Indofood Agri Resources, which refines crude palm oil and cultivates sugar cane crops, said yesterday that it is complying with Indonesian labour laws and sustainability policies.
In response to a media report alleging that PepsiCo had suspended procurement from IndoAgri over labour abuse claims, the company said that it has not been a supplier to PepsiCo since early last year, and that this had not resulted in a material impact on its business.
"Most of our plantations are certified under the RSPO (Roundtable for Sustainable Palm Oil) and ISPO (Indonesian Sustainable Palm Oil) certification schemes for sustainability," the group said.
It added that the company complies with the labour laws and regulations of the Indonesian government, and does not have any disputes with any of its 10 labour unions or the Indonesian Ministry of Labour.
"We have also recently received a good compliment and zero accident award from the Indonesian Ministry of Labour," IndoAgri said.
According to media reports, a 2016 probe by several campaign groups claimed that there were child labour and worker exploitation, such as low wages and hazardous working conditions, on Indonesian plantations operated by Singapore-listed IndoAgri.
The reports added that although IndoAgri has taken action to address the complaints, PepsiCo decided to suspend ties "pending further progress and visibility around the issues" after it looked into the allegations.