Roundtable on Sustainable Palm Oil suspends IOI Group

by Jeff Gelski
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Complaints against the IOI group included such points as no new planting procedures published, land clearing, fraudulent statements, no concession boundary filed and deep peat clearance.

KUALA LUMPUR, MALAYSIA — The Roundtable on Sustainable Palm Oil has suspended the R.S.P.O. certificates of the IOI Group effective April 1. The action may lead to a disruption in the supply of certified sustainable palm oil, according to the R.S.P.O.

IOI Loders Croklaan, which has a North American office in Channahon, Ill., said beginning April 4 products made in its refineries no longer will carry the label of certified sustainable palm oil.

“We understand that this will impact our customers’ own sustainability commitments, and we sincerely regret the disruptions that this may cause,” IOI Loders Croklaan, a producer of oils and fats and part of the IOI Group, said. “We will continue our efforts to serve our customers in jointly finding solutions to minimize disruptions to their supply chain. These solutions will take into account the instructions we have received from R.S.P.O.”

Beginning April 4, IOI Loders Croklaan products made in its refineries no longer will carry the label of certified sustainable palm oil..

The suspension relates to three IOI Group subsidiaries: PT Sukses Karya Sawit (PT SKS), PT Berkat Nabati Sawit (PT BNS) and PT Bumi Sawit Sejahtera (PT BSS). Complaints against the three subsidiaries included such points as no new planting procedures published, land clearing, fraudulent statements, no concession boundary filed and deep peat clearance.

The R.S.P.O., a not-for-profit group, unites stakeholders in the palm oil industry and develops and implements global standards for sustainable palm oil, which include environmental and social criteria.

Dato’ Lee Yeow Chor, group c.e.o. of the IOI Group

“IOI, as one of the founding members of R.S.P.O., has participated in the drafting of the R.S.P.O. principles and criteria and is fully committed to upholding all the R.S.P.O. certifications and processes,” said Dato’ Lee Yeow Chor, group chief executive officer of the IOI Group. “We place great emphasis and value the importance of sustainability in our business practices.”

He said the R.S.P.O. received a complaint about the IOI Group about a year ago. The company has taken corrective actions to review and enhance its sustainability practices since then.

“These include rehabilitating affected areas, improving our firefighting capabilities and engaging consultants to advise on all relevant Indonesian laws and regulations, which are the subject matters of the complaint,” Mr. Yeow Chor said.

He said the IOI Group received a letter from the R.S.P.O. dated March 14 of this year. The company then submitted a plan on March 23.

“We will actively work with the complainant to jointly verify the issues and to engage another licensed H.C.V. (high conservation value) assessor from the H.C.V. resource network to conduct an additional peer review of our H.C.V. assessments report,” Mr. Yeow Chor said.

The R.S.P.O. said its board of governors on March 25 endorsed a complaints panel’s decision to suspend the certification of the IOI Group.

“The R.S.P.O. is hopeful that the IOI Group will be able to find a solution to address the infringements flagged by the complaint and looks forward to continuing its dialogue with IOI,” the R.S.P.O. said. “Since officially receiving the information of their certificates suspension, IOI Group has submitted a corrective action plan to the complaints panel. Sanctions will only be lifted with the approval of the panel.”

The suspension comes while such companies as ConAgra Foods, Inc., Dunkin’ Brands Group, Inc., General Mills, Inc., The Kellogg Co., Mars, Inc., PepsiCo, Inc., Starbucks Coffee Co. and Wal-Mart Stores, Inc. have shown interest in selling products made with certified sustainable palm oil. The R.S.P.O. said it has certified about 21% of the global production of palm oil.
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