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Nestle to stop sourcing from Indonesian palm oil producer AAL
Published by Jessica Weisman-Pitts
Posted on September 30, 2022
2 min readLast updated: February 4, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on September 30, 2022
2 min readLast updated: February 4, 2026
By Maytaal Angel and Bernadette Christina
LONDON/JAKARTA (Reuters) – Food giant Nestle plans to stop sourcing from subsidiaries of Astra Agro Lestari (AAL), a major Indonesian palm oil producer accused by environmental groups of land and human rights abuses.
The move comes as multinationals face increased reputational and legal pressure from consumers and governments to clean up their global supply chains in the fight against climate change.
Nestle, maker of KitKat chocolate and Nespresso coffee, told Reuters that following a recent independent assessment, it instructed its suppliers to ensure palm oil from three subsidiaries of AAL no longer enters its supply chain.
It did not specify the claims again AAL other than to say it had been on its ‘grievance’ list for several months.
The Swiss-based group expects it will not be using any palm oil from the AAL subsidiaries by the end of the year.
AAL denied the accusations made against it.
“Astra Agro is very serious about implementing our sustainability policy. It is not true that Astra Agro or its subsidiaries carry out land grabbing,” Mr. Santosa, president director of AAL, told Reuters.
The European Commission has proposed several laws aimed at preventing and, in the case of forced labour, banning the import and use of products linked to environmental and human rights abuses.
Friends of the Earth said Nestle’s move to stop sourcing from AAL is an important “first step” and renewed its call on consumer majors such as Procter & Gamble, Hershey’s <HSY.N >, Kellogg’s <K.N >, Unilever and PepsiCo to follow suit.
“Nestle and other consumer giants now have a monumental opportunity to ensure grievances are redressed, conflicts are resolved, and justice is delivered to communities,” the environmental group said in a statement.
(Reporting by Maytaal Angel. Additional reporting by Bernadette Christina)
Sustainability refers to the ability to meet present needs without compromising the ability of future generations to meet their own needs, often focusing on environmental, social, and economic dimensions.
Human rights abuses are violations of the basic rights and freedoms to which all humans are entitled, including issues like discrimination, exploitation, and denial of basic needs.
Corporate social responsibility (CSR) is a business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders.
A supply chain is the entire system of production, processing, and distribution of goods, from raw materials to the final consumer, including all the organizations involved.
Environmental issues are problems that affect the natural environment, including pollution, climate change, deforestation, and loss of biodiversity.
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