New report finds Indofood linked to deforestation, climate pollution and human rights abuses in Indonesia

"Bad actor" Indofood lags behind peers in palm oil sector, and exposes major customers and investors, including PepsiCo and Norway's Government Pension Fund Global, to egregious company practices.

Palm oil production is the main driver of deforestation in Indonesia.



A joint report released today by Rainforest Action Network and Rainforest Foundation Norway, titled “Palm Oil Sustainability Assessment of Indofood Agri Resources,” presents assessment findings of Indofood’s policies and practices against the higher responsible palm oil production standards set by its competitors and customers.

Research, satellite analysis, field investigations and interviews with civil society groups identified a number of cases that demonstrate “business as usual” practices for Indofood means clearing and burning rainforests and long-standing cases of social conflict and human rights violations.

Indofood is lagging behind its peers and is now the largest private palm oil company in Indonesia that has not strengthened its policies or improved its practices to align with the new benchmark for responsible palm oil. The largest food manufacturer in Indonesia, Indofood is the sole maker of PepsiCo branded products in the country, and continues to expose PepsiCo and its other major customers and investors to significant conflict and malpractice.

Nils Hermann Ranum, who heads Rainforest Foundation Norway’s policy and campaign work, explains that investors are increasingly looking for companies to act responsibly. “One of the world’s largest investors, Norway’s Government Pension Fund Global, has shares in a parent company of Indofood, and has recently excluded similar companies from its investments portfolio due to violations of the Pension Fund’s ethical guidelines.

“The Norwegian Pension Fund should look into the activities of Indofood and similar companies, and consider exclusion or divestment from Indofood’s parent company if the policies and practices of the company are not improved significantly. If a major investor like the Norwegian Pension Fund divests, this will be a huge blow both for Indofood and its reputation,” Ranum said.

PepsiCo’s latest palm oil policy released earlier this week specifically excludes Indofood from the requirements, allowing the company to bypass the stricter environmental and social standards and all but ensuring that deforestation and human and labor rights will continue to taint the snack food giant’s supply chain. As a result of this inadequate policy, consumers around the world are ramping up pressure on PepsiCo through a new campaign tactic launched today–– activists will be posting “Out of Order” signs on PepsiCo owned or operated vending and soda machines to send a message about the ongoing risks of Conflict Palm Oil in PepsiCo’s supply chain.

Gemma Tillack, Rainforest Action Network’s Agribusiness Campaign Director, said,

“PepsiCo’s latest commitment is a missed opportunity and a half step when what is urgently needed is bold action. Any serious responsible palm oil commitment must include Indonesia, the world’s largest palm oil producer and the country most greatly impacted by rainforest destruction and human rights abuses caused by palm oil plantation expansion. In light of the egregious actions of Indofood, as found in the recent report, PepsiCo must do better.”

Download a summary of the report, titled Indofood: PepsiCo’s Indonesian Palm Oil Problem, here.

Download the full report by AidEnvironment Palm Oil Sustainability Assessment of Indofood Agri Resources, here.