May 17, 2010 / 12:24 PM / in 10 years

Factbox: Nestle, "eco-friendly" palm oil and Kit Kat

KUALA LUMPUR (Reuters) - Swiss-based Nestle, the world’s biggest food group, will work with a non-profit organization to probe the firm’s palm oil suppliers for evidence of rainforest and wildlife destruction.

The move is in response to growing scrutiny by green groups over palm oil which is widely used in the food and fuel sectors.

Nestle said in a statement on Monday that The Forest Trust, a charity that looks to halt illegal logging by tracing consumer products to their source, has already helped the maker of Kit Kat bars formulate guidelines for palm oil purchases.

These involve commitments to preserve carbon-rich peatlands in Indonesia and Malaysia, where much of palm oil plantation expansion takes place, as well as support local and indigenous communities.

The food giant also plans to provide technical support for palm oil suppliers that are willing to adhere to its palm eco-standards.

Here are some facts about Nestle; its place in the palm oil industry and mounting pressure from green groups:

* Greenpeace first targeted Nestle in a social media campaign in March of this year when it aired a commercial on YouTube showing a bored office worker chomping on a Kit Kat candy bar only to find the bloodied finger of an orangutan.

* Orangutans are an endangered species of primates whose habitats in Asia often get cleared to make way for oil palm estates. Palm oil is a key ingredient used in manufacturing Kit Kat bars.

* Nestle tried to shut down the commercial, citing a copyright claim on Kit Kat. Greenpeace re-posted the clip on another site and used Twitter and Facebook to highlight Nestle’s move, drawing in thousands of pledges to boycott the firm.

* Within hours, Nestle announced that it had stopped buying palm oil from Indonesia’s Sinar Mas — a planter that Greenpeace says has openly destroyed rainforests to expand.

* Nestle also said it has pressured U.S. agribusiness giant Cargill and other blended palm oil suppliers to avoid buying palm oil related to rainforest destruction or risk getting delisted as a supplier.

* Indonesian oil palm farmers on the other hand have criticized Nestle for blacklisting Sinar Mar, with many saying they were ready to boycott Nestle products sold in the Southeast Asian country, local media has reported.

* Nestle annually buys 320,000 tonnes of palm oil — roughly 0.7 percent of global production. It plans to source all of its palm oil needs from environmentally friendly sources by 2015.

* Currently 18 percent of its palm oil purchases are “green” and this is expected to hit 50 percent by the end of 2011.

(Source:Nestle statements, Reuters, news reports)

Reporting by Niluksi Koswanage; Editing by Ed Lane

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