PepsiCo insisted it has “engaged” with Indofood over allegations the US group’s Indonesian partner breaches workers rights through practices including the use of child labour on its palm oil plantations.

A recent report from the Rainforest Action Network, Indonesian labour rights advocates OPPUK and International Labor Rights Forum (ILRF) highlighted various abuses following field investigations and worker interviews completed on two palm oil plantations owned and operated by Indofood subsidiary IndoAgri. Documented practises included the use of child labour, worker exposure to “highly hazardous” pesticides, payment below the minimum wage, long-term reliance on temporary workers to fill core jobs and the use of company-backed unions to “deter” independent labour union activity. 

“Simply put, this report reveals that Indofood is violating the fundamental rights of workers on its palm oil plantations, as PepsiCo watches on. Both companies must act without delay to address the egregious worker exploitation exposed on Indofood’s plantations,” urged Robin Averbeck, senior campaigner at the Rainforest Action Network. 

Indofood, the largest food maker in Indonesia, manufactures snacks in the market under PepsiCo’s brands as part of a joint venture agreement between the two companies. While PepsiCo issued an initiative on palm oil in September, committing to sourcing sustainable palm oil, the joint venture with Indofood is not included in the plan. 

A spokesperson for PepsiCo moved to distance the Frito-Lay manufacturer from the alleged violations. “Through the snack food joint venture, we have a relationship with Indofood, an independent company. You’ll note the report is focused on IndoAgri, a completely separate agriculture division of Indofood. PepsiCo operations do not directly source palm oil from IndoAgri,” the spokesperson stressed. 

However, the spokesperson added PepsiCo takes “any alleged violation of labour and human rights policies seriously” and insisted that the company has “a track record of acting on such matters to ensure they are appropriately resolved”.  

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The spokesperson continued: “When we were made aware of this issue we immediately engaged with our snack food joint venture partner Indofood, including a letter from PepsiCo’s chairman and CEO to the Indofood CEO.  The letter acknowledged the gravity of the allegations and confidence that Indofood is taking them as seriously as PepsiCo does. “Based on the last information we have from Indofood, they have engaged with RAN but due to a lack of detailed info and data supporting the allegations, Indofood expressed concern in their ability to fully investigate the matter. The full report has now been provided so we will continue to engage Indofood to address any outstanding issues.”

Indofood did not respond to requests for comment on the labour policies allegedly employed on its palm oil plantations.