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Mead Johnson Sustainable Palm Oil

Whereas: as a global leader in pediatric nutrition, Mead Johnson Nutrition uses palm oil in its various branded products. However, the environmental and social impacts of palm oil production make it highly controversial. 

Approximately 90% of palm oil is grown in Indonesia and Malaysia. This has led to significant deforestation. Such deforestation and conversion of carbon-rich peatlands led to the World Bank to rank Indonesia the 3rd largest global emitter of greenhouse gases (GHGs). Peatland conversion accounts for roughly half of Indonesia’s GHG emissions.  Palm oil plantations not sustainably developed and managed have devastated habitats of endangered species, such as the orangutan, and cause massive biodiversity loss.

The U.S. Department of Labor lists the palm oil industry as notorious for using child and forced labor. In the Philippines it is estimated almost 25% of palm labor production comes from child labor.  A July, 2013 Bloomberg Businessweek exposé documented detailed evidence of slavery on palm plantations by a company that sells palm oil to some of America’s largest palm oil importers.

To address these social and environmental concerns associated with palm oil production, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004.  Many companies, including some of our company’s competitors, have committed to source 100% certified sustainable palm oil (CSPO) by 2015 or sooner. CSPO is readily available.  According to the RSPO website, the supply of CSPO exceeds demand by approximately 50%. 

Shareholders are concerned that, absent a comprehensive policy and transparent management system for tracing sourced palm oil to legally licensed suppliers verified as not contributing to deforestation or human rights abuses, Mead Johnson Nutrition may be exposed to significant brand and reputational risks related to its supply chain impacts. Major companies such as Nestle and Unilever have pledged to develop such traceable, deforestation-free palm oil supply chains. This raises the bar for all companies, heightening the risk of inaction to those failing to take responsibility for their supply chains impacts.

Resolved: Shareholders request Mead Johnson Nutrition Company’s board of directors adopt, implement and monitor a comprehensive sustainable palm oil sourcing policy. This policy should be communicated publicly within six months of the annual meeting. 

Supporting Statement:  We recommend the palm oil sourcing policy include goals to: 

source 100% CSPO (or derivatives) through a certification program at least as rigorous as RSPO’s by 2015;
trace our supply chain from the grower level (where feasible) to understand potential risks and impacts;
source all palm oil from plantations which have independent verification they have not contributed to the degradation of peatlands, High Carbon Stock forests or High Conservation Value areas;
respect and support the United Nations’ Guiding Principles on Business and Human Rights, including no forced or child labor, slavery or human trafficking and the protection of indigenous rights throughout our palm oil supply chain; 
avoid palm oil from plantations having significant conflicts related to land tenure.