On 30th November 2016 Amnesty International released a report called “The Great Palm Oil Scandal: Labour Abuses Behind Big Brands Names.” The report investigated labour exploitation on plantations in Indonesia that provide palm oil to Wilmar, one of the world’s largest processors and merchandisers of palm and lauric (palm kernel) oils, which controls over 43% of the global palm oil trade. The report also traced the palm oil produced in Indonesia for Wilmar to a range of consumer goods
companies that use palm oil in their products.
Amnesty International found serious human rights abuses on the plantations of Wilmar and its suppliers. These included forced labour and child labour, gender discrimination, as well as exploitative and dangerous working practices that put the health of workers at risk. The abuses identified were not isolated incidents but due to systemic business practices by Wilmar’s subsidiaries and suppliers, in particular the low level of wages, the use of targets and ‘piece rates’ (where workers are paid based on tasks completed rather than hours worked), and the use of a complex system of financial and other penalties. Workers, especially women, were employed under casual work arrangements, which made them vulnerable to abuses.
Amnesty stated “All of these are obvious and predictable areas of concern and risk. However, none of the companies that buy palm oil from Wilmar could demonstrate to Amnesty International that they had identified and addressed the actual abuses documented by Amnesty International.”
Nestlé said “…we confirm that we source, indirectly, palm oil from all refineries mentioned in
your letter, with the exception of PT Wilmar Nabati Indonesia in Bagendang, which we do not source from at all.”
Nestlé told Amnesty International that it had been monitoring Wilmar for human rights related reasons since 2010. Despite this claim, Nestlé did not appear to have identified the severe labour abuses investigated by Amnesty International on Wilmar’s and its suppliers’ plantations. Nestlé said that it had suspended a portion of trade with Wilmar from 2010 to 2012 for reasons related to environmental practices. In a letter to Amnesty International, the company said that: “…origins of a
proportion of palm oil provided [by Wilmar] were not in alignment with RSG [Responsible Sourcing Guidelines]. However, following extensive engagement we received assurances that it would change its practices, and our full commercial relationship restarted.”
Nestlé said that between the years of 2010 and 2013 the company was “…also gathering information on human rights issues during this period.” In relation to Wilmar, it said that “56.06% (25,587 tonnes) [of palm oil] is being monitored through our Responsible Sourcing Action Plan”. It stated: “Wilmar does not currently comply with all Nestlé’s RSG requirements yet”, but that Wilmar “…has made a policy commitment, with a time bound Aggregator Refinery Transformation (ART) plan.” Amnesty said that the ART plan was extremely limited in scope. While Nestlé states that Wilmar was non-compliant with parts of its own RSG policy, it did not disclose whether this non-compliance relates to labour standards.
In response to Amnesty International’s findings, Nestlé stated that: “We believe that our due diligence system, based upon the various steps noted above (risk assessment, supply chain transparency, on the ground assessments and action plans with suppliers, backed by suspending suppliers who are unwilling to improve) is a strong one.” However, despite its detailed response, Nestlé failed to demonstrate that it had, through its internal processes, identified labour risks or abuses linked to Wilmar’s Indonesian palm oil supply prior to being contacted by Amnesty International.
Nestlé therefore lost half a mark under Palm Oil and a whole mark under Workers' Rights.