Sunteți pe pagina 1din 3

Of Orungutans and Chainsaws: Cargill, Inc.

confronts the Rainforest Action


Network Advocacy Case Solution

Q1) Define the issue in the case. How urgent and important is it?

A1) Cargill, Inc., the United States based agribusiness company has been targeted by the
Rainforest Action Group (RAN), a prominent environmental NGO also based out of the United
States, for using non-sustainable ways of production of palm oil in Indonesia. Cargill is the largest
importer of palm oil into the U.S. According to RAN, Cargill is destroying rainforests in
Indonesia for cultivation of oil palms. RAN is using pressure tactics to force the company to
switch to sustainable palm oil. RAN has forced many of Cargills clients to move to
sustainable palm oil and has also significantly damaged Cargills reputation by holding public
campaigns. However, Cargill has maintained that it has adhered to the principles of
Roundtable on Sustainable Palm Oil (RSPO) and has publicly denied doing anything wrong.
Now, Cargills CEO has to come up with a plan to respond to RAN.

The issue is very important and urgent for Cargill as RANs actions are forcing Cargills
clients to look for alternate sourcing options for palm oil. Also, Cargills reputation is being
damaged immensely by RANs actions. Also, the issue is important for RAN since they are
fighting to save the rainforests and non-sustainable oil palm plantations are causing rapid
extinction of rain forests and animal species.

Q2) What are RANs demands and why should Cargill pay attention to RANs demands?

A2) RAN demands that Cargill should lower the negative impacts of its palm oil operations
and set an example for other agribusinesses throughout the world. RAN emphasizes that
Cargill is the most influential palm oil producer and trader in the U.S. and accuses it of owning
and operating two undisclosed oil palm plantations in Indonesia which are destroying rainforests.
RAN accuses Cargill for violating RSPOs criteria and demands RSPO to investigate and take
action against the company. RAN also wants Cargills customers to cancel their contracts with
Cargill.

Cargill should pay immediate attention to RANs demands because Cargills customers like
General Mills, Uniliver, Nestle, Kraft and Burger King are reacting to RANs reports and
announcing to stop buying palm oil from companies accused of destroying rainforests. RAN is
also significantly hampering Cargills reputation by holding public campaigns against the the
company. RAN is publicly putting banners at strategic locations to gain attention of the company
and media. Cargills response of not doing anything wrong has had no impact on RAN, so Cargill
should come up with a plan to save its reputation and deal with RAN immediately. One of Cargills
palm oil supplier Sinar Mas has already been convicted of breaching RSPOs principles and
criteria and breaking Indonesian law. Cargill can also face a law suit against it if it is not able to
justify the charges put on it by RAN.

Q3) Who are the key stakeholders and what affect might Cargills possible decision have on
them?

A3) The key stakeholders of Cargill are:


Ingredient Manufacturers and product manufacturers (Cargills Customers)
Suppliers (palm oil suppliers private companies, smallholders)
Transport and shipping companies
Refiners and blenders
Ultimate retailers
Environment and nature conservation NGOs (like RAN, Greenpeace)
Industry agencies/ trade associations (like RSPO)
Governments (Palm oil producing nations government)
Employees
Investors
Cargills possible decision would be to clean up its supply chain and start using sustainable palm
oil completely. In that case, it will discontinue its relationship with suppliers like Sinar Mas and
switch to sustainable palm oil producers. This decision will affect its key stakeholder relationships
in the following ways:
Cargill will gain its customers trust once again after it confirms switching to sustainable
palm oil sourcing. Cargills major customers had made it clear that they want to do business
only with suppliers who supply sustainable palm oil. So, Cargills decision would help gain
the confidence back.
It will have to investigate existing suppliers and sign contracts with new suppliers to obtain
sustainable palm oil. Cargill will have to terminate its contract with existing suppliers who
are identified for doing wrong.
Cargill will have to give proofs (like new and updated contracts with suppliers and not
having any undisclosed operations) to organizations like RSPO, RAN, and Greenpeace that
it is not sourcing any non-sustainable palm oil and it hopes to maintain its relationship with
RSPO.
The palm oil supply chain (suppliers, refiners, manufacturers, retailers) will have a
significant impact because Cargill will act as an example for them, since Cargill is the most
influential palm oil producer and trader in the U.S.

S-ar putea să vă placă și