The Malaysian company has pledged it will not indulge in deforesting, planting on peat or land grabbing.
KUALA LUMPUR: Leading palm oil user Cargill has issued an ultimatum to its supplier IOI Group after the Malaysian producer lost its Roundtable on Sustainable Palm Oil (RSPO) certification over environmental destruction in Indonesia.
Mongobay reported that the US multinational said last week that unless IOI came out with a plan to clean up its operations, it would not enter into any new purchase agreements with the company.
IOI is alleged to have cleared rainforest in Borneo without a permit, damaged deep peatlands and used fire to clear land, all in violation of roundtable standards. Both companies are members of the RSPO, the world’s largest association for ethical palm oil production.
