Sustainable Procurement
Institution of Sustainable Procurement Policies
There are various underlying problems regarding raw materials production processes, including child labor, forced labor, poor working conditions, and the negative environmental impact on the areas around the production site.
The NISSIN FOODS Group instituted the Basic Policy on Green Procurement in May 2007 and is promoting procurement of environmentally friendly raw materials. In addition, we build a traceability system from raw materials to finished products and product shipment for the purpose of ensuring product quality.
To strengthen these initiatives, in September 2017 we instituted the NISSIN Group Policy on Sustainable Procurement. This policy addresses food safety, respects the global environment and human rights, and proclaims our commitment to procuring legally produced raw materials. For realizing this policy, the cooperation of our tier 1 suppliers is important. We therefore inform them of the policy and obtain signed documents on the confirmation.
Status of Sustainable Procurement for Palm Oil
Palm oil is a vegetable oil extracted from oil palms. Oil palms are grown mainly in tropical areas such as Indonesia and Malaysia. Some plantation farms have been cited for destroying rainforests and ecosystems, emitting greenhouse gases (GHG) from peatland fires, and violating the human rights of plantation workers, and other issues.
Commitment to the Procurement of Sustainable Palm Oil
The NISSIN FOODS Group supports the No Deforestation, No Peat, No Exploitation (NDPE) requirement. We have committed to cooperating with our suppliers and other stakeholders to procure sustainably sourced palm oil which has been produced in consideration of the environment of the palm's habitat and workers' rights.
- ・Protect high Conservation Value (HCV) areas and High Carbon Stock (HCS) forests, zero deforestation
- ・Prohibit the new development of peatland regardless of depth
- ・Prohibit burning for planting, land development, and other types of development
- ・Respect the rights of indigenous people and local residents, and prohibit infringement of land rights
- ・Comply with the Principles and Criteria for the Production of Sustainable Palm Oil* set forth by the Roundtable on Sustainable Palm Oil (RSPO)
- ・Confirm traceability, extending all the way to plantation farms
Principles and Criteria for the Production of Sustainable Palm Oil set forth by the RSPO
We comply with human rights policies to respect for human and labor rights
NISSIN FOODS Group Policy on Human Rights
Implementing assessments
- ・The NISSIN FOODS Group, together with Japanese domestic oil and fat manufacturers that supply the Group, is confirming that there are no violations of local laws at the primary refineries and oil mills from which domestic oil and fat manufacturers are sourcing their products.
- ・In case if we find some local suppliers potentially have negative impacts on the environment or human rights, we cooperate with oil and fat manufacturers to investigate the issues and implement some measures. In specific, we monitor oil mills and plantation farms for potential problems by looking at the grievance list managed by oil and fat manufacturers. We also take actions, including providing corrective guidance or the suspension of business transactions. We confirmed with oil and fat manufacturers that since 2019, there were 7 cases of providing corrective guidance, including strengthening traceability to plantation farms, and 3 cases of suspended trading with oil mills and plantation farms.
- Future Initiatives
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- ・Together with the Caux Round Table (CRT) Japan, a group of outside experts, members of the Resourcing Division and the Sustainability Committee of NISSIN FOODS HOLDINGS plans to visit plantation farms and local residents, conduct environmental and social field surveys, and conduct an interview with local human rights NGOs.
- ・The assessment sheet to be used in these field surveys and interviews reflect the various standards established by countries and international institutes, including the NDPE, RSPO, MSPO*1, ISPO*2 and ISCC*3, and will be established with the cooperation of the Caux Round Table Japan Committee.
- *1MSPO: Malaysian Sustainable Palm Oil
- *2ISPO: Indonesian Sustainable Palm Oil
- *3ISCC: International Sustainability & Carbon Certification
Procure RSPO-certified palm oil
To procure palm oil that has received third-party certification that production takes into consideration factors including the prevention of deforestation and protection of biodiversity, the NISSIN FOODS HOLDINGS became a member of the Roundtable on Sustainable Palm Oil (RSPO)*1 in October 2017. From March 2019, all domestic plants that manufacture CUP NOODLES began procuring RSPO-certified palm oil. At present, the CUP NOODLES*2 packages bear the RSPO certification mark.
The NISSIN FOODS Group endorses the Principles and Criteria of the RSPO, which are determined after discussions with many stakeholders. And in April 2019, NISSIN FOODS HOLDINGS joined, as a board member, the Japan Sustainable Palm Oil Network (JaSPON) - which promotes the use of RSPO-certified palm oil.
