PepsiCo and Friesland stop the supply of palm oil from an Indonesian company

Food giants PepsiCo and FrieslandCampina have urged suppliers to stop buying palm oil from Indonesia’s Astra Agro Lestari.

The decisions by the US and Dutch firms are linked to a report in March last year by Friends of the Earth and its parent NGO The Indonesian Forum for Environment (Wahli) denouncing abuse of power by Astra Agro Lestari (AAL) in Central and West Sulawesi.

“AAL has faced increasing pressure over the past year after a report released in March 2022 by Walhi and Friends of the Earth US documented how AAL subsidiaries operated on community land without their consent and they criminalized local farmers and environmental human rights defenders,” said the A US-based NGO wrote in a statement last week acknowledging the actions of PepsiCo and FrieslandCampina.

Uli Arta Siagian, a forestry and plantation activist from Wahli, added: “These suspensions show that AAL’s destructive practices do not go unnoticed. AAL must read the writing on the wall and return the land to the communities that was taken without their consent. AAL must also provide compensation for the loss of livelihoods, clear the good name of those who have been wrongfully criminalized and issue an apology for their abuses.”

AAL had not responded to just food request for comment at the time of writing. Friends of the Earth confirmed through a spokesperson that the NGO has been in dialogue with the Indonesian firm and AAL shareholders, such as the US investment giant BlackRock.

The Indonesia business is owned by Jakarta-based Astra International, which in turn falls under the umbrella of global conglomerate Jardine Matheson.

In a sweeping jab, Wahli leveled criticism of CPG companies but, in PepsiCo’s case, acknowledged that the food and beverage maker has suspended palm oil supplies from five mills “potentially linked to AAL’s destructive operations.” .

“Consumer goods companies continue to rake in billions of dollars in profit while sourcing from palm oil companies that terrorize farmers and communities. They must use their global platforms and brand recognition to demand that AAL repair the damage it has caused,” Wahli’s statement continued.

Meanwhile, PepsiCo said in a statement provided to just food: “We are very concerned about the allegations made against Astra Agro Lestari (AAL) and are reviewing them through our established complaints process. Although PepsiCo does not source directly from AAL, we are working with the suppliers that continue to source from them and have asked them to suspend the mills identified as potentially linked to the complaint and the underlying allegations.

“We are committed to playing our part in achieving our goal of transforming the palm oil sector and sourcing 100% sustainable palm oil.”

FrieslandCampina also provided a statement noting that “responsible purchasing with respect for the environment, biodiversity and human rights is important to us.”

The dairy company added: “In October 2022, we received critical questions from an NGO. This motivated us to do more research. Based on the findings, we ask our supplier to no longer source materials from this palm oil producer.”

PepsiCo and FrieslandCampina are not the first food companies to have complaints with AAL. Nestlé and Hershey suspended supplies of palm oil last year, the two companies confirmed. Procter & Gamble (P&G), a major US-based producer of consumer goods, had also launched its own independent investigation into the Indonesian company. just food is to clarify the current position of the company.

According to Friends of the Earth and Walhi, who has been a member of the NGO since 1989, the two organizations’ own investigations focused on “land grabbing, human rights violations and environmental destruction in Indonesia”.

In a statement issued last October, they said: “Wahli and Friends of the Earth US first raised concerns in 2020 about abuses by AAL subsidiaries in Central and West Sulawesi.”

Gaurav Madan, senior forest and land rights activist for Friends of the Earth USA, said at the time: “Consumer goods giants need to recognize that the dominant model of industrial agricultural production is based on environmental destruction and land theft. It is time for companies and investors to heed the growing calls for a just transition away from industrial agribusiness.”

hershey said just food the candy maker suspended AAL, as an “indirect supplier,” last September.

“At that time, we notify our direct suppliers that AAL will remain on hold until it can produce time-bound corrective action plans and demonstrate and verify implementation of those action plans. Only at that time will we reconsider whether AAL is eligible to re-enter our supply chain,” Hershey said in a statement.

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James D. Brown
James D. Brown
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