Diving Deep into the Malaysian Pulp and Paper Supply Chain
As part of Nestlé’s commitment to human rights, the food and beverage company and Earthworm Foundation are working to improve recruitment practices in the Malaysian pulp and paper sector.
The origins of this 11-year partnership in pulp and paper lie in assessments conducted at Malaysian pulp converters that supply Nestlé. Joint work in human rights began in 2018, when Nestlé and Earthworm organised a workshop on fair labour practices; targeted at Nestlé’s direct packaging suppliers. This was followed by visits to suppliers to understand pertinent issues, one of which was unethical recruitment of foreign workers.
Ethical recruitment is a challenge for several sectors in Malaysia – including the electronics, palm oil and rubber industries. As such, human rights due diligence has been a key part of both national and international chatter recently. In 2021, the Malaysian government launched the nation’s first National Action Plan on Forced Labour (NAPFL). Similarly, the European Commission – a branch of the European Union – is proposing a directive to hold companies accountable for environmental and human rights issues in their supply chain.
2021 also saw Nestlé launch its new Human Rights Framework and Roadmap, with the aim of strengthening due diligence levels across its value chain and supporting enabling environments to respect and promote human rights. This applies across its agricultural supply chains such as pulp and paper, palm oil, cocoa and hazelnut, to name a few.
“We are seeing a few industry trends crop up, which inform our approach,” said Michèle Zollinger, Global Lead for Sustainable Sourcing for Pulp and Paper and Climate at Nestlé.
Zollinger was speaking at a training held back in mid-2021 with about a dozen of Nestlé’s major Malaysian pulp and paper suppliers. Among the topics covered were ethical recruitment, human rights due diligence, market expectations and good business practices. The training – organised by Nestlé and Earthworm Foundation – was an example of Nestlé’s supplier engagement and capacity building focus.
“The first trend is a shift away from merely reporting to mandatory requirements and legal liability. The second is an evolution of third-party verification, which illustrates a shift from compliance audits to actually checking whether a due diligence process is in place. Thirdly, we are increasingly seeing interest from consumers and investors asking for products that are socially and environmentally friendly,” she said.
Also introduced during the online training session was the Ethical Recruitment Due Diligence Tool, which was co-developed with Nestlé for the palm oil industry back in 2019.
“There are increasing concerns about the ethics of recruiting migrant workers in Malaysia, especially if it involves unscrupulous employment agencies and informal labour intermediaries,” said Kiah Hui Ooi, Senior Manager for Earthworm Foundation in Malaysia. “Therefore, it is important for companies at each level of the supply chain to do due diligence on recruitment.”
A few months after the training, Earthworm’s field team in Malaysia followed up with three prioritised suppliers to review learnings from the training and understand their progress. Given persisting COVID restrictions, the online engagement involved reviewing the companies’ documents, as well as discussions with management on their good practices and gaps to be improved. Learning from the engagements fed into 2022 plans to deep dive with a prioritised supplier on how to improve ethical recruitment issues, while continuing to build sectoral capacity on human rights.
“If you dive deep, things can change,” Zollinger said. “It’s about the people, recruitment and the way we take care of our workers, and an on-the-ground approach is critical to this.”