- *1RSPO stands for Roundtable on Sustainable Palm Oil. The goal of the RSPO is to promote and operate a sustainable palm oil industry. It is an international non-profit organization established in 2004 by the World Wildlife Fund (WWF) and companies that are closely connected with palm oil. The organization is headquartered in Kuala Lumpur Malaysia. The RSPO certification mark is given to palm oil produced at RSPO-certified palm oil plantation farms and products distributed and processed by certified business operators. As of June 2020, the RSPO has more than 4,000 members worldwide, including palm oil producers, processors, manufacturers, retailers, and environmental NGOs from various walks of life. These members pledge to produce, supply and use RSPO-certified sustainable palm oil. Numerous stakeholders participate in the RSPO to repeatedly conduct talks while aiming to product and use sustainable palm oil. The members also review RSPO Principles and Criteria to address changes in conditions.
- *2Only applies to regular flavor/size CUP NOODLES. It does not apply to variations (different sizes and flavors).
Goals and achievements in palm oil procurement
In the NISSIN FOODS Group’s environmental strategy, EARTH FOOD CHALLENGE 2030, we set a goal to raise the procurement rate for palm oil that is assessed to be sustainable to 100% for the entire group by FY2031. We are undertaking measures to achieve this goal as quickly as possible. In addition, we aim to raise the procurement rate for palm oil that is assessed to be sustainable to 100% for our instant noodle business in Japan by FY2026.
Strengthening the supply chain management system in regions in Asia
From June to November 2020, we conducted a survey (online) for and dialogues with small-scale palm oil farmers assessed to be on our supply chain. This initiative was conducted with the support of Caux Round Table (CRT) Japan and Serikat Petani Kelapa Sawit (SPKS)*3, a local union of small-scale oil palm farmers in Indonesia. The 20 farmers targeted this time were also all farmers under Kredit Koperasi Primer Anggota (KKPA) *4.
| Background | The NISSIN FOODS Group recognizes that, even in the supply chain within the Asia region, which we have identified as a human rights risk, human rights and environmental issues related to palm oil production and farmers (small-scale plantations) are top priority issues. We undertake initiatives to strengthen our system for monitoring the palm oil supply chain. Currently, in addition to the acquisition of RSPO certification, we receive reports from oil manufacturers about details of issues given to manufacturers from producers and other parties via the complaint handling list, and provide support to deal with these issues. At the same time, we also think it is important to directly confirm the working environments and existence of human rights infringement of producers (especially small-scale farmers) who may be prone to labor exploitation and have difficulty voicing their grievances due to their weak business positions. |
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| Purpose | To understand in greater detail the state of palm oil production areas and farmers (small-scale plantations) and the impact on the local environment and workers’ human rights brought about by palm oil production activities, and strengthen the supply chain monitoring system |
| Scope |
Survey respondents: 20 small-scale farmers Dialogue participants: 18 in total (local farmers association, local farmers union, local suppliers, and other relevant parties in addition to 10 small-scale farmers; excluding CRT Japan members, SPKS, and relevant parties from the NISSIN FOODS Group) |
| Method | Due to concerns about the spread of COVID-19, for the preceding survey, SPKS staff visited the targeted farmers one by one to collect their responses. In addition, for the dialogues, the number of participants was limited and seats were spaced apart. |
Process
Survey scope and results
From the results of the preceding survey and dialogues, we did not identify any issue which needs to be handled immediately among the small-scale farmers who participated in the survey this time. However, out of the 10 core sections, some concerns were seen in the areas of economic sustainability and occupational safety and health. The survey participants this time were all KKPA farmers. Concerns regarding economic sustainability were raised by the farmers union. For example, when independent farmers without KKPA contracts try to sell oil palm fruit clusters through other routes via middlemen, the selling price can be around 20% to 30% lower compared to when they are delivered to palm oil mills based on KKPA contracts, resulting in independent farmers being placed in economically difficult situations.
In addition, while companies that sign KKPA contracts are in positions that are responsible for the occupational safety and health of farmers, in reality, it was found that companies do not supply personal protective equipment or it is not clear which party should supply such equipment. The Group has asked local suppliers—who are the management companies—to make improvements so that production activities are properly conducted with due consideration for the farmers’ occupational safety and health. The improvements include the promotion of initiatives in accordance with RSPO and the Group’s procurement policy and the clarification of roles for achieving this.
- Future actions
- The NISSIN FOODS Group will continue to conduct such surveys, dialogues, and other similar measures to seek compliance from the entire supply chain—including major suppliers and palm oil farmers—with the Group’s sustainable procurement and other policies. At the same time, we will confirm the state of implementation. In addition, we will strive to understand the environmental and social situations surrounding small-scale farmers and other parties as well as the problems obstructing compliance with and implementation of policies, and study and implement measures toward improvement together with suppliers. Specifically for small-scale farmers and similar parties, we will also encourage understanding about sustainable agricultural practices (production activities) and provide information so that farmers themselves notice latent risks and concerns that should be raised as issues. Through these actions, we will support more effective functioning of complaint handling mechanisms established by suppliers and local administrations.
