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Nestle Revamps Palm Oil Policy After Social Media Backlash

Nestle moved aggressively to clean up its palm oil supply chain Monday, following months of heated social media campaigns drawing attention to its supply chain ties to illegal deforestation practices.

The company has enlisted the help of The Forest Trust to create Responsible Sourcing Guidelines, assess supplier performance, and give technical support to those falling short of the guidelines.

Nestle previously suspended all purchases from Sinar Mas, a palm oil and paper conglomerate implicated by Greenpeace for destructive practices in the Paradise Forests of Southeast Asia. Nestle also took action with third-party traders, which, according to Greenpeace, supply Nestle with the bulk of its palm oil. On Monday, Nestle said it has made arrangement with these suppliers to stop buying Sinar Mas palm oil for delivery to its European factories.

Sinar Mas said last month it would hire two independent auditors to look into the Greenpeace allegations.

"If the allegations are confirmed and sufficient action plans are not put in place Nestlé is determined to ensure that our suppliers do not buy palm oil from Sinar Mas, for all our factories," the company said in a statement Monday.

Nestle has a goal of only buying sustainable palm oil by 2015; about 18 percent of its purchases currently come from sustainable sources. The company expects this proportion will increase to 50 percent by late 2011.

According to Greenpeace, it launched a global campaign targeting Nestle on March 17, included a report tying Nestle product ingredients to Sinar Mas, which it claims was expanding into rainforest, peatlands and orangutan habitat. Nestle suspended direct purchases from Sinar Mas immediately.

Nestle then asked YouTube to pull a controversial video, but it reappeared elsewhere on the web and went viral, angering many in the process. Protesters bombarded Nestle on its Facebook page and on Twitter, causing some to speculate in a Wall Street Journal story whether Nestle should just shut down its Facebook page and start over.

Image CC licensed by Flickr user عليّ ~ Ali.

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