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Safeway Sustainable Palm Oil

Resolved: Shareholders request Safeway Inc. adopt a comprehensive sustainable palm oil sourcing policy for its private label brands.
 
Supporting Statement:
 
The social and environmental impacts of palm oil production make it highly controversial. Failure to manage reputational risk connected to palm oil in supply chains has been disruptive for a number of companies including Nestlé, Cargill and Kellogg.  20 U.S. food companies are currently the focus of a public palm oil campaign linking them with human rights abuses, orangutan deaths, and rainforest destruction.
 
In the Philippines, an estimated 25% of palm production involves child labor. The U.S. Department of Labor reports that, in Indonesia and Malaysia, child and/or forced labor are endemic to palm oil production. A Bloomberg Businessweek exposé published in July 2013 documented detailed evidence of slavery on palm plantations by a company that supplies some of America’s largest palm oil importers.
 
Due primarily to deforestation for palm oil, Indonesia has been cited as the third largest emitter of greenhouse gases (GHGs). The conversion of peatlands accounts for roughly half of Indonesia’s GHG emissions but less than 0.5% of its gross domestic product. Many palm oil plantations devastate habitats of endangered species and cause massive loss of biodiversity.
 
To address the profound concerns associated with palm oil production, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004.  Many companies, including some of Safeway’s peers, such as Kroger and Wal-Mart have committed to source 100% certified sustainable palm oil (CSPO) by 2015 or sooner for their private label brands. Safeway has not yet made such a commitment.  
 
CSPO is readily available, with supply exceeding demand by approximately 50%.
 
However, relying only on RSPO certification does not fully address the environmental, social and corporate reputational risks of palm oil. As a result, most non-governmental organizations (NGOs) recommend that companies commit to CSPO as well as the additional items specified below.
 
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 the supply chain back to the grower level, where feasible, to understand risks and impacts;
  • Source all palm oil from plantations that have not degraded peatlands or High Carbon Stock forests; 
  • Protect human and indigenous rights throughout the supply chain;
  • Avoid sourcing from plantations with conflicts relating to land tenure;
  • We also recommend Safeway commit to:
  • Annually disclose results of reputable independent 3rd-party audits of progress in implementing the sourcing policy; 
  • Use GreenPalm certificates only when segregated or mass balance CSPO is not available, and strive to phase out use of certificates because they have lost support of most NGOs;
  • Engage as an active stakeholder to improve the certification program Safeway uses so that the certification addresses all key elements of the sourcing policy.