- *3About Serikat Petani Kelapa Sawit (SPKS)
This is a union of small-scale oil palm farmers established in Indonesia in 2006. It supports production of oil palm with consideration for the sustainability of farmers.
The union has a network of more than 8,000 small-scale farmers in seven regions across Indonesia. Some of its activities include data collection and mapping of small-scale farmers, organization of farmers, training to improve productivity, and supporting the acquisition of certification—such as ISPO and RSPO—by farmers.
Union of small-scale oil palm farmers SPKS
- *4About KKPA farmers
These are small-scale farmers who deliver oil palm to specified mills based on the Kredit Koperasi Primer Anggota (KKPA; provisionally called the Credit Corporate Prime Agreement in English) agreement, which is a core plantation system based on union financing that started in 1995. In a core plantation system, the plantations of small-scale farmers growing oil palm are placed around a large-scale plantation, which forms the core. The large-scale plantation seeks to expand production while providing small-scale farmers with agricultural materials (saplings, fertilizers, and pesticides), credit, and guidance on cultivation technologies. Usually, the standards used by the large-scale plantation for occupational safety and health are applied to the small-scale farmers. Small-scale farmers have the advantage of being able to secure a sales channel as oil palm harvested by them is purchased by the mill established by the core plantation.
- *5Nine external standards used as references for this survey
•Roundtable on Sustainable Palm Oil (RSPO) Independent Smallholder Standard, 2019
•Roundtable on Sustainable Biomaterials (RSB) Principles and Criteria for Smallholder Groups, 2016
•International Sustainability and Carbon Certification (ISCC) Independent Smallholder Group Certification Criteria, 2016 (ISCC 201-5, 202, 206)
•Malaysian Sustainable Palm Oil Certification (MSPO) Part 2: General Principles for Independent Smallholders, 2013
•Indonesian Sustainable Palm Oil Standard (ISPO), Independent Smallholders (4 out of 7 principles), 2011
•Rainforest Alliance & UTZ/RA Sustainable Agricultural Standard for Smallholders, 2019 (Draft to be published June 2020)
•Fairtrade/Fairtrade Standard for Small-Scale Producer Organisations, 2019
•Tokyo 2020 Olympic and Paralympic Games Sustainable Sourcing Code (3rd edition) issued by the Tokyo Organising Committee of the Olympic and Paralympic Games
•Sourcing Code for the Promotion of Sustainable Palm Oil issued by the Tokyo Organising Committee of the Olympic and Paralympic Games
Palm Oil is Essential for Manufacturing Instant Noodles
Chicken Ramen, the world’s first instant noodles, was launched in August 1958. The base manufacturing technology is an “flash frying method.” The noodles are fried in high-temperature oil to extract moisture. The noodles, which are nearly dried, can be stored for a long period of six months without changing in quality or rotting. In addition, when hot water is poured over the noodles, the hot water seeps into the noodles through a countless number of holes on the noodles, returning them to their original texture. This flash frying method is still being used today as the basic technology for oil-fried instant noodles. Palm oil is mainly used to fry these noodles.
Palm oil, extracted from the pulp of the fruit, is the most widely used vegetable oil worldwide. Palm oil boasts superior storability as it does not easily oxidize. Its high level of safety is one of its advantages. It also tastes well and when used for frying, offers a good texture. Oil palms bear fruit throughout the year, contributing to stable supply. The harvest volume per unit area is also higher than other vegetable oils. Compared to soy bean or rapeseed oil, the harvest volume can be 8-10 times higher. Owing to these features of palm oil, it is an essential ingredient for frying instant noodles.
Procurement State of Other Raw Materials
Paper
NISSIN FOODS Group places priority on using FSC®*1 certified paper, produced from appropriate forestry management, mainly for product containers and packaging, various types of printed matter, cardboard, and as copy paper.
Since September 2020, NISSIN FOOD PRODUCTS has started using FSC®-certified paper for the cardboard cases of some products such as those under the CUP NOODLES brand.
MYOJO FOODS CO., LTD. is promoting the use of FSC®-certified paper and biomass ink made from biological resources. The outer packaging of MYOJO CHUKAZANMAI (bag-type noodles) indicates that FSC®-certified paper is used, and the hot water drainage lid of MYOJO IPPEI-CHAN YOMISE NO YAKISOBA indicates that FSC®-certified paper and biomass ink is being used.
