On March 12, Domini and Green Century Capital Management sent a letter to the Roundtable on Sustainable Palm Oil (RSPO) concerning human rights violations in RSPO members’ palm oil production. The letter was co-signed by 100 institutional investors from around the world representing $3.2 trillion in assets under management.
The investor letter calls on the RSPO to implement a more transparent and responsive complaints mechanism to properly uphold the credibility of its certification system to assure investors, companies and other stakeholders that the RSPO will not certify conflict palm oil.
The RSPO is the leading industry certification system which aims to certify the sustainable production of palm oil. Its more than 3,000 members, representing “all links along the palm oil supply chain”, have committed to produce, source and/or use sustainable palm oil certified by the RSPO. These companies, and their investors and consumers, rely on RSPO certification to offer assurances that palm oil, which is used in products ranging from soaps to cosmetics to food, is produced without impacting forests or the rights of workers and local communities.
The investor letter expresses our deep concerns that the RSPO is inadequately dealing with complaints pertaining to violations of its standards. Over the past two years, high-profile media stories and NGO reports have exposed serious labor rights violations within the operations of RSPO member companies, such as forced and bonded labor, child labor and systemic gender discrimination.
Our letter highlights a formal complaint filed in October 2016 by Rainforest Action Network (RAN), International Labor Rights Forum (ILRF), and Indonesian labor advocacy organization OPPUK against Indofood Sukses Makmur (“Indofood”)’s palm oil subsidiaries PT PP London Sumatra Indonesia Tbk and its parent company PT Salim Ivomas Pratama Tbk. The complaint, which alleges serious labor abuses and legal violations, is the first formally filed with the RSPO to focus on labor rights abuses. A recent report published by RAN, ILRF and OPPUK claims that these abuses are continuing today.
In 2014, Domini helped convince PepsiCo to adopt its first policy addressing deforestation, including a policy on palm oil. Pepsi maintains a joint-venture relationship with Indofood for production and distribution of its products in Indonesia. In January, Pepsi announced the suspension of palm oil purchases from IndoAgri (the parent company of the two entities that are the subject of the complaint) within its joint venture, pending further investigation. We have been in dialogue with the company over the past year about its palm oil sourcing practices and, in particular, its ongoing business relationship with Indofood.
We are hopeful that our letter will prompt immediate action by the RSPO to act on this pending complaint and to move towards a more responsive and transparent grievance mechanism.