Organizational Change
With Heinz-Kraft Merger, RAN Calls on Food Giant to Step Up Efforts for Sustainable Palm Oil

Last month’s announcement that Heinz will acquire Kraft Foods opens a bevy of questions for a company that as a combined force will have annual sales of at least US$28 billion. At a time when consumer food tastes are changing, especially amongst millennials, some will question the viability of a company that relies on sales of ketchup and mac and cheese. But this massive company’s reach also brings up questions about its environmental and human rights impacts — particularly when it comes to palm oil.

Palm oil has become one of the most important and contentious raw components of the food industry’s global supply chain. Walk into just about any supermarket around the world, and chances are half of the foods within that store’s aisles contain palm oil. As more consumers became concerned over hydrogenated oils’ health effects, palm oil proved a viable alternative. Its composition allows crispy snacks to stay crisp and soft foods such as cookies to remain moist. The surge in demand for palm oil, however, has led to land rights violations and environmental destruction, especially in Malaysia and Indonesia, where 85 percent of the world’s palm oil is sourced. To that end, the Rainforest Action Network (RAN) has called out both Heinz and Kraft as lagging in their commitments to the sourcing of sustainably and reliably sourced palm oil.

In the past few years, more and more global food companies, as well as their suppliers, have adopted new standards and tools to help ensure sustainable sourcing of the ubiquitous oil, but both Heinz and Kraft have remained silent when approached about the issue.

“So now that the merger has occurred, we have two of the worst-performing companies when it comes to palm oil merged into one,” Gemma Tillack, Agribusiness Campaign Director for RAN, said in a recent interview, “so we’re calling on this new merged company to develop a more robust policy so that they are not at risk of sourcing conflict palm oil.”

Indeed, environmental activists have uncovered the array of environmental impacts of converting lush rainforests into monocrop palm oil plantations. Nevertheless, documented labor and human rights violations will likely give pause to the growing contingent of conscientious consumers. According to Tillack, both Heinz and Kraft were amenable to meeting with RAN representatives in the past, but neither company has responded to the non-profit’s recent outreach — for example, when RAN approached Kraft about documented cases of land grabbing in New Guinea involving KLK, one of the world’s largest palm oil manufacturers.

And the two are amongst what RAN calls the “Snack Food 20” group of companies that have the power to elevate the standards for palm oil production worldwide. Tillack acknowledges that Heinz has a palm oil policy, albeit a vague one; Kraft, however, does not acknowledge the problem at all.

“We want both Heinz and Kraft to go beyond the RSPO standards,” Tillack said, “but these companies are sitting at the back of the pack, and they are not doing anything to address these issues.”

RAN has released many guides to advise companies on ascertaining which suppliers are adhering to the RSPO’s globally recognized standards. One of the reports, covering free and fair labor within the palm oil industry, offers a set of principles it suggests companies adopt to avoid the problems plaguing the industry. Overuse of highly toxic chemicals; unethical labor recruitment, including child slavery; long working hours in harsh conditions; daily quotas for palm kernel picking that are almost impossible to reach; low wages and substandard living and working conditions; and poor, if any, access to benefits such as health care, children’s education and safe drinking water are among the many injustices that have persisted because of the palm oil industry.

The denial of basic human rights and dignity is directly tied to environmental destruction, including the elimination of orangutan habitat, soil erosion, water contamination and increased greenhouse gas emissions due to the destruction of carbon sinks such as peatlands. Therefore, Tillack insists, companies such as the Heinz-Kraft behemoth have a huge opportunity to transform the palm oil industry into a more responsible and ethical one.

“We want these companies to use their leverage to drive change throughout the supply chain,” Tillack says, “and we want to work with them to protect both people and forests, and ensure both human rights and the integrity of these forests.

“Yes, there is good news happening on the ground, but the scale of destruction is still so bad we need to turn this industry on its head in order to drive change,” she continued. “We want to send a message that if you want to buy palm oil on the global market, we want it made clear that you cannot cause environmental destruction and that you will not violate human rights.”

Tillack insists that palm oil can be produced without wreaking havoc on both people and the planet. And while there is a small but growing number of companies that have stopped using palm oil altogether, Tillack says RAN and other advocacy groups realize the ingredient will not disappear. As such, companies such as Heinz and Kraft can make a huge difference — and rebuild trust in their brands — if they change their current practices and embrace the benefits of sourcing more sustainable palm oil. A strong palm oil policy allows companies to pressure suppliers, which in turn will pressure growers to cultivate the crop more responsibly. Such a shift would do more to enhance the new Heinz-Kraft company’s reputation — and in the end, be more cost-effective than a marketing campaign touting foods that more people will refuse to eat once they understand the effects those purchases have on land and people.