PepsiCo, the world's No. 3 food and beverage company, committed on Tuesday to take steps to stop illegal land seizures by suppliers of raw materials such as sugar and palm oil as it tries to improve social and environmental standards.
The pledge follows a similar commitment by Coca-Cola last year and comes in response to a campaign by development group Oxfam that is pushing top food and drink companies to improve ethical standards among suppliers in poor countries.
The industry has come under increasing scrutiny in recent years over sourcing of raw materials, attracting criticism on issues ranging from child labour on cocoa farms to the impact of palm oil plantations on rain forests.
PepsiCo said in a statement it had worked with Oxfam and other external experts on a new policy to prevent suppliers displacing any legitimate landowners.
As demanded by Oxfam, PepsiCo also gave details about the amount of soy, palm oil and cane sugar it buys and the main countries that it sources those raw ingredients from, including Brazil, Malaysia, Indonesia, Mexico, India and Thailand.
"These supply chains are incredibly opaque. The companies themselves don't even know where the sugar is coming from. It forces them to ask where their suppliers are getting it from," Chris Jochnick, director of Oxfam's private sector work, said.
Oxfam said PepsiCo would audit its top sugar supplier Brazil in 2014, followed by Mexico, Thailand and the Philippines by the end of 2016, with a particular focus on making sure local communities give consent before their land is sold for farming.
PepsiCo also pledged to source all of its cane sugar from sources certified as sustainable by 2020 and said it would work with suppliers in Brazil and Thailand to that end.
Native land rights are a sensitive subject in Brazil and tensions between farmers and Indians have run high since the government evicted 7,000 farmers and their families from an Indian territory last year, starting violent protests.
Oxfam has ranked the top 10 food and drink companies according to their policies on issues it deems as critical to sustainable agriculture: the rights of women, small-scale farmers and farm workers, as well as water, land, climate change and transparency.
PepsiCo came joint fourth with Mondelez International in the latest ranking, behind Nestle, Unilever and Coca-Cola, while General Mills replaced Associated British Foods in last place. (www.oxfam.org/behindthebrands)
Jochnick said PepsiCo's commitments would help boost its scores for ethical behaviour on land and transparency issues, and Oxfam would follow up to make sure it implements changes.
