Hershey Announces Enhanced Palm Oil Sourcing Policy

25 Sep 2014 --- The Hershey Company announced a new palm oil sourcing policy that updates and strengthens its commitment to source 100 percent traceable and responsible palm oil, a commitment the company announced in December 2013.

The comprehensive sourcing policy details the requirements to which all suppliers in the company’s palm oil supply chain will be held accountable. In addition to provisions that protect against deforestation, preserve native species’ habitats and protect the environment, the new sourcing policy also provides details on labor and human rights protections and the inclusion of smallholder palm farmers in the supply chain.

“Since we first joined the Roundtable on Sustainable Palm Oil (RSPO) in 2011, we have strived to ensure we are responsibly sourcing palm oil,” said Frank Day, Vice President of Global Commodities at The Hershey Company. “Our new sourcing policy gives our stakeholders the roadmap for how we will go beyond RSPO-certified palm oil and achieve a truly responsible and sustainable palm oil supply chain at The Hershey Company. Our new palm oil sourcing approach positions us as a leader among global food companies in sustainable palm oil.”

To help trace its palm oil supply chain and safeguard supplier adherence to the company’s new palm oil sourcing policy, Hershey has become a member of The Forest Trust (TFT). TFT will bring an important perspective and expertise to review and evaluate the Hershey palm oil supply chain and help the company make adjustments to achieve its progressive objectives. TFT is a respected global non-profit organization that works with companies to help transform the way they source their products.

“Taking the decision to actively move beyond the accepted norm in palm oil is a very commendable one,” says TFT Director Robin Barr. “It’s also essential for transformation in the industry. Hershey has put a great deal of considered thought into its policy, and the commitment to involve smallholders is vital for shaping an industry where responsibility and reward can be experienced by all.”

The Hershey Company is working towards establishing the best path forward to a sustained, traceable, responsible palm oil supply chain, and expects to achieve traceability to the mill level by first quarter 2015. From there, the company will use this information to assess which suppliers present the highest risk for engaging in deforestation. Hershey will require that these suppliers commit to implementing responsible expansion procedures to the plantation level in 2016.

Hershey spent the first half of 2014 meeting and talking with many stakeholders across the palm oil supply chain, including commodities companies, plantation owners, non-profit groups and non-governmental organizations to fully understand the complex range of concerns and issues affecting the industry. The new policy reflects a synthesis of many stakeholders’ points of view and addresses the most important concerns in palm oil sourcing.

“This policy really touches on all of the key issues that have impacted the palm industry during the past several years,” added Day. “We are proud of a policy that sets a high bar for how palm oil can be responsibly and sustainably sourced.”

The Hershey Company will publicly report progress annually on its website beginning in the first quarter of 2015 after having completed the initial phase of supply chain mapping with the TFT.

The Hershey Company is committed to high standards in responsible and sustainable palm oil sourcing. In 2013, the company announced a commitment to sourcing 100% traceable and responsible palm oil to achieve visibility into the sources of palm oil products within our supply chain.

This is a substantial commitment that not only goes beyond our current 100% RSPO-certified sourcing but positions The Hershey Company as a leader among global food companies. The company aims to source only responsibly grown palm oil that does not contribute to the destruction of forests or the exploitation of workers and local communities.

“The Hershey Company is working towards establishing the best path forward to a sustained, traceable, responsible palm oil supply chain, and expects to achieve traceability to the mill level by first quarter 2015. From there we will use this information to assess which suppliers present the highest risk for engaging in deforestation. We will require that these suppliers commit to implementing responsible expansion procedures to the plantation level in 2016.”

In July 2014, The Hershey Company became a member of The Forest Trust (TFT), a non-profit organization that will help us achieve a traceable supply chain that adheres to our enhanced Responsible Palm Oil Sourcing Policy. This policy builds on the fully traceable palm oil commitment the company announced in December 2013 and provides additional details on the expectations to which we will hold our palm oil suppliers accountable.

The Hershey Company is now working closely with its suppliers and industry experts as it strives to ensure its palm oil supply comes from fully traceable and responsible sources. In addition to adhering to the RSPO standards, our suppliers will be required to provide palm oil that is sourced from a supply chain that also adheres to the following requirements:

1. Does not contribute to deforestation, including protection and conservation of High Conservation Values and High Carbon Stock forests.

2. No new developments on peat4, regardless of the depth.

3. Identify and reduce Greenhouse Gas Emissions in existing operations5 including mill effluent.

4. Operate in compliance with national and local laws and regulations and international labor and human rights laws and norms6. Respect, recognize and uphold the rights of all workers including contract, temporary and migrant workers through compliance with the International Labor Organization (ILO) core conventions and applicable international instruments.

5. Respect and uphold land tenure rights, the rights of Indigenous Peoples and local communities to give or withhold their Free, Prior and Informed Consent to any development on their lands to which they hold legal, communal or customary rights7.

6. Resolve all complaints and conflicts and remediate policy violations through an open, balanced, transparent and accountable grievance and dispute resolution mechanism8.

7. Comply with The Hershey Company’s Supplier Code of Conduct.

The Hershey Company intends to work with palm oil suppliers that not only share our values but are willing to develop action plans to adhere to this policy. When violations occur with the commitments noted above, the company will work with suppliers to remediate these actions, and, where necessary, find alternative suppliers.

The Hershey Company will publicly report progress annually on our website beginning in the first quarter of 2015 after we have completed the initial phase of supply chain mapping with the TFT.

1 ‘Responsible expansion procedures’ include respect for local laws, the right of communities to free, prior and informed consent, protection of peat, protection of high conservation value areas, and protection of high carbon stock forests.

2 High Conservation Value (HCV) areas contain items of biological, social or cultural value that are important to conserve, including rare, threatened and endangered species and their habitat. www.hcvnetwork.org

3 Primary forests, high, medium and low-density forests and regenerating forests are recognized as High Carbon Stock (HCS) forests. HCS forests in Indonesia and Malaysia are defined as natural forest areas with above ground carbon stocks above a threshold set in the range of 25-70 tons.

4 Peatland being defined as area with soil consisting of 65% or more organic material.

5 Consistent with RSPO P&C 5.6 which states ‘Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.’

6 Including the Universal Declaration of Human Rights, United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), FAO Voluntary Guidelines on Tenure and Food Security; ILO Conventions 29, 87, 98, 100, 105, 111.

7 In accordance with the Universal Declaration on the Rights of Indigenous Peoples and FAO Voluntary Guidelines on Tenure and Food Security and RSPO Principles 7.5, 7.6, 2.2, and 2.3.

8 Consistent with RSPO P&C 6.3 and 6.9.3