Cargill suspends business with IOI following RSPO fallout

By David Burrows

- Last updated on GMT

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

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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.

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