IOI commits to 'best-practice' peatland and deforestation plans

One of the world's biggest palm oil suppliers has committed to address deforestation and exploitation in its supply chain, which had caused major brands to cancel contracts with the firm.

A number of companies, including Unilever, Mars and Nestlé, have cancelled contracts with IOI because of last year’s suspension

A number of companies, including Unilever, Mars and Nestlé, have cancelled contracts with IOI because of last year’s suspension

The IOI Group was suspended by the Roundtable on Sustainable Palm Oil (RSPO) last year, following a year-long investigation into the palm oil producer’s deforestation contributions in West Kalimantan, Indonesia.

A year on from the suspension, the Malaysian-based group has committed to address deforestation and human rights abuses in its supply chain. This has prompted Greenpeace to suspend its active campaign against IOI.

The IOI Group was reinstated by the RSPO in August last year, promising to deliver a “comprehensive plan of remediation”. Since January, the palm oil giant has been monitoring suppliers and has agreed to work with non-profits to remedy social conflicts in Malaysia.

IOI has commissioned a consultant to verify progress on labour issues and last week agreed to independent third-party verification of its progress, scheduled for next year. The new commitments pledge to implement global best-practice peatland management in the Ketapang landscape.

IOI had been embroiled in a legal battle with the RSPO and select green groups over its “unfair” suspension, leading to calls from Greenpeace that IOI was “bullying its critics”. In light of the new commitments, Greenpeace will suspend its campaign, but has called on companies wanting to work with IOI to draw-up contracts that commit to demonstrating progress in line with RSPO policies.

Greenpeace’s head of the Indonesian Forests Campaign Kiki Taufik said: “IOI has come a long way in the past twelve 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.”

A number of companies, including Unilever, Mars and Nestlé, have cancelled contracts with IOI because of last year’s suspension. Former contractors are said to be monitoring IOI’s action before reaching out for new supply contracts.

No palm no foul 

On a broader level, a number of major palm oil plantation companies and brands that use palm oil-based products have come under fire from campaigners for apparent inadequate palm oil policies. Greenpeace claimed that a raft of consumer goods companies were "letting their customers down" by failing to break the link between the use of palm oil in everyday products and deforestation.

Golden Agri-Resources (GAR) - the world’s second largest palm oil company, managing more than 480,000 hectares of plantation – isn’t immune from the situation. Despite completing the mapping and traceability of its supply chain through to each of its 489 mills in Indonesia earlier this year, GAR is engaging with individual supplier mills which have allegedly been using 'tainted and illegal' palm oil sources, in an attempt to clarify revelations uncovered in a recent report.

In fact, Greenpeace has called on GAR and other major palm oil traders to publish plans similar to IOI’s to identify suppliers failing to counteract practices attributing to deforestation.

Matt Mace


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| palm oil | supply chain | traceability | ethics

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