Coca-Cola has said it will cut off suppliers that do not follow guidelines to protect the land rights of local communities in developing countries.
The soft drinks company also pledged to use its clout to encourage other food and beverage firms, traders – especially of soy, sugar and palm oil – as well as governments to endorse and implement voluntary UN guidelines on responsible governance of tenure on land, fisheries and forests.
"The Coca-Cola company believes that land grabbing is unacceptable," it said. "Our company does not typically purchase ingredients directly from farms, nor are we owners of sugar farms or plantations, but as a major buyer of sugar, we acknowledge our responsibility to take action and to use our influence to help protect the land rights of local communities."
Coca-Cola, based in Atlanta, Georgia, said it would conduct third-party social, environmental and human rights assessments beginning in Brazil, Colombia, Guatemala, India, Philippines, Thailand and South Africa, critical sourcing regions for the company.
These countries are among the top 16 from which Coca-Cola sources cane sugar. Six of these countries have been identified with human rights violations by the US department of labour. The assessments will begin this year with Colombia and Guatemala and will cover the other 14 countries by 2020.
Sugar is a key ingredient for food and drinks firms: 51% of sugar produced ends up in processed foods including soft drinks, sweets and ice-cream. It uses the most land for food production – sugar is grown on 31m hectares, an area the size of Italy. There have been 100 recorded large-scale land deals for sugar production occupying at least 4m hectares (11m acres) of land since 2000, according the charity Oxfam.
Coke's action plan followed an Oxfam report in October, Sugar Rush, which said sugar, along with soy and palm oil, was driving large-scale land acquisitions and land conflicts at the expense of small-scale food producers and their families.
In 2011, the global trade in raw sugar was worth $47bn (£29bn). Of that $33.5bn of exports came from developing countries. Yet in spite of the risks of land conflicts associated with sugar, soy and palm oil production, a lack of transparency by food and beverage giants makes it difficult for the public to hold companies accountable, Oxfam said in its report.
Coca-Cola disclosed that its top cane sugar countries were Brazil, Mexico, India and named its top three company suppliers as Copersucar (Brazil), Mitr Phol (Thailand), and Dangote (Nigeria).
Pledging to crack down on suppliers that do not adhere to relevant supplier guiding principles (SGP), Coca-Cola said: "If a supplier fails to uphold any aspect of the SGP requirements, the Coca-Cola company will work with the supplier on corrective action. If such action is not taken, the supplier relationship will be terminated."
Coca-Cola plans to implement zero-tolerance strategy for land grabs through adherence the principle of free, prior and informed consent across its operations (including bottling partners) and will require its suppliers to adhere to this principle. The company said it would recognise and safeguard the rights of communities and traditional peoples to maintain access to land and natural resources.
Oxfam, which has urged Coca-Cola, PepsiCo and Associated British Foods to adopt a zero-tolerance policy on land grabs, welcomed Coca-Cola's move as setting a new standard for commitments in the food and beverage industry.
"Coca-Cola's leadership in declaring zero tolerance for land grabs is a vital first step," said Penny Fowler, head of private sector advocacy. "We look forward to tracking the actions the company takes to follow through on their promises. In particular we will continue to advocate, along with local partners, for appropriate resolution for the communities in Brazil and Cambodia who continue to struggle to regain the rights to their land. The ball is now in PepsiCo and ABF's court to follow suit."
Business and human rights experts said Coke's commitment on land grabs represented a significant step towards respecting human rights.
"While Coca-Cola does not own or control sugar farms, it is a major buyer of sugar around the world," said Salil Tripathi, director at the Institute for Human Rights and Business in London. "If sugar comes from a farm where land has been acquired with force, or after paying insufficient compensation to customary owners, then the farm becomes tainted, and the sugar turns bitter. Companies like Coca-Cola are in a position to influence better human rights outcomes because of their sheer size. Other companies – large and small – should continue on this path."
Coca-Cola has been accused in the past of drying up farmers' wells and destroying local agriculture in pursuit of water resources to feed its plants. There have been particularly bitter disputes in India. Coca-Cola's operations rely on access to vast supplies of water, as it takes almost three litres to make one litre of Coca-Cola.
