KUALA LUMPUR, MALAYSIA — The Roundtable on Sustainable Palm Oil has suspended the membership of Nestle S.A., citing problems with the company submitting progress reports. Nestle, Vevey, Switzerland, failed to submit an Annual Communication on Progress (A.C.O.P.) report for 2016 and the report for 2017 failed to include a time-bound plan, according to the R.S.P.O.

The R.S.P.O. also noted that Nestle has an unpaid overdue membership fee of €2,000.

“We share the R.S.P.O.’s ambition for improving the social and environmental performance of the palm oil sector,” a Nestle spokesperson said. “Our approaches to this do differ, and we respect the R.S.P.O. board’s decision regarding Nestlé’s membership. We will continue our dialogue with R.S.P.O. and hope to re-qualify in the near future.”

Because of the suspension, Nestle loses voting rights at R.S.P.O. general assemblies, cannot become or continue being members of any task forces or working groups within the R.S.P.O., and cannot claim membership or use of certified sustainable palm oil. The certification suspension extends to all Nestle subsidiaries.

The R.S.P.O. has requested that Nestle fully comply and commit to the R.S.P.O. statutes and code of conduct for members by July 20. The R.S.P.O. will lift the suspension and reinstate certification once it is satisfied the conditions have been met.

In response, Nestle said it has time-bound plans in place for its “responsibly sourced” palm and annually reports on its progress. Notification of the plans and relevant online links were submitted to the R.S.P.O. as part of the A.C.O.P. report.

“However, as Nestle’s goal is not to achieve 100% R.S.P.O. certification of palm oil, we were asked by R.S.P.O. to remove our response and re-submit that we have ‘no action plan,’” Nestle said. “Whilst we respect the decision of R.S.P.O. to consider only action plans focused on moving toward 100% certification, we believe that this approach is not conducive to achieving the levels of industry transparency and transformation the sector so urgently needs.

“We will continue to provide full transparency to our clients and consumers with progress against our commitments. As an example, in early June we published a list of 10 companies that will be removed from our supply chain for not making enough progress toward our responsible sourcing provisions as well as a dedicated action plan to address labor rights issues in the palm oil industry.”

Nestle said it remains committed to achieve 100% responsibly sourced palm oil by 2020. The company currently is at 58%. Nestle has traced 50% of the palm oil it buys back to the plantations and 92% back to the mills.

“Whilst we respect the decision of R.S.P.O. to consider only action plans focused on moving toward 100% certification, we believe that this approach is not conducive to achieving the levels of industry transparency and transformation the sector so urgently needs." — Nestle

“We have always viewed the R.S.P.O. certification as one tool in achieving that ambition, but it is not the only tool,” Nestle said. “We respect the R.S.P.O. board decision and recognize that there are fundamental differences in the theory of change that Nestle and R.S.P.O. are employing to realize the ambition of a wholly sustainable palm oil industry. We believe in achieving traceability to plantations and transforming supply chain practices through interventionist activities instead of solely relying on audits or certificates. We also believe that in order to achieve genuine industry change, we need to embed the true cost of sustainable production into supply chain procurement practices, rather than focusing on premium mechanisms only.”

The R.S.P.O., based in Kuala Lumpur, is a not-for-profit that unites stakeholders from the seven sectors of the palm oil industry: oil palm producers, processors or traders, consumer goods manufacturers, retailers, banks/investors, and environmental and social non-governmental organizations (N.G.O.s). The R.S.P.O. seeks to develop and implement global standards for sustainable palm oil.