Global consumer goods firm Nestlé has broken off a supply contract with Guatemalan palm oil company Reforestadore de Palmas del Peten (Repsa) due to accusations of corruption.
Guatemala’s prosecutor’s office launched an investigation into Repsa, accusing it of paying bribes to receive tax credits, reported just-food on 7 February.
Repsa said in a statement that it would cooperate with the investigators, but Nestlé nonetheless decided to terminate its relationship with the firm due to the allegations.
Nestlé said that it would honour existing contracts but would not renew them and that it expected to cease all commercial ties with Repsa by September 2018.
“We worked diligently with Repsa on the ground in northern Guatemala to address serious allegations made against it related to the violation on workers’ and communities’ rights and environmental degradation – behaviours which are totally unacceptable to Nestlé. Through our engagement, Repsa put in place an action plan to address the issues identified, which we were monitoring through our partner, TFT,” said Nestlé in a statement.
“Repsa is now accused of further corporate governance failures relating to financial irregularities in Guatemala. As such, we have decided to end our commercial ties but hope that the company will continue to implement its action plan regardless of our decision.”
In December 2017, agritrader Cargill also suspended palm oil purchases from Repsa.