The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

PepsiCo publishes audit on land rights in Brazil

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Oxfam volunteers hold a banner reading "Caution: Ingredients may cause land grabs" outside of PepsiCo headquarters in New York City in October 2013, as part of the Behind the Brands campaign. Photo: Vasia Markides/Oxfam America

How does it measure up?

Chloe Christman is an Advisor for Land Rights and Markets at Oxfam America

After Oxfam launched the Behind the Brands campaign in 2013, PepsiCo and four other food-and-beverage giants agreed to adopt a zero tolerance for land grabs[1] by any actor in their supply chains. Notwithstanding the public pressure—270,000 potential consumers rallied behind the Oxfam campaign— PepsiCo’s commitment was a bold business move. Now, PepsiCo has taken a step to put its policy into practice: It published the findings of an audit of the social, environmental, and human rights effects of its sugar sourcing in Brazil—including the impacts on land rights. But the company’s audit process fell short of Oxfam’s—and others’—expectations. Without a proper audit, how will it know what it needs to fix?

PepsiCo, like other food-and-beverage companies, doesn’t tend to own land. But its suppliers often do, and as the second largest food-and-beverage company in the world, PepsiCo has immense power to influence them. In Brazil, as in many countries around the world, these supplier companies sometimes acquire land from communities without their consent and without providing adequate compensation. Oxfam has documented many cases where families, who had been living off their land for generations, lost their homes, their crops, and the source of their livelihoods to a company looking to increase its profit. One of these cases involved a PepsiCo supplier called Usina Trapiche, a sugar mill in Brazil’s Pernambuco state. As Oxfam wrote in a 2013 report, Trapiche encroached on communities’ land, destroying homes and farms, and forcing 53 families to flee the mangrove they inhabited. They’re still seeking justice.

PepsiCo’s land rights policy aims to ensure the company helps prevent and address this type of conflict. In theory, an audit on land should be a step toward that goal, identifying which suppliers pose risk to communities’ land rights and why, which may have violated them in the past, and what steps they, and PepsiCo, need to take to mitigate and remedy these conflicts in the future.

But PepsiCo’s audit falls short. Oxfam will be doing a more detailed analysis of PepsiCo’s findings in the coming months. At first glance, here are three ways PepsiCo could have done better:

  1. Audit a larger, geographically varied sample of mills, selected, in part, on risk to people

PepsiCo audited three mills which, together, account for approximately 20 percent of its sugar supply from Brazil. All three mills are based in Brazil’s Center South Region, the country’s most industrialized and developed region.

The United Nations Guiding Principles on Business and Human Rights make clear: “Where business enterprises have large numbers of entities in their value chain … business enterprises should identify general areas where the risk of adverse human rights impacts is most significant … and prioritize these for human rights due diligence.” (Commentary of Guiding Principle 17). PepsiCo should have audited a larger, geographically varied sample of mills, selected, in part, because they pose high risk to communities’ land rights, not solely because they are high-volume suppliers. (In particular, Oxfam expected to see more on Usina Trapiche. Oxfam looks forward to continuing conversations with PepsiCo about resolving this case.)

  1. Hear all sides of the story

Checking land tenure and conflicts with 1) government and secondary sources and; 2) communities themselves is part of a keen due diligence process. Regarding the first, PepsiCo took a step in the right direction by consulting FUNAI in its audit, the Brazilian agency for indigenous peoples. But in Brazil there are traditional and other communities like Quilombolas (former slaves who escaped and lived in isolation) that don’t fall under FUNAI’s purview. PepsiCo should have consulted additional sources. Regarding the second, PepsiCo should have gone out to communities to talk with people—and local civil society organizations—about how its suppliers have impacted them. It’s about their lives and their land. They’ll tell PepsiCo what other sources won’t.

  1. Disclose information on mills and farms

There’s a lot more PepsiCo should have shared. Which mills did PepsiCo audit? How many mills does it source sugar from, and which ones? Do the mills own their own land, and do they plan to acquire more land in the future? Do those mills have systems in place to adhere to communities’ free, prior, and informed consent, as PepsiCo’s own policy now requires them to do? Without this information, Oxfam and other stakeholders can’t know the steps PepsiCo is or isn’t taking to implement its policy.

* * *

Oxfam will be following up with PepsiCo on its findings, and hopes others will do the same. PepsiCo has a lot of work left to do in Brazil.

[1] Other companies with ‘zero tolerance’ commitments include: Coca-Cola, Nestlé, Unilever, and Illovo Sugar

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