- In March, IOI lost its sustainability certification from the world’s largest association for ethical palm oil production over allegations of environmental destruction in its Indonesian operations.
- Since then, a number of IOI’s customers have moved to disengage with the supplier.
- Among Bunge’s demands is for IOI to issue a more detailed sourcing policy.
The global agribusiness Bunge is the latest palm oil user to sanction IOI Group, the Malaysian producer that lost its Roundtable on Sustainable Palm Oil (RSPO) certification in March over environmental destruction in Indonesia.
Bunge said on Sunday it would not enter into any new purchase contracts with IOI or its affiliates until the Kuala Lumpur-based plantations giant took a number of steps to clean up its operations. IOI is alleged to have cleared rainforest in the Indonesian part of Borneo island without a permit, damaged carbon-rich deep peatlands there and used fire to clear land for planting, all of which is illegal in Indonesia.
Bunge wants IOI, which has promised to stop deforesting, to adopt the accepted working definition for what a “high carbon stock” forest is, launch a public dashboard through which customers and the public can easily access critical information, and address the grievances that have been lodged against it.
The U.S.-headquartered food company also asked IOI to issue an a more detailed sourcing policy with clear deliverables and timelines. While many of the biggest palm oil producers have publicly committed to eliminate deforestation, peatlands conversion and human rights abuses from their supply chains, the pledges are often vague, and no major firm can show it has actually achieved its goal. IOI is no exception.
“We will continue to engage with IOI to provide input, assess progress and discuss broader issues related to sustainable sourcing and Bunge’s requirements and plans,” Bunge said in a statement.
Unilever, Hershey’s, Colgate-Palmolive, Johnson & Johnson, Procter & Gamble, SC Johnson, Yum! Brands and Reckitt Benckiser are some of the palm oil buyers that have already moved to disengage with IOI. Some are cutting it off immediately, others are phasing out existing supplies and others are suspending any future purchases.