Major buyer Cargill suspends ties with IOI Group

More than two dozen consumer goods giants have already moved to cut off IOI, phase out existing supplies or suspend future purchases.

KUALA LUMPUR: As part of its commitment to end deforestation, peat lands conversion and human rights abuses from its vast supply network, Cargill has suspended ties with IOI Group.

This follows IOI having had its certification suspended by the Roundtable on Sustainable Palm Oil (RSPO), over alleged environmental destruction in Indonesia.

Before Cargill’s announcement on Monday, more than two dozen consumer goods giants had already moved to cut off IOI, phase out existing supplies or suspend future purchases.

“IOI Group has yet to deliver a responsible sourcing policy or a detailed sustainability implementation plan to meet our requirements,” said Cargill in a statement. “Cargill will suspend business by not entering into any new purchase contracts until IOI Group can meet our requirements and comply with our sustainable palm oil policy. ”

Cargill set a July 15 deadline in late June for IOI to come up with a new sourcing policy and sustainability plan or risk not having any new agreements with it.

“Cargill gave IOI every opportunity to reform. It failed to meet expectations. The market has spoken. IOI is not a source of responsibly produced palm oil,” added Deborah Lapidus, campaign director at the Center for International Policy.

“IOI can’t just issue another paper commitment and wipe its hands clean of its many violations.”

IOI has serious work to do to implement a moratorium on new forest and peat clearing, and demonstrate verified progress on the ground, she cautioned. “It must make up for past damage to ecosystems and communities.”