The Palm Scribe

PepsiCo Updates its Commitments to Promote Sustainable Palm Oil Production.

palm oil workers

The world’s second largest food and drink company PepsiCo, has come out with a renewed commitment to promote sustainable palm oil production, including by only buying palm oil that does not cause deforestation, is not developed on peat and does not exploit the rights of indigenous peoples, workers and local communities.

“PepsiCo is committed to using its role in the global supply chain to promote sustainable production. We strive to source only sustainable palm oil while helping to lift production standards across the broader palm oil sector,” Dave Yawman, PepsiCo Executive Vice President of Governmental Affairs, General Counsel and Corporate Secretary, said in a February statement uploaded on the company’s website.

In an appendix to the statement, PepsiCo also said that it is aiming at being able to trace 100 percent of its palm oil to mills and plantations by the end of 2020. It is also aiming at sourcing 100 percent physically certified Roundtable on Sustainable Palm Oil (RSPO) by the end of 2020.

It said that the company endorses RSPO as the leading global sustainability standard for palm oil production and continued to require all its direct suppliers to be members of RSPO.

He said in the statement issued to update the company’s policy on sustainable palm oil, that PepsiCo believed acting ethically and responsibly was not only the right thing to do but also the right thing to do for its business.

“As we seek to expand the benefits of sustainable palm oil while working to eliminate the harm that may be done, it is important to address standards in our own supply chain while addressing systemic issues in partnership with others… so that high environmental standards become the norm and human rights are respected,” Yawman said explaining the company’s Global Policy on Sustainable Palm Oil.

The company’s Global Policy on Sustainable Palm Oil, he said, included commitments to no deforestation, no development on peat, and no exploitation of the rights of indigenous peoples, workers and local communities (NDPE).

“It applies to all palm and palm kernel oil that we use globally and covers our entire supply chain, from direct suppliers to production sources at the group level, meaning NDPE should be applied across their entire operations and third-party supply chain and not limited solely to the palm oil sold to PepsiCo,” Yawman said in the statement.

The company aims at continuing to actively assess risk of NDPE noncompliance among its global palm oil suppliers and source countries, including implementation of independent verification of NDPE compliance, such as through the use of satellite monitoring of deforestation and peatland clearance and social risk assessments in its supply chain.

PepsiCo believed that palm oil is an important edible oil crop that employs millions of people, supports farmer livelihoods, contributes to economic development, and requires less land to produce more oil than any other vegetable oil crop. But the rapid expansion of oil palm plantations has caused deforestation and the conversion of peatlands, both of which contribute to climate change and other environmental impacts.

Also read: NGO Calls for Better Accountability in Permit System and Corruption Prevention.

Palm oil production has also led to significant concerns over human rights abuses and the exploitation of indigenous people, workers and local communities, the company said.

To achieve its long-term vision for a sustainable palm oil industry and meet its NDPE commitments, PepsiCo aims to promote greater transparency in its supply chain while proactively assess the risk of noncompliance and take action to resolve issues when they are found.

PepsiCo, Yawman said, will engage with industry and external stakeholders to drive towards a common understanding on the role of independent verification of NDPE and how it could be structured and applied in practice, including in PepsiCo’s supply chain and the industry more generally.

He said that PepsiCo will also consistently engage in dialogue and collaboration with a broad set of stakeholders, including affected communities and workers, suppliers, peers, civil society, governments and others, including the RSPO.

The company also supported the inclusion of smallholder farmers into sustainable palm oil supply chains and that palm oil production must follow the United Nations Guiding Principles on Business and Human Rights, adhere to the International Bill of Human Rights and the International Labor Organization Declaration on Fundamental Principles and Rights at Work.

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