IOI Pledges to Clean Up Supply Chain One Year after RSPO Suspension

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Image Credit: WWF

A year after being suspended from the Roundtable on Sustainable Palm Oil (RSPO) and dropped by companies such as Unilever, Mars, Incorporated, Nestlé and Kellogg for clearing peatlands in Kalimantan, Indonesia, Malaysian palm oil producer IOI Group announced plans to eliminate deforestation and exploitation throughout its supply chain. In response, Greenpeace has suspended its active campaign to give IOI time to show it is serious about reform.

If properly implemented, the commitment could play a crucial role in the overhauling of the palm oil industry, which is currently plagued by human rights abuses and destructive environmental practices that threaten the health of rainforests and peatlands.

“IOI has come a long way in the past 12 months and has now started taking meaningful action to eliminate forest destruction and human rights abuses from its supply chain. Greenpeace will be watching closely to make sure IOI follows through. There is still a lot of work to be done to clean up the palm oil industry and we expect other traders to respond with action plans of their own,” said Kiki Taufik, Global Head of Greenpeace’s Indonesian Forests Campaign.

The organization is urging companies planning to resume trade with IOI to preemptively specify in contracts that the palm oil producer must demonstrate ongoing progress in line with its Sustainable Palm Oil Policy — which it launched in August 2016 alongside a comprehensive Sustainability Implementation Plan — as well as the company’s latest commitments.

IOI began closely monitoring its palm oil suppliers to ensure compliance earlier this year and has now agreed to work with NGOs to address social conflict between the communities of Long Teran Kanan and the IOI-Pelita joint venture in Sarawak, Malaysia.

Other areas IOI has improved on over the last nine months also include:

  • Commissioning external consultants Business for Social Responsibility to verify IOI’s progress and to assess and recommend solutions to any labor issues in its Sabah plantations;
  • Committing to commission an independent verification of the implementation of its Sustainable Palm Oil Policy in the second quarter of 2018;
  • Analyzing the exposure of its supply base to peatland and committing to minimize and mitigate the impact of third-party suppliers on peatlands;
  • Addressing the labor issues highlighted by Finnwatch in its Peninsular Malaysia plantations, including the ending of recruitment fees.

“Consumers have had enough of the palm oil industry failing to deliver. Companies cannot keep ignoring forest destruction and human rights abuses. The only way to clean up the industry is for other palm oil traders to follow IOI’s lead and start cutting off suppliers that destroy rainforests or abuse workers,” said Taufik.

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