PepsiCo and FrieslandCampina have suspended imports from Astra Agro Lestari (AAL), Indonesia’s second-largest palm oil company, following an investigation into environmental and human rights violations committed in Central and West Sulawesi, Indonesia. The US and Dutch multinationals are the latest in a long line of consumer brands to cut ties with the company.
PepsiCo has notified the US Friends of the Earth that the company has suspended palm oil imports from five factories in connection with AAL. FrieslandCampina has also suspended all AAL procurement and is encouraging other companies to do the same.
Both companies join six other major consumer goods companies in cutting ties with AAL, including Hershey’s, Nestle, and Procter & Gamble.
Global Concerns
AAL has come under increasing scrutiny in the last year, following the release of a March 2022 report by WALHI and the US Friends of the Earth. The cases had become global concerns when indigenous people and international civil society joined together to call for justice for the negative consequences of AAL’s operations. “The suspension proved that AAL practices does not go unnoticed,” said Uli Arta Siagian, a campaigner of the Indonesia Friends of The Earth (WALHI), in a statement on March 16, 2023.
“For communities on the frontlines of a violent system of industrial or agricultural production, justice delayed is justice denied. It is unacceptable for the world’s leading brands to pay lip service to sustainability while continuing to source palm oil from AAL and other destructive suppliers. If the company and investors want to get on the right side of history, they must suspend all business with AAL”, said Gaurav Madan, Senior Forests and Lands Campaigner at the US Friends of the Earth.
“We applaud FrieslandCampina’s decision to suspend AAL from its suppliers, as well as its encouragements to other companies to stop sourcing from AAL. If other leading brands such as Unilever and investors are really care about human rights and the wellbeing of local communities, they should follow this example and suspend AAL,” said Wouter Kolk from Milieudefensie or The Friends of the Earth Netherlands.
For AAL, it’s a baseless accusations
AAL and its parent companies Astra International and Jardine Matheson has received significant investments from U.S. asset managers BlackRock and Vanguard, as well as financing from the Norwegian Global Pension Fund.
BlackRock has previously committed to upholding the international standard of Free, Prior and Informed Consent (FPIC), a specific right that pertains to indigenous peoples, as well as monitoring land conflicts as part of its human rights due diligence. Despite publishing these commitments, the Wall Street giant has little to show for its ongoing engagement or its paper-thin obligations to human rights.
President Director of AAL, Santoso, is now inviting PepsiCo and FrieslandCampina for a dialog and to directly see the application of Human Rights in the company’s operation. “We do not want to engage in a debate about Astra Argo’s commitment to the sustainability principles, it is better for us to show real actions so people can feel the benefits,” he said in a statement.
Santoso also said the accusations by Friends of Earth and EcoNusantara are baseless. AAL has clarified the accusations directly to stakeholders. “For objectivity, Astra Argo will appoint independent institution to do the field investigation to see the real situation. It will be reported to all stakeholders so they will know what is actually happening,” he added.
Despite the fact that eight prominent consumer goods companies have severed ties with the company, members of the Consumer Goods Forum, including Mondelez, Kellogg, and Unilever, continue to import and working with AAL.
