Cargill suspends business with Guatemalan palm oil supplier

15-Jan-2018 - Last updated on 15-Jan-2018 at 18:22 GMT

Agri-giant Cargill has announced it has suspended sourcing palm oil from Reforestadora de Palmas del Petén, S.A (REPSA) after the Guatemalan supplier failed to meet Cargill’s sustainable palm oil policy.

In an announcement on Cargill’s public grievance log dated November 24, 2017, Cargill stated: “In August 2017, Cargill called on REPSA to meet four critical milestones in response to environmental and social grievances raised by a coalition of international and Guatemalan NGOs. REPSA had to demonstrate meaningful progress in order to continue its sourcing relationship with Cargill. The deadline for REPSA to meet the milestones was October 31, 2017.

“Although REPSA made encouraging progress with the parties that raised these grievances and was actively seeking to foster trust with local communities and activists, it fell short on several key expectations.

“As a result, Cargill is suspending business with REPSA. We will not enter into any new purchase contracts until REPSA can meet the requirements of our sustainable palm oil policy.”

NGOs welcome the response

The announcement was welcomed by a number of non-governmental organizations (NGOs), including Friends of the Earth, the Rainforest Action Network, ActionAid USA, and CONGCOOP, a Guatemalan civil society network.

“Cargill’s withdrawal sends an important signal to the palm oil industry, and sets an important precedent for environmental and social accountability. However, it brings with it real concern for ongoing repression,” said Jeff Conant, Senior International Forests Program Director for Friends of the Earth. “Unfortunately, land defenders continue to be under threat, and companies that have profited from activities in the region have a responsibility to prevent these threats.”

Gemma Tillack, Forest Policy Director with Rainforest Action Network (RAN), added: “Cargill, Wilmar and other companies operating in the region, and the RSPO certification body of which REPSA is a member, must do everything in their power to ensure the safety and security of land and human rights defenders––and to ensure that their rights to land, life, and liberty are fully respected.”

“Cargill’s actions finally recognize the serious flaws in REPSA’s production processes. Big projects like these need the consent of local communities before they are setup and during operations,” added Doug Hertzler, Senior Policy Analyst, ActionAid USA.

Reassessing the business relationship

Cargill added that it will reassess its business relationship with RESPA if the supplier can show it is committed to meeting the company’s sustainability milestones.

“Cargill affirms our commitment to uphold the principles of our Statement on Human Rights across our supply chain and we hold our suppliers accountable to respect and protect people and human rights. We also expect all our suppliers to act in good faith while engaged in our grievance procedure,” stated Cargill in a December 20, 2017 post on its public grievance log.

“We will not tolerate any form of retaliation towards internal or external stakeholders such as employees, local communities and activists, including retaliation resulting from decisions undertaken by Cargill through our grievance procedure. Actions of such nature will lead to the termination of business relationship.”