Palm oil has many benefits, which is why it’s in high demand. Palm oil is the number one produced edible oil in the world; its popularity is largely due to it not containing trans fats. With the growth in demand for palm oil, current sourcing practices are not sustainable.
The Hershey Company joined the Roundtable on Sustainable Palm Oil (RSPO) in 2011 and by the end of 2014, all of our palm oil purchases were 100 percent Mass Balance RSPO-certified palm oil. We remain committed to purchasing 100% RSPO certified mass balance palm oil.
Over the past several years, we have been focused on achieving the highest standard in palm oil sustainable sourcing.
Our work with TFT has enabled us to trace our palm oil and palm kernel oil to 99.25% of the mills in our supply chain for our purchases in the first half of 2017 against our goal of 100%. Tracing to a mill location provided information about where palm oil was harvested and can indicate whether it came from an area where there are social or environmental risks. It also enables us to have constructive conversations with our suppliers about environmental and social concerns and how these can be remediated and properly addressed.
For our first half 2017 fourth quarter purchases, we traced our palm oil more than to 1,540 mills located in Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Indonesia, Malaysia, Mexico, Nicaragua, Peru and Thailand. We sourced the oil from seven suppliers: AAK, Cargill, Fuji Oil, Gemini, IOI Loders Croklaan, Jing Yi and Wilmar.
Looking beyond the mill, through the first half of 2017, we have achieved approximately 14% traceability to the plantation level. In the process, we’ve learned a great deal about this supply chain and the challenges inherent to tracing the oils back to the plantations that produce it. We remain deeply committed to pushing all stakeholders to accelerate traceability and bring full transparency to this supply chain, however along with our supplier partners we realized it would take more time to achieve this goal than originally anticipated. We are resetting our goal to achieve full supply chain traceability to the plantation level to 2020.
We will continue to provide annual updates on our palm oil tracing efforts through our Corporate Social Responsibility Report to give stakeholders visibility into our ongoing progress.
We expect all of our palm oil sourcing partners to uphold our rigorous Responsible Palm Oil Sourcing Policy.
Last year, we supported IOI Corporation’s decision not to divest its interest in IOI Pelita Plantation Sdn Bhd and to remain committed to resolving the land rights dispute. We fully expect IOI Group to meet its commitments in the IOI-Pelita case and expect to see regular progress updates.
We were concerned to learn about reports of ongoing violations of workers’ rights on Indofood Agri Resources’ plantations. While we do not directly source palm oil from Indofood Agri Resources, we have instructed our direct sourcing partners to remove Indofood’s oil from our supply chain until further notice. Should Indofood’s situation change, we will re-evaluate this position.