Supply Chain
Companies Continue Progress in Erasing Deforestation, Human Rights Abuses from Supply Chains

A wave of efforts to increase transparency and ethics in complex global supply chains in recent years has not only unearthed grave ongoing issues, but a groundswell of private sector commitments to address them. Two that have risen to the forefront of concern for multinationals are deforestation and human rights abuses.

Greenpeace reported today that industry giants Mars and Nestlé have announced that they will take steps to ensure their pet food supply chains are free of human rights abuses and illegally caught seafood. Their commitments to enact standards on transshipping at sea increase the need for global seafood giant Thai Union Group, one of the world’s largest and likely most contentious seafood companies and a supplier for both companies, to eliminate any outstanding risks of human rights abuses and illegal, unreported and unregulated fishing in its own supply chains.

Nestlé has committed to a full ban on transshipment at sea in its supply chains, while Mars has committed to suspend the use of transshipped products in its supply chains if its seafood suppliers cannot adequately address the human rights and illegal fishing issues associated with the practice in the coming weeks.

“Pet owners and activists have demanded that companies eliminate human rights abuses from their pet food supply chains. This move toward stopping out of control transshipment at sea means we’re finally seeing results,” said Greenpeace USA Oceans Campaigner Graham Forbes. “These are the two largest pet food companies in the world, and their commitments to address transshipping at sea will put significant pressure on suppliers like Thai Union to show the leadership needed to clean up their own seafood supply chains. We’ll be closely monitoring Mars’ and Nestlé’s progress to ensure these policies lead to real changes on the water.”

In 2016, Greenpeace launched a campaign, Cats vs Bad Tuna, to demand that Mars ensure its supply chains were free of any potential human rights abuses (watch the new victory video here). A Greenpeace Southeast Asia report, Turn the Tide, demonstrated the unacceptably high risk of tainted seafood entering numerous supply chains throughout 2016, including Nestlé’s and Thai Union’s. Nestlé immediately committed to address the concerns raised in the report, and this month Mars committed to tackle unchecked transshipment at sea in its pet food supply chains.

“Over the past several years, Nestlé and Greenpeace have worked together to strengthen Nestlé’s policies governing the procurement and responsible sourcing of seafood,” said Jack Scott, Nestlé Purina PetCare Head of Sustainability. “In light of Greenpeace’s research findings, Nestlé has committed to a ban on all transshipments at sea."

Transshipment is a process through which companies move fish from one vessel to another, enabling them to remain at sea for extended periods of time to plunder the oceans, dodge regulations, and keep fishers as a captive workforce (see this recent Oceana report for more on transshipment). In addition to its connections to human rights abuse, transshipment at sea provides an opportunity for illegal fishing vessels to unload their illegally caught loads into supply chains, away from port authorities. In 2015, an estimated 40 percent of these transfers happened on the high seas, outside of the jurisdiction of national authorities. Transshipment at sea has also been linked to other organized crime, including drug, weapon and wildlife trafficking.

"Mars recognises the risks of transshipment at sea. We want to see human rights respected and the environment protected in our seafood supply chains" said Isabelle Aelvoet, Global Sustainability Director at Mars Petcare. "The current problems associated with transshipment are serious and demand urgent attention. We are committed to working with our suppliers to remedy these problems, but if we cannot resolve these issues to our satisfaction quickly, we will seek to end the use of transshipped products in our supply chains until these serious problems are fixed."

Today’s news follows a new report from Global Fishing Watch highlighting the problems with transshipment at sea. The report found that from 2012-2016, refrigerated cargo vessels participated in more than 5,000 likely transshipments. Concerns were raised about Thai Union’s supply chains in a 2015 New York Times investigation into human rights abuses at sea.

Mars’ and Nestlé’s commitments send a strong message to Thai Union to address transshipment in its supply chains. Greenpeace is currently pressuring Thai Union to make sweeping changes for workers and oceans across its seafood supply chains. Greenpeace has campaigned against Thai Union since 2015, and is asking the company to lead the seafood industry by ending transshipment at sea, addressing overfishing and destructive fishing and increasing traceability from sea to plate.

