involved in ongoing deforestation and human rights abuses. Major Indonesian palm oil company Musim Mas recently announced it cut its business relationship with Indofood and PepsiCo also announced it will stop indirect as well as direct sourcing of palm oil from Indofood, though PepsiCo continues its own joint venture partnership with Indofood.
These decisions ratchet up international pressure on Indofood just as the lead industry certifier, the Roundtable on Sustainable Palm Oil (RSPO), is set to decide if it will suspend Indofood in response to a long-standing complaint documenting labor violations on Indofood plantations–– including cases of child labor, unpaid workers, gender discrimination, precarious employment, union busting, and toxic working conditions.
“This is a strong move by Nestle,” said Robin Averbeck, Agribusiness Campaign Director with Rainforest Action Network (RAN). “Indofood has been caught red-handed exploiting is workers and violating Indonesian law numerous times over the past years. No company, bank or certification system which espouses commitments to uphold human rights and stop deforestation should continue to be in business with Indofood. The fact that so many companies are moving ahead of the RSPO should be a loud wake up call to the certifier that it cannot continue to certify Indofood’s labor abuses as ‘sustainable.’”
Indofood’s banks and lenders include Japanese banks Sumitomo Mitsui Banking Corporation, Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ as well as Rabobank and Standard Chartered. Companies holding joint venture partnerships with Indofood include PepsiCo, Wilmar, and Yum! Brands.