Consumer goods giant accused of failing to file progress reports and not paying membership fees, but Nestle insists it is pursuing a responsible sourcing strategy
Food giant Nestle may be committed to responsibly sourcing 100 per cent of its palm oil by 2020, but that has not stopped the company being suspended from the influential Roundtable on Sustainable Palm Oil (RSPO) this week.
The industry body, which requires member companies to adhere to a range of environmental and social criteria in order to secure RSPO certification, announced yesterday that Nestle had been suspended from the group with immediate effect after missing deadlines to file progress reports and pay its membership fees.
However, in a statement Nestle suggested that while it hoped to return to the group the suspension was in part the result of a "fundamental differences in the theory of change that Nestlé and RSPO are employing to realise the ambition of a wholly sustainable palm oil industry".
RSPO said the company had breached its statutes and code of conduct after failing to submit a compulsory Annual Communication on Progress (ACOP) report for 2017. ACOP reports are meant to "specify steps taken last year, specific steps intended for the coming year and for the long term in the form of a time-bound plan of working towards producing or buying certified sustainable palm oil", RSPO said.
"Nestle was given the opportunity to complete its ACOP report for 2017 through active engagement, and has declined to submit a time-bound plan," it added.
The group also revealed the multinational unpaid overdue membership fee of €2,000, which amounts to a further breach of RSPO Statutes.
As a result of the suspension Nestle will lose voting rights in RSPO meetings, will no longer be able to take part in RSPO working groups or task forces, and will have RSPO certification suspended from those Nestle facilities that are RSPO Supply Chain certified.
The company now has 30 days to communicate its suspension to its customers. "After this 30 day period, Nestle certificates will automatically cease to be valid and trading of CSPO will no longer be available via PalmTrace," RSPO said.
"We hereby request that Nestlé fully comply and commit to the RSPO Statutes and Code of Conduct for Members 2017 by 20 July 2018," it added. "The suspension will only be lifted and certification reinstated once RSPO is satisfied that this has been fulfilled. Failure to comply will result in membership with the RSPO being terminated."
In a detailed statement responding to the decision, Nestle's global head of responsible sourcing Benjamin Ware said the company would continue to work with RSPO over the next 30 days in a bid to see how it can better contribute to the group and "hopefully re-qualify".
But he also stressed that the company regarded RSPO certification as just "one tool" for achieving its ambition to deliver 100 per cent 'responsibly sourced' palm oil by 2020, noting that "it is not the only tool".
He added that while Nestle respected the board's decision to suspend the company there were "fundamental differences in the theory of change that Nestlé and RSPO are employing to realise the ambition of a wholly sustainable palm oil industry".
"We believe in achieving traceability to plantations and transforming supply chain practices through interventionist activities instead of solely relying on audits or certificates," he explained. "We also believe that in order to achieve genuine industry change, we need to embed the true cost of sustainable production into supply chain procurement practices, rather than focusing on premium mechanisms only."
Ware added that Nestle was now able to trace half of the palm oil it buys back to plantations and 92 per cent back to specialist mills, while 52 per cent meets its criteria for being 'responsible sourced' and 63 per cent is 'deforestation free'.
He argued that the company's 'Responsibly Sourced performance' goes beyond RSPO current requirements and stressed that Nestle had tried to submit an ACOP report but had been told it failed to meet the necessary criteria.
"We have time-bound plans in place for Responsibly Sourced palm oil, against which we annually report on progress and provide third party assurance on," he explained. "Notification of these plans and relevant online links were submitted to RSPO as part of the ACOP 2017 submission process. However, as Nestle's goal is not to achieve 100 per cent RSPO certification of palm oil, we were asked by RSPO to remove our response and re-submit that we have 'No Action Plan'.
"Whilst we respect the decision of RSPO to consider only action plans focused on moving towards 100 per cent certification, we believe that this approach is not conducive to achieving the levels of industry transparency and transformation the sector so urgently needs. We will continue to provide full transparency to our clients and consumers with progress against our commitments."
He added that this transparent approach was delivering results and that earlier this month Nestle published a list of 10 companies that will be removed from its supply chain for not making enough progress towards its 'Responsible Sourcing Provisions'.
Supply chain certification schemes have always been dogged by complicated arguments over which criteria should be used and whether it is more credible for a company to embrace industry wide standards or try and develop its own approach. It will be fascinating to see if Nestle does return to the RSPO fold, not to mention whether it even wants to, or whether those "fundamental differences" prove too large to overcome.
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