U.S. soda and food maker PepsiCo Inc (PEP.O) and Dutch dairy producer FrieslandCampina N.V. have asked their suppliers to cease buying palm oil from plantation owner Astra Agro Lestari (AALI.JK), accused by environmental groups of land and human- rights abuses.
Corporate supply chains are under scrutiny as regulators and investors increasingly consider environmental and social impacts, and as consumers worry about climate change and biodiversity loss.
Environmental groups last year found that Jakarta-based palm oil producer Astra Agro Lestari (AAL) did not obtain consent from local communities before claiming land, improperly disposed of waste and cleared areas leading to flooding in Indonesia.
The findings spurred some major consumer products and packaged food manufacturers, which widely use palm oil, to cut ties with the agricultural company.
AAL late last year said it would appoint “an independent third party to review the allegations and any other issues that may arise in relation to them,” and will publish the findings of the review, following the NGO’s report.