Global food and beverage company Nestlé announced today the launch of its upgraded 2021-2025 action plan aimed at addressing labor rights issues in the palm oil sector.

Nestlé’s initiative follows an assessment conducted by Verité, a global, independent, non-profit organization with a mission to ensure that people worldwide work under safe, fair, and legal conditions. Verité recently created and launched a new toolkit to help palm oil producers address human rights issues, supported by Nestlé and Mars Incorporated.

Palm oil is a key ingredient for food manufacturers, but sourcing the oil presents significant sustainability challenges for companies, including deforestation and labor rights. According to Verité, palm plantations and oil mills require labor-intensive processes, with oil palm estates and production facilities are typically established on vast landholdings in locations remote from town and city centers. Labor rights risks in the industry include low wages, inadequate social security, unsafe conditions, unreasonable movement restrictions, limited access to communication, child labor, unequal treatment of women, and withholding of wages, among others.

Nestlé is a major user of palm oil, sourcing approximately 453,000 MT in 2020. The company sources palm oil from 88 suppliers, originating from at least 1,672 mills in 21 countries, with most originating in Malaysia and Indonesia, and other sources ranging across Latin America, Africa, and other parts of Asia.

Under its new action plan, Nestlé has developed a framework that will help the company prioritize supplier engagement and systematically take action based on suppliers’ risk profile and their capacity to address labor rights issues. Under the framework, the company will work with external partners to develop corrective action plans for suppliers and put monitoring systems in place to track against a set of key performance indicators. The company also stated that it will deploy, together with its suppliers, specific guidance and tools to improve recruitment practices and the working and living conditions of workers, and will provide effective and safe communication channels for workers in its supply chain to report issues.

In addition, Nestlé said that it will participate in several landscape projects that aim to improve production practices in key production regions to be more environmentally and socially responsible.

The action plan also includes commitments to report on the company’s progress on its initiatives, with specific KPIs disclosed in its annual Palm Oil Responsible Sourcing Progress report.

Benjamin Ware, Global Head of Sustainable Sourcing and Climate Delivery, Nestlé, said:

“Our vision is of a sustainable palm oil sector – where nature is protected and restored, where human rights and labor rights are respected, where workers and smallholder farmers are offered decent working conditions and livelihoods. The updated action plan we are launching today provides a clearer, more robust guideline to take action in our supply chain with our partners and suppliers and to help tackle the root causes together with all relevant stakeholders.”

Click here to see Nestlé’s Labor Rights Action Plan for Palm Oil.

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