PepsiCo’s Corporate Problems

Despite notable advances in human rights and environmental protection in recent years, several corporate organizations are also involved in breaching these rights by unethical activities. According to Guiso, Sapienza, and Zingales (68), this problem is exacerbated by a corporate society that prioritizes wealth above people and the environment. Furthermore, the growth of the global economy through the free trade market has made it impossible to keep multinational firms accountable for their poor practices. According to Klein (243), new organizations are working harder to cover up human and environmental violations rather than combating them. As one of America’s most globally recognized brands, PepsiCo is expected to lead in the positive end in advocating for and practicing habits that protect the rights of employees, citizens as well as the safety of environment. However, recent investigations suggest that their corporate programs do more harm than good. For these reasons, projects that have been involved in violations should be discontinued until they are cleared of all the wrong doings.

Over the last two decades, PepsiCo and its subsidiary companies have been accused of harming both humans and environment. They have been involved in malpractices such as worker rights violations, harming local communities, destroying rainforests, destruction of lands, and environmental destruction through massive greenhouse gas emissions as a result of draining and burning of peat lands for production of palm oil (Global Exchange; Sandle)

In the year 2015, PepsiCo was accused by International Union of Food workers (IUF) following their anti-trade union practices in their factories. It is alleged that during the year 2013, the soft drink and snack foods manufacturer blocked the workers from forming a trade union (Global Exchange, Top Ten Corporate Criminal List). The IUF also reported that many workers were unfairly dismissed following their rightful attempt to register their trade union. The accusation raised the attention of the U.S. government’s National Contact Point for the OECD Guidelines for Multinational Enterprises which set up a meeting with the stakeholders but nothing concrete was agreed upon. The matter also led to LabourStart organization forming a petition aimed at ensuring accountability by the PepsiCo through their supplier; Radhakrishna Foodland Pvt. Ltd who were directly involved in the violation (Global Exchange, Top Ten Corporate Criminal List; Digital Journal).

In 2016, one of the PepsiCo supplier; Indofood was accused of labour violations in Indonesia. According to Sandle, the company is accused of child labour, worker exploitation and unethically low wages in two of their palm oil plantations that are operated by PT PP London Sumatra which is a subsidiary of Indofood. The supplier is directly linked with PepsiCo through a joint venture which makes them a sole manufacturer of their products in Indonesia. This has attracted efforts of the US based non-profit Rainforest Action Network (RAN), OPPUK, an Indonesian labor rights advocacy organization as well as International Labor Rights Forum (ILRF) who investigated the matter and concluded that there were series of labour violations involved.

The PepsiCo Food Company is also accused of a series of violations in their supply chain which have a significant effect on the environment. According to Russell, Dale and Heather (759), reports by organizations such as Rainforest Action Network indicate that masses of rainforests and lands have been destroyed by PepsiCo across the globe to give room for their palm oil production. These have serious implications on the environment both in terms of loss of vegetation as well as their impact through emission of greenhouse gases that arise during land preparation and production.

Greenpeace lobby group have signed a petition to ensure that PepsiCo is held accountable through their subsidiary companies and suppliers and they are demanding compensations for damage. This echoes well with the suggestions by Klein (249) and Russell, Dale & Heather (764) that the fear of action being taken against them will compel such organizations to adopt safe practices and policies in their operations.

In by and large, various investigations have linked PepsiCo with malpractices that have caused harm to humans and environment. The authorities are aware of these but action is yet to be taken. Meanwhile, lobby organizations such as Rainforest Action Network have encouraged consumers to exercise their power by using their purchasing power to endorse fair trade and appropriate practices. Boycotting the products of the companies involved in these malpractices will pressure them to put people and environment ahead of their pursuit of profits. To avoid further damage, the relevant authorities should also act fast in discontinuing the mentioned projects. Effective and wise management of these projects will ensure that they adhere to safe practices that do not harm both humans and environment in future.

Works Cited

Global Exchange. ‘Top Ten Corporate Criminal List.” Available at www.globalexchange.org/corporateHRviolators#Pepsi. Accessed 13th Feb, 2017.

Guiso, Luigi, Paola Sapienza, and Luigi Zingales. “The value of corporate culture.” Journal of Financial Economics 117.1 (2015): 60-76. Print

Klein, Naomi. “The Swoosh”. Full Text of ”Naomi Klein-No Logo.“ Archive, archive.org/stream/fp_Naomi_Klein-No_Logo/Naomi_Klein-No_Logo_djvu.txt. Accessed 13 Feb. 2017.

Russell, Cristel Antonia, Dale W. Russell, and Heather Honea. ”Corporate Social Responsibility Failures: How do Consumers Respond to Corporate Violations of Implied Social Contracts?.“ Journal of Business Ethics 136.4 (2016): 759-773. Print

Sandle, Tim. ”PepsiCo Accused of Human Rights Violations.“ Digital Journal, 5 May 2016, www.digitaljournal.com/business/business/pepsico-accused-of-human-rights-violations/article/464682. Accessed 13 Feb. 2017.