Nestlé dumps Cargill’s Brazilian soy but persists with its palm oil, cocoa supplies

Friday, January 17th, 2020

Decision of food giant to stop sourcing Brazilian soy from Cargill welcomed but a failure to act on other suspect commodity supply chains raises yet more questions.

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Nestlé’s decision to stop sourcing Brazilian soy from Cargill was seen as a positive step in its fight against deforestation. Yet, questions remain as the food giant continues to rely on Cargill for hundreds of its palm oil and cocoa suppliers around the world.

In the December announcement Nestlé said they stopped purchasing from Cargill in Brazil in May due to “its inability to deliver traceable soy”.

Cargill has a significant soy presence in the Cerrado, a Brazilian savannah biome that has been heavily deforested for soy cultivation. It is estimated that nearly half of the Cerrado’s natural vegetation – about 88 million hectares – has been destroyed.

There are 2.6 million hectares of unregistered soy farms in Brazil, representing 12% of the total, according to an October Trase briefing by the NGO Global Canopy, which also named Cargill as among the firms most exposed to illegal operations.

The firm said in June that it and the industry would fail to meet its 2020 zero deforestation pledge and followed this up with a defiant rejection of the mooted ‘Soy Moratorium’ planned for the Cerrado.

The commodities monolith has faced years of criticism over the environmental impact its soy, palm oil and other commodities’ sourcing policies have had on land and communities in South-East Asia, Latin America and North America.

Although Nestlé has called time on its relationship with Cargill for Brazilian soy, the food conglomerate maintains a significant buying relationship with the firm in Indonesia for palm oil and in West Africa for cocoa, among other areas.

The US NGO Mighty Earth delivered a scathing assessment in June that laid bare the company’s chequered history and alleged abuses in a report titled Cargill: The Worst Company in the World.

From colluding with security forces to evict locals from palm oil concessions in Indonesia to enabling the use of child labour on cocoa farms in West Africa, the allegations against Cargill are numerous.

The latest data on Nestlé’s website states that “54% of our total palm oil purchased in 2018 was traceable”. Its most recent supplier list for the commodity, published in August 2019, lists Cargill as the supplier from dozens of palm mills in Indonesia, Malaysia, Thailand and Brazil.

A 2019 Greenpeace briefing published in the wake of widespread fires in Indonesia, many of which were started illegally to allow for commodity cultivation, names Cargill as being exposed to more than 8,000 fire hotspots in the country covering 161,300ha.

Meanwhile, 17 of Nestlé’s 54 tier 2 cocoa suppliers in Cote d’Ivoire are sourced via Cargill, according to its supplier list from March 2019.

It is estimated that two million children work in exploitative and hazardous conditions in cocoa fields in Ivory Coast and neighbouring Ghana. A Washington Post exposé in June revealed ongoing child labour and trafficking abuses in the sector.

Nestlé, along with Mars and Hershey, agreed in 2001 to eradicate child labour from its cocoa supply chains but that and several other voluntary pledges to adequately monitor its suppliers and traceability have failed to deliver on their promises.

In response to questions whether they would stop sourcing palm oil and cocoa from Cargill and if the firm is able to fully trace its other Cargill supply chains, a Nestlé spokesperson told Earthsight: “We stopped sourcing soya from Cargill in May 2019 because of recent changes in their policy regarding deforestation in Brazil.

“Our Responsible Sourcing Standard applies to all our suppliers. We work together with our suppliers to map our supply chains, assess performance against our standard and develop time-bound action plans to address any gaps found.

“We drive our responsible sourcing operations with the objective of continuously improving the sustainability practices of our suppliers, all the way up to the farm level. Our preferred way of working is to partner on transformation. However, we take decisive action in the event that a supplier does not comply with effectively managing identified risks or meeting agreed deadlines for action plans.”