LONDON: Food giant Nestle plans to stop sourcing through subsidiaries of Astra Agro Lestari (AAL), a major Indonesian palm oil producer accused by environmental groups of land and human legal rights abuses.
The move provides multinationals face increased reputational and lawful pressure from customers and governments to clean up their global supply chains in the fight against climate change.
Nestle, creator of KitKat chocolates and Nespresso espresso, told Reuters that will following a recent impartial assessment, it instructed its suppliers to make sure palm oil from 3 subsidiaries of AAL no longer enters the supply chain.
It did not designate the claims again AAL other than to express it had been on the “grievance” list for many months.
The Swiss-based group needs it will not be using any palm oil from the AAL subsidiaries by the end of the year.
AAL denied the claims made against this.
“Astra Agro is very serious about implementing our sustainability plan. It is not true that will Astra Agro or even its subsidiaries accomplish land grabbing, ” Mr Santosa, president director of AAL, told Reuters.
He added that Nestle was not an immediate buyer of products produced by AAL, several probably bought from its customers.
“Astra Agro conducts every day physical spot product sales, a common practice in the commodity business, therefore the direct impact of this issue is negligible, ” he mentioned.
The Western Commission has suggested several laws aimed at preventing and, in the case of forced labour, banning the import plus use of products connected to environmental and individual rights abuses.
Friends of the Earth said Nestle’s move to stop sourcing from AAL is an important “first step” and restored its call on customer majors such as Procter & Gamble, Hershey’s, Kellogg’s, Unilever plus PepsiCo to follow match.
“Nestle and other consumer giants now have a monumental opportunity to ensure grievances are usually redressed, conflicts are resolved, and proper rights is delivered to communities, ” the environmental team said in a statement.