In December, Thai Union announced an ambitious strategy to ensure 100 percent of its branded tuna is sustainably sourced, with a commitment of achieving a minimum of 75 percent by 2020. As part of the new strategy, Thai Union says it will invest $90m in initiatives that will increase the supply of sustainable tuna; Thai Union defines sustainably sourced tuna as tuna from fisheries that are either already certified according to the standards of the Marine Stewardship Council (MSC) or are involved in a FIP that is working towards achieving standards required for MSC certification.

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Meanwhile, the latest annual report from Forest Trends’ Supply Change initiative looks at 447 companies that have made 760 commitments to curb forest destruction in supply chains linked to the “big four” agricultural commodities – palm, soy, timber & pulp, and cattle – which end up in products found in virtually all consumer goods – from hamburgers to t-shirts – and together are responsible for over a third of tropical deforestation.

“Corporate commitments to deforestation-free supply chains continue to gain momentum as stakeholders demand more sustainable businesses and products. As companies move to address these demands – and the ever-growing threats to their supply chains, including climate change – we're learning that meeting these goals is easier said than done,” said Stephen Donofrio, Senior Advisor for Supply Change. “It requires a reformulation of an entire complex system – from suppliers to retailers, among many other non-corporate actors.”

“There is a pressing need for transparent information about these commitments, and for companies to publicly disclose progress toward meeting them. Doing so ensures that these goals don’t fall into neglect, especially as many deforestation commitments approach their target deadlines,” Donofrio added.

In December, CDP reported that with an average of 24 percent of global companies’ revenues dependent upon the “big four” commodities, as much as $906 billion in annual turnover could be at risk, revealing just how vulnerable companies are to deforestation risks. While the 2016 results from the Global Canopy Programme’s (GCP’s) ‘Forest 500’ revealed that zero-deforestation targets for 2020 and 2030 are unlikely to be met at the current rate of progress, in January at the World Economic Forum in Davos, 20 of the world’s largest commodity producers, traders, manufacturers, consultants and retailers launched a partnership with research institutions and banks, aimed at building a global decision-support tool to increase transparency and traceability across supply chains.

Fortunately, the Supply Change report indicates that transparency around these commitments is beginning to pick up steam. Progress information is publicly available for just over half of commitments (51 percent) tracked by Supply Change over a two-year time frame – a dramatic increase from 2016 (36 percent).

Other findings of the report include:

• Commitments on palm and timber & pulp continue to lead the way, thanks in large part to more well-established certification programs and scrutiny around palm oil-driven deforestation. Commitment rates remain considerably lower for soy and cattle, which is troubling given their outsized contribution to tropical forest loss.
• Progress reporting on commitments is on the rise: Among a “control group” of 347 companies whose commitments Supply Change has tracked for over a year, 57 percent more of their pledges are accompanied by transparent reporting in 2017 than in 2016.
• Business structure and size plays a role: In terms of making commitments, smaller, private companies continue to lag behind their larger, publicly traded peers.
• Commitment rates vary across the length of a supply chain: Retailers had the lowest rate of deforestation commitments – 54 percent – compared to their upstream peers (producers, 71 percent; processors, 72 percent; traders, 70 percent; manufacturers, 66 percent).
• Commitments that aren’t accompanied by progress reporting run the risk of becoming “dormant”: Supply Change found that one in five commitments has a target date that is past due – or never had a target date at all – and has never had progress information available. A third of the 447 companies with commitments have at least one commitment that is dormant.
• Collective action spurs individual action: in its first-ever analysis of commitments made by members of coalitions and group initiatives that collectively act on deforestation, Supply Change found that at least 95 percent of participants in groups such as the High Carbon Stock Steering Group, Tropical Forest Alliance 2020, and Tropical Forest Trust have adopted pledges – as have 98 percent of signatories to the New York Declaration on Forests.
• Companies are increasingly incorporating policies that address on-the-ground impacts into their deforestation commitments: Supply Change, for the first time, analyzed commitments for 10 such policies and found 37 percent of tracked commitments now explicitly prioritize biodiversity and wildlife protection. Other popular additions include reducing greenhouse gas emissions (35 percent) and improving water management (29 percent).

"With the possibility looming that certain governments will step back, private sector leadership on ending deforestation and fighting climate change becomes even more important,” said Forest Trends Founding President and CEO Michael Jenkins. “This third Supply Change report signals that we are committed to partnering to help build the tools and experience necessary to ensure these businesses can reach their goals, and to ensure that society makes critical progress on combating climate change."