San Francisco, CA – Today the world’s largest palm oil certification scheme, the Roundtable on Sustainable Palm Oil (RSPO), ordered the suspension of the “sustainability” certificates of Indonesian palm oil giant Indofood’s subsidiary, London Sumatra (Lonsum).
This is the latest episode in an ongoing saga with the company after over twenty violations of the RSPO’s standard and 10 violations of Indonesian labor law were found in a RSPO investigation. 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’s decision to finally suspend Lonsum’s RSPO certificates is a step forward but RSPO should not be half-hearted in enforcing its standard. Now the RSPO must suspend Indofood’s RSPO membership until it addresses the systemic labor abuses on its plantations,” said Herwin Nasution, Executive Director of Indonesian labor rights organization OPPUK. “The RSPO cannot let Indofood continue to profit off labor abuses whitewashed under a faulty “sustainability” label. Indofood’s workers and plantation workers across the world deserve to know that their rights will be respected and upheld by the RSPO, or any certification system claiming to certify fair working conditions.”
The suspension of Lonsum’s RSPO certificates comes after Indofood announced its plans to withdraw from the certification scheme over two weeks ago rather than comply with a RSPO decision that the company needed to submit an action plan addressing the labor abuses on its plantations. The RSPO further warned that it will terminate the RSPO membership of Lonsum’s parent company, Salim Ivomas, if no action is taken within the time frame given. Indofood is one of the largest palm oil companies in Indonesia, and will be the largest to lose its RSPO membership if sanctioned.
“Indofood has shown its true colors by threatening its withdrawal from the RSPO,” said Eric Gottwald, Deputy Director at International Labor Rights Forum (ILRF). “Rather than step up and address its well-documented labor abuses, Indofood is acting like a tempestuous child — throwing a tantrum rather than cleaning up its own mess. Such actions cannot be tolerated by reputable actors around the globe.”
Many palm oil buyers claim 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).
“Simply put, any company still doing business with Indofood following this fiasco, not to mention the years of ongoing labor abuse, is signing off on illegal and unethical behavior,” said Robin Averbeck, Agribusiness Campaign Director with Rainforest Action Network (RAN). “All companies must cut ties with Indofood now.”
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.