PepsiCo's Brazilian sugar sourcing audit falls short of expectations: Oxfam

By Vladimir Pekic

- Last updated on GMT

PepsiCo's Brazilian sugar sourcing audit falls short of expectations: Oxfam

Related tags: Pepsico, Audit, Human rights

PepsiCo’s new report on its sugarcane supply chain in Brazil and the impact it has on land rights has been welcomed with caution and some critique by Oxfam.

Oxfam commended PepsiCo on taking a step to put its ‘zero tolerance for land grabs policy’ into practice, but pointed out some gaping holes in the company’s audit process.  

Discussing the PepsiCo report, Oxfam America’s advisor for land rights and markets Chloe Christman said: “Oxfam will be engaging with PepsiCo on what it plans to do next in Brazil to ensure it is taking meaningful steps to implement its land rights commitments.

"Oxfam, communities, and partner organizations expect PepsiCo to identify where it and its suppliers negatively affect communities’ land rights, and take steps to mitigate risks and remedy actual impacts​.”

Audit result positive

PepsiCo has made specific commitments to support the implementation of policies concerning sustainable agriculture, land use, and forestry stewardship throughout its supply chain.

Sugar cane field

Last year, it made a commitment to work with suppliers to source 100% sustainable cane sugar by 2020.

To help implement this commitment PepsiCo engaged an independent third party, Control Union, to perform audits at three sites in Brazil.

Together with its main supplier in Brazil, Copersucar, PepsiCo identified three mills and farms that supply them for assessment of their economic, social and environmental performance as well as their adherence to PepsiCo’s policies.

Together, these mills based in São Paulo, supply approximately 20% of the cane sugar that the company sources in Brazil.

“No evidence of human rights, including land rights, health and safety or environmental practice violations were found,”​ said PepsiCo.

Improvements necessary

While it welcomed the PepsiCo report, Oxfam questioned its methods and asked how PepsiCo could fix problems without conducting “a proper audit of the social, environmental, and human rights effects”.

Oxfam pointed out that the three mills in Brazil’s center south region do not compose a representative, risk-based sample of PepsiCo’s sugar sourcing in Brazil.

Sugar mill

PepsiCo should have audited more mills in more areas of the country, selected in part because those mills’ operations pose high risk to communities’ land and human rights​,” Christman told BakeryandSnacks.com.

It also highlighted an apparent lack of consultations with all relevant stakeholders.

While PepsiCo was commended for consulting the Brazilian agency for indigenous peoples (FUNAI) during the audit, other sources were lacking, Oxfam said.

PepsiCo should have gone out to communities to talk with people—and local civil society organizations—about how its suppliers have impacted them. It’s about their lives and their land. They’ll tell PepsiCo what other sources won’t​,” explained Oxfam in its first assessment of the PepsiCo report.

Finally, the PepsiCo audit was perceived as being too timid in terms of information transparency.

It did not list the names of the audited mills nor did it include the names of all mills that supply PepsiCo, while issues of land ownership by the mills were not addressed fully.

Without this type of specific information, Oxfam said, stakeholders cannot know the steps PepsiCo is or is not taking to implement its policy.

Oxfam in talks with PepsiCo

As with all companies in its Behind the Brands campaign, Oxfam is in touch with PepsiCo regularly about its commitments and implementation.

Oxfam looks forward to further conversations with the company about how it can improve how it conducts audits on land rights, in Brazil and in other key commodity sourcing countries​,” said Christman.

Oxfam’s Behind the Brands scorecard ranks companies on public policies and commitments on seven themes. Oxfam included indicators on impact assessments (similar to audits) in the land theme.

If PepsiCo does not take steps to improve how it conducts its audits, including with the participation of communities, the company will not score on all of the indicators related to impact assessments.

PepsiCo’s ‘zero tolerance’ for land grabs commitment is bold, and Oxfam congratulates the company for having taken this first step. But PepsiCo needs to be just as bold in putting its commitments into practice. PepsiCo’s Brazil audit is just one step of an ongoing journey implementing ‘Zero Tolerance’, one that PepsiCo fell short on. Now, Oxfam expects PepsiCo to learn from it, and to improve how it assesses its land rights risks and impacts in Brazil and elsewhere​,” Christman concluded.

PepsiCo’s summary report is available HERE​, while the Oxfam reaction to the audit is available HERE​.

Related news

Follow us

Products

View more

Webinars