Neste Oil’s response to the Finnwatch report on the company’s supply chain
Finnwatch published a report on how various Finnish companies source their palm oil, including Neste Oil’s supply chain, on 16 September. The report highlighted shortcomings in matters related to things such as workers’ rights on a plantation managed by Neste Oil’s Malaysian palm oil supplier, the IOI Group. We take the report’s findings very seriously, as operations of this type do not comply with our sustainability principles or policies.
Corrective action under way
After learning of Finnwatch’s findings, we immediately took action to establish what has happened and remedy the situation. We have requested the IOI Group provide an immediate explanation of all of the report’s findings. We met their representatives in Kuala Lumpur on 28 August and discussed Finnwatch’s findings in detail, and have stated that we expect them to take corrective action to ensure that working conditions meet the standards of the Roundtable on Sustainable Palm Oil (RSPO) and our sustainability criteria in respect of providing a decent living wage to workers, improving the position of migrant workers, and ensuring freedom of association for employees.
We are working with certification bodies to clarify how auditing related to working conditions and workers’ rights is currently carried out, and will call for measures to be taken, if necessary, to improve the quality of audits. We will work to further develop RSPO and ISCC certification and improve the criteria used to for, example, determine what constitutes a decent living wage and how the rights of migrant workers are protected.
Based on the issues that have been identified, we will improve the effectiveness of how workers’ rights are monitored in our supply chain, by tightening our due diligence procedures for example. In addition, we will initiate a comprehensive review, together with an impartial third party, of the working conditions of migrant workers and how workers’ rights are respected in our supply chain.
Senior managers from Neste Oil will meet representatives of IOI in the next few days to discuss the issues identified in the Finnwatch report and the measures needed to remedy the situation.
Cooperation with NGOs helps promote sustainable operating practices
NGOs do valuable work in highlighting issues and problems, and sustainable companies have an important role to play in dealing with these types of issues and improving conditions in today’s global supply chains. We worked with Finnwatch when they were putting their report together and helped Finnwatch visit an IOI plantation to carry out observations in the field. We are committed to developing sustainable operating practices and will initiate further investigations and development work on the issues identified in the Finnwatch report in collaboration with an outside organization.
Find out more about the Finnwatch report.
Neste Oil’s principles covering the sourcing of renewable feedstocks
We are committed to sourcing only sustainably produced feedstocks. We require all our partners to act sustainably and in accordance with the law and international conventions. Neste Oil’s key sustainability principles are outlined in our Sustainability Policy and Sustainability principles for biofuel.
How our sustainability principles work in practice
Sustainability requirements are included in the terms and conditions of our supply contracts. Impartial, third-party inspectors audit our supply chain regularly every year. If we become aware of issues or problems, we always require the supplier to take corrective action and work with them to develop their operations. If there is no improvement in their operations and a supplier loses their certificate, we will terminate their supply contract.
Further information on how we source palm oil can be found at our website.
Kaisa Hietala, Executive Vice President, Renewable Products, tel. +358 (0)50 458 4128
We will organize a Q&A session on Twitter today at 14.00-14.30 EET. Questions can be sent to Neste Oil’s account: @nesteoilgroup.