Palm Oil Giant Indofood Plans to Withdraws from RSPO Over Labor Abuses; RSPO Threatens to Suspend Membership

PepsiCo, Wilmar, and Banks remain connected, must terminate partnerships, NGOs say

San Francisco, CA – Indonesian palm oil giant Indofood has announced its plans to withdraw from the world’s largest palm oil certification scheme, the Roundtable on Sustainable Palm Oil (RSPO). Indofood failed to submit a corrective action plan, as required by the RSPO in November 2018, to address over twenty violations of the RSPO’s standard, as well as 10 violations of Indonesian labor law, found on Indofood facilities.

“The time has come to call Indofood out for what it really is: a company with especially atrocious practices, in an industry not known for its high standards. We’ve known for years that Indofood was anything but sustainable, and it’s high time the RSPO enforced it’s certification standard and membership rules,” said Herwin Nasution, Executive Director of Indonesian labor rights organization OPPUK. “Indofood’s withdrawal from the RSPO is yet another demonstration of the company’s refusal to address systemic labor abuses.”

The investigation of Indofood’s palm oil plantations was sparked by a complaint against the company, brought by Rainforest Action Network (RAN), International Labor Rights Forum (ILRF) and Indonesian labor rights organization OPPUK, in October 2016. The RSPO is expected to suspend Indofood from its certification, but has yet to take action. The RSPO released a letter to Indofood this morning, giving it until the end of the day to respond. Indofood is one of the largest palm oil companies in Indonesia, and would be the largest to lose its RSPO membership should the RSPO act. NGOs claim the move from Indofood is an attempt to evade it’s responsibilities to respect the rights of its workers –– a move the RSPO has warned against. Indofood is one of the largest palm oil companies in Indonesia, and now the largest to lose its RSPO membership.

“This must be the last straw for all companies still doing business with Indofood,” said Robin Averbeck, Agribusiness Campaign Director with Rainforest Action Network (RAN). “PepsiCo and Wilmar have stopped sourcing IndoAgri’s palm oil, it’s past time they terminate their joint venture partnerships with this company. Otherwise, they knowingly continue to do business with a company engaging in illegal and unethical behavior without compunction.”

Many palm oil buyers have claimed to have cut ties with Indofood prior to this sanction, including Nestle, Musim Mas, Cargill, Fuji Oil, Hershey’s, Kellogg’s, General Mills, Unilever, and Mars. However, many companies still do business with Indofood and remain connected to its labor abuses, including joint venture partners PepsiCo, Wilmar and Yum! Brands, as well as investors and lenders to Indofood, like BlackRock, Rabobank and Japanese banks SMBC Group, Mizuho Financial Group and Mitsubishi UFJ Financial Group (MUFG).

In its announcement, Indofood stated that it will focus its sustainability efforts on the mandatory Indonesian Sustainable Palm Oil (ISPO). Indonesian civil society groups have similarly criticized ISPO as being inadequate in ensuring sustainable palm oil practices.

RAN, ILRF and OPPUK continue to call on Indofood to address the ongoing labor violations, and adopt a comprehensive ‘No Deforestation, No Peatland, and No Exploitation’ policy that applies to Indofood, the entire Salim Group and all third-party suppliers.