RSPO re-certifies IOI Group after initial suspension

Palm oil giant IOI has had its sustainability credentials re-certified by the Roundtable on Sustainable Palm Oil (RSPO) following its suspension by the certification body earlier in the year.

The announcement, made late last week, has been labelled as “risky and counter-productive” by Greenpeace, which is questioning how genuine the IOI Group’s promises are to resolve sourcing issues.

In April, IOI Group – a property development business that has a large focus on the cultivation and processing of palm oil – was suspended by the RSPO after a year-long investigation revealed that the Group was contributing to deforestation in West Kalimantan, Indonesia.

Commenting on the initial suspension, the RSPO complaints panel said its main objective was to “ensure that IOI not only put forward a comprehensive plan of remediation, but also implements the plan at the earliest possible opportunity, to enable the suspension to be lifted”.

As a result of the suspension, various companies including consumer goods firms Unilever and Mars decided to halt further dealings with IOI, cancelling all supply contracts with the Group.

Broken promises

But on Friday (5 August), the RSPO reinstated the IOI Group with its certification starting today (8 August) based upon the actions taken since its suspension.

In a statement about the recertification, the RSPO said: “The CP [complaints panel] is satisfied that IOI has met the conditions set out in its letter to IOI dated 14 March 2016, based on the actions that IOI has taken and implemented since then.”

However, the decision has been condemned by Greenpeace, which has previously produced reports about how IOI’s operations have led to the destruction of forests and peatlands in Borneo, despite repeated promises to protect these areas.

The Indonesian forest campaigner for Greenpeace Annisa Rahmawati said: “Re-certifying the IOI group on the basis of unreliable promises, without waiting for verified action on the ground is risky and counter-productive. It sends the message that the RSPO is more concerned about helping a founding member regain its customers than ensuring its standards are upheld.

“When IOI lost its RSPO certification, dozens of companies took their business elsewhere. The RSPO’s hasty about-turn doesn’t make IOI any less toxic. IOI hasn’t restored the forests it destroyed nor resolved its social conflicts with communities in Malaysia. Its drainage operations still pose a serious fire risk for peatlands both inside its concessions and in the adjoining landscape.

“The RSPO has proved too weak to stick by its sustainability mandate. Buyer companies should not make the same terrible mistake, but instead hold out for verified action from this industry laggard before resuming trade.”

Supply contracts

A statement about RSPO certification on IOI’s website reads: “IOI Group integrates sustainability into every aspect of its operations through its commitment to produce in an environmentally sound and sustainable manner. As a founding member of the RSPO, the Group has been playing an active role in promoting sustainable practices since its inception in 2004.

“The Group also advocates sustainable agricultural practices in its estates to bring growth and use of certified sustainable palm oil CSPO to the world market. To date, all of its palm oil mills and estates in Malaysia (except mills and estates of its newly-acquired entity Unico-Desa Plantation Berhad) have successfully attained the RSPO certification.”

It is not yet known whether companies in IOI’s supply chain will re-establish contracts with the firm. A spokesperson for Unilever, which cut ties with IOI immediately after its RSPO suspension, told edie: “Unilever is looking into the decision taken by the RSPO and based on this assessment will decide on the right approach and next steps.

“We will be able to communicate further on this matter in the next few days.”

 Alex Baldwin

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