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Malaysia's IOI pledges reforms to safeguard sustainable supply chain
April 28, 2017 / 3:34 AM / 8 months ago

Malaysia's IOI pledges reforms to safeguard sustainable supply chain

KUALA LUMPUR, April 28 (Reuters) - Malaysian palm oil giant IOI Group said on Friday it would improve peatland management and resolve labour issues in a move that comes after it lost major customers last year when its sustainability certification was briefly suspended.

IOI said in a statement it would also ensure third-party suppliers comply with its sustainable standards, and would commission an independent verification of its sustainable policies in the second quarter of 2018. Palm oil is the most widely used edible oil in the world, featuring in products from cooking oil and margarine to cosmetics and soap.

In April last year the Roundtable on Sustainable Palm Oil (RSPO) suspended IOI’s certificates for allegedly violating sustainable policies at concessions in Indonesia. Though its certificates were reinstated four months later, leading global buyers including food giants Nestle, Kellogg and Hersheys held off resuming business ties with IOI.

“IOI stands firmly committed to the implementation of its sustainability policies and believes that its progress in key areas...sends a strong signal to stakeholders around its desire for continued improvement,” the company said on Friday.

Plantations in Indonesia and Malaysia, which produce about 85 percent of global supply, have come under scrutiny from activists and consumer companies in recent years, particularly over the clearing of millions of hectares of forest.

IOI first came under fire in 2015 when Amsterdam-based green group Aidenvironment filed a complaint to the RSPO claiming that the plantation company illegally chopped down rainforests in Indonesia and planted palm crops on peatland.

Reporting by Emily Chow; Editing by Kenneth Maxwell

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