Cargill suspends business with IOI following RSPO fallout

Since bring accused of illegally deforesting land to make way for its palm oil plantations, IOI has lost 27 customers. Photo: iStock / Mihtiander

Cargill has suspended new business with IOI and called on the palm oil supplier to “take further action to resolve the charges that resulted in its RSPO suspension and address longstanding environmental and social grievances”. 

The agricultural commodities giant said IOI has “yet to deliver a responsible sourcing policy or a detailed sustainability implementation plan to meet our requirements”. 

IOI was suspended from the Roundtable on Sustainable Palm Oil (RSPO) in April. This followed a year-long investigation into how the firm had allegedly been responsible for clearing forests, draining peatlands, operating without proper licenses and failing to prevent fires in its concessions in West Kalimantan, Indonesia. 

These activities were also said to be in breach of many of its customers’ no deforestation, no peat and no exploitation policies. 

To date, 27 firms have either dropped IOI as a supplier or won’t use the company in the future, according to a list compiled by public affairs firm Waxman Strategies. 

IOI said it would not comment on actions taken by individual customers 

However, a statement issued by the group’s head of sustainability, Surina Ismail, this week, suggested the Roundtable’s complaint panel has “deliberated” IOI’s application to have the suspension lifted. 

That was three weeks ago, but so far there has been no official reply or substantive information from RSPO about the status of that application, Ismail claimed. 

We hope that a favourable decision or a substantive reply can be given by RSPO soon.” 

A spokesperson for the RSPO said she could not comment on IOI’s application. 

She explained: The complaints panel meets monthly and as soon as there is something to report – we will share it.” 

New policy

IOI also confirmed that its revised sustainable palm oil policy will be finalised within the next two weeks. The plan will include “clear actions and timelines”.

IOI is already under intense scrutiny from NGOs such as Greenpeace. 

Deborah Lapidus, campaigns director with the US think-tank Centre for International Policy pointed to IOI’s share price, which dropped by 15% since its suspension.

She says IOI “has serious work to do" to rectify the alleged issues with new forest and peat clearing, and "demonstrate verified progress on the ground".

In May, IOI announced it was planning to sue the RSPO, but quickly dropped the legal challenge amid criticism from major customers and campaigners.

Related News

Since bring accused of illegally deforesting land to make way for its palm oil plantations, IOI has lost 27 customers. Photo: iStock / Mihtiander

Cargill suspends business with IOI following RSPO fallout

IOI saw its RSPO membership suspended following allegations of illegal deforestation. ©iStock

RSPO lifts IOI's suspension

Yesterday (August 8), the RSPO lifted the suspension imposed on the Malaysian palm oil supplier back on April 1. ©iStock

IOI starts long journey to win back major customers

Cargill looks to significantly increase the volume of sustainably sourced cocoa beans by 2018.  Photo: Cargill

Our own cocoa buying company in Ghana cuts out middlemen to benefit farmers, says Cargill

Mondelēz International is thought to be the first company to have publicly urged IOI to drop its legal action against the RSPO. (© iStock.com/mihtiander)

EXCLUSIVE: Mondelēz urges IOI Group not to sue RSPO

Nestlé, Mars, Unilever and Kellogg have ditched palm oil producer IOI following acts of deforestation. © iStock

Major brands dump palm oil supplier IOI following RSPO suspension

IOI has announced it will not only drop the court case against RSPO but has pledged to sign up to RSPO Next, the certification body's strictest policy. © iStock

IOI drops legal action against RSPO

Since bring accused of illegally deforesting land to make way for its palm oil plantations, IOI has lost 27 customers. Photo: iStock / Mihtiander

Cargill suspends business with IOI following RSPO fallout

Greenpeace has alleged further palm oil supply chain abuse. IOI says it is putting its house in order. ©iStock

IOI damage raises questions about RSPO standards

Nestlé has said IOI's action plan on palm oil and deforestation does not go far enough, and will phase out all contracts with the Malaysian-based supplier by the end of August. © iStock

Nestlé to cut all ties with IOI over palm oil action plan: 'It doesn’t go far enough'

According to the new rules, members must not imply the removal of palm oil from a product is socially or environmentally preferable than using RSPO certified sustainable palm oil. © iStock

RSPO to crack down on ‘palm oil free’ labels

RSPO: launched an improved traceability system at last month’s EU roundtable event

Figures show sustainable palm oil boost

Comments (1)

shan nathan - 26 Jul 2016 | 08:27

RSPO

Loaders

26-Jul-2016 at 08:27 GMT

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.