We have also started using FSC®-certified paper for the cardboard cases of instant noodle and soup products being manufactured and sold by MYOJO FOODS for distribution in Japan, and aim to achieve 100% switch within FY2022.
FSC®-certified paper is also used by Nissin Foods GmbH in copier paper for its office and by NISSIN FOODS (HK) MANAGEMENT CO., LTD. in copier paper for its office and plants.
- *Forest Stewardship Council®
Marine Products
The NISSIN FOODS Group aims to procure marine products that are caught in accordance with fishery methods that protect the ecosystem based on systematic marine resources management and give consideration to the human rights of employees. In light of this, the Group is promoting the procurement of MSC*1 and ASC*2 certified marine products. If these certified products cannot be available, products are procured from suppliers that can confirm conditions up to the fishing ground. For example, the Alaskan Pollack, which is used in making fish paste, is all MSC-certified. Meanwhile, squid and shrimp are procured from suppliers that can trace conditions up to the fishing ground.
- *1Marine Stewardship Council
- *2Aquaculture Stewardship Council
Soybeans
The soybeans NISSIN FOOD PRODUCTS procures as a raw material for deep fried tofu are all produced using sustainable methods certified by the U.S. Soybean Export Council (USSEC).
Agricultural products
The green onions and cabbage used as raw materials by NISSIN FOOD PRODUCTS are grown under contract, and a representative of the Resourcing Division of NISSIN FOODS HOLDINGS visits the fields to check cultivation and agricultural chemicals use records.
Animal welfare (livestock)
The NISSIN FOODS Group regularly requests meat suppliers to share the state of animal welfare being implemented. We also comply with proper usage methods of veterinary pharmaceutical drugs, including antibiotics and growth hormones, in line with national standards. Suppliers that deliver chicken extract confirm that the chickens are not neglected in an unsuitable environment (in other words, neglected at night). We do not use genetically-modified or cloned animals as raw materials.
- Approach to Animal Welfare
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The NISSIN FOODS Group takes into consideration the Five Freedoms, the basic principles of animal welfare which are internationally recognized.
- ・Freedom from hunger and thirst
- ・Freedom from fear and distress
- ・Freedom from discomfort
- ・Freedom from pain, injury or disease
- ・Freedom to express normal behavior
The Group is marketing vegetarian products that do not use animal materials and are promoting the use of plant-based meat alternatives.
Development of Low Environmental Impact Plant-Derived Meat Alternatives and Cultured Meat Products
It is said that the livestock industry is the source of about 15% of the world’s greenhouse gases. The methane gas and other gases emitted from livestock excrement and cow burps have an enormous environmental impact, in addition to that of the feed and water necessary for livestock production.
In 2016, the NISSIN FOODS Group developed “soy beef,” made using an original production process with soy protein as the main raw material, and began using it as a product ingredient.
Subsequently, we are promoting the use of “soy meat,” including the development of soy pork and a soy char siu chip.
In March 2019, we were the first in the world to successfully produce bovine muscle tissue in the form of a diced steak (1.0 cm × 0.8 cm × 0.7 cm) using beef-derived muscle cells, created in collaboration with the research group of Professor Shoji Takeuchi of the Institute of Industrial Science, the University of Tokyo.* This is called “cultured meat.” It refers to meat that is derived from cells that undergo tissue cultivation, rather than from the body of an animal.
This research group is also undertaking research to artificially produce three-dimensional muscle tissue, with the goal of achieving cultured steak meat that has the same texture as real meat. By developing these technologies, we believe it will be possible to product larger muscle tissue going forward. This is the first step in the commercialization of cultured steak meat that has the same texture as real meat.
Meanwhile, given that cultured meat is an innovative food product made from an unprecedented method, it is unknown whether it will be accepted by society at large. In light of this, NISSIN FOODS HOLDINGS implemented Japan’s first large-scale awareness survey of attitudes toward cultured meat in 2019 to confirm the level of acceptance of cultured meat by general consumers and to examine what type of information disclosure is needed to improve acceptance. In addition, the company is participating in the Japan Association for Cellular Agriculture, a group of companies and research institutes that discuss problem-solving for the spread of cultured meat, and the Council for Public-Private Partnership in Food Technology , where relevant parties from food companies, ventures, relevant government ministries and agencies, research agencies, and other organizations discuss and provide recommendations toward solving issues in the area of food technology cooperation.
- *A research group that was selected by the Japan Science and Technology Agency (JST) for the Research and Development Program for Future Creation (Search Acceleration Type) to work on “Development of the production technology for next generation-meat using 3D tissue engineering techniques” (R&D representative: Shoji Takeuchi)