Nestlé and PepsiCo, both long time business partners of Indofood, have ended direct and indirect sourcing of palm oil from IndoAgri, a Singapore-listed subsidiary of Indofood, due to concerns over ongoing deforestation and human rights abuses within its operations. In an updated statement on its palm oil policy in Indonesia, PepsiCo said that it has decided to suspend sourcing palm oil from IndoAgri to its joint venture with Indofood, “pending further progress and visibility” around allegations of labour violations on its plantations. Nestlé has also stated on its website that it had agreed to close its joint venture with Indofood Group in September 2018 for “commercial reasons”, including it in a list of companies that have been or are in the process of being removed from Nestlé supply chains. Agribusiness campaign director Robin Averbeck from the Rainforest Action Network, a US-based non-government organisation (NGO) that has actively campaigned against Indofood for years, called the decision by Nestlé a strong move, adding: “No company, bank or certification system which espouses commitments to uphold human rights and stop deforestation should continue to be in business with Indofood.” Averbeck pointed to Indofood’s history of labour and environmental violations, which have been exposed in numerous reports by NGOs such as RAN. Together with the International Labor Rights Forum and Indonesian labour rights group OPPUK, RAN conducted a 2015 probe into workers’ conditions on Indofood’s certified plantations in North Sumatra. The investigation revealed instances of forced labour, dangerous working conditions and poverty-level wages that resulted in the NGOs leading a joint complaint in 2016 to the Roundtable on Sustainable Palm Oil, the industry’s largest certification body. In 2017, IndoAgri revised its policy on sustainable palm oil, but it was criticised by NGOs as falling short of demands.

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