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Article

24 Jan 2018

Author:
Beh Lih Yi, Thomson Reuters Foundation

Indonesia: PepsiCo suspends procurement contract with Indofood due to allegations of labour abuse

"PepsiCo cuts ties with palm oil supplier over labour abuse claims," 24 January 2018

...PepsiCo has suspended procurement from a palm oil supplier over claims of labour abuses on its Indonesian plantations...

A 2016 probe by several campaign groups alleged there were child labour and worker exploitations, such as low wages and hazardous working conditions, on Indonesian plantations operated by Singapore-listed Indofood Agri Resources (IndoAgri).

Although IndoAgri has taken action to address the complaints, PepsiCo said it decided to suspend ties "pending further progress and visibility around the issues" after it looked into the allegations.

IndoAgri is a subsidiary of Indonesian food manufacturer Indofood, which produces PepsiCo's snacks in Indonesia under a joint venture partnership. The joint venture sourced palm oil from IndoAgri.

The investigation was carried out by San Francisco-based Rainforest Action Network (RAN), Indonesian labor rights group OPPUK and Washington-based International Labor Rights Forum.