Engaging our palm oil suppliers
Working with our suppliers plays a vital role in achieving our target of making sustainable palm oil commonplace.
Suppliers hold the key to sustainable palm oil
The suppliers we buy our palm oil from are at the heart of our ambition to make sustainable palm oil commonplace. By working closely with them to drive improved standards, we have progressed more than halfway to our target of 100% physically certified palm oil and its derivatives for our core volumes by the end of 2019 – and they will play a central part in our future progress.
This work is underpinned by our Sustainable Palm Oil Sourcing Policy (PDF | 167KB), which describes our commitment to respecting human rights, adhering to national laws, becoming more inclusive of smallholder farmers and increasing the traceability of our supply chain. We require all our suppliers to comply with our Five Principles for Sustainable Palm Oil throughout their operations, including traders and their third parties.
Within this framework, we know that our suppliers are at different stages of progress towards sustainability. That means working with them in different ways so that, together, we can have the most impact. In practice, that results in a combination of approaches: proactive engagement aimed at improving standards, and responding to challenges brought to our attention.
We believe transparency plays an important role – and we have published a full list of our direct suppliers on our website. For more details of our work in this area, see Improving the visibility of our supply chain.
Industry-first partnership with direct suppliers to support smallholders & 'NDPE'
Our suppliers can help us get closer to the people who grow our palm oil – which in turn helps us ensure it comes from sustainable sources.
In January 2018, for example, we signed a Memorandum of Understanding (MoU) with the Indonesian government-owned palm oil plantation company PT Perkebunan Nusantara (PTPN). It sets out how we will work together to support local mills and smallholder farmers to produce palm oil according to the standards of no deforestation, no development on peat and no exploitation of people and communities (NDPE).
As part of the partnership, PTPN will provide Unilever access to its mills and its supplying farmer base, and we will support the mills and farmers to obtain sustainability certification through a combination of dedicated resources, funding and technical expertise. This will ensure smallholder farmers are better positioned to enter the palm oil supply chain – they will be able to increase their productivity while producing palm oil to the right standards.
Marc Engel, our Chief Supply Chain Officer, said: “The MoU with PTPN is the first time we can apply the produce-protect model at scale – our partnership will have a positive impact in Indonesia from an environmental, social and economic perspective, which makes it unique to the industry.”
Addressing concerns with our palm oil suppliers
We know that serious issues, including human rights issues, exist within the palm oil industry. So as well as working alongside our suppliers to help them improve their standards, we need to respond whenever concerns about a particular supplier are brought to our attention – and to make sure our response is transparent and appropriate.
We're committed to handling all allegations of supplier non-compliance with our Policy responsibly and have a clear Grievance Procedure for doing so.
Our Grievance Procedure for Sustainable Palm Oil
Our Grievance Procedure for Sustainable Palm Oil (PDF | 2MB) provides a systematic framework for handling, investigating and resolving both social and environmental issues within our supply chain in a timely, transparent and effective manner.
The process includes three important steps:
- An acknowledgement of the grievance and a preliminary review to determine whether the grievance is applicable to our supply chain.
- An in-depth review of the grievance, working with the supplier and an independent organisation to develop a time-bound action and remediation plan.
- Actions implemented by the supplier to resolve the issue, with the outcomes monitored.
We will often involve an independent organisation at various stages to collate further information and outline the requirements that the supplier needs to adhere to. We have found that it is better to work with suppliers to help improve practices and resolve issues. However, we will take appropriate action, consistent with our Five Principles for Sustainable Palm Oil, against suppliers who are unwilling or unable to comply.