Food giant Nestlé plans to stop sourcing from subsidiaries of Astra Agro Lestari (AAL), a major Indonesian palm oil producer accused by environmental groups of land and human rights abuses.
The move comes as multinationals face increased reputational and legal pressure from consumers and governments to clean up their global supply chains in the fight against climate change.
Nestlé, maker of KitKat chocolate and Nespresso coffee, told Reuters that following a recent independent assessment, it instructed its suppliers to ensure palm oil from three subsidiaries of AAL no longer enters its supply chain.
It did not specify the claims against AAL other than to say it had been on its ‘grievance’ list for several months.
The Swiss-based group expects it will not be using any palm oil from the AAL subsidiaries by the end of the year.
AAL denied the accusations made against it.
“Astra Agro is very serious about implementing our sustainability policy. It is not true that Astra Agro or its subsidiaries carry out land grabbing,” president director of AAL, told Reuters, adding that Nestlé was not a direct buyer of products produced by AAL, but most probably bought from its customers.
The European Commission has proposed several laws aimed at preventing and, in the case of forced labour, banning the import and use of products linked to environmental and human rights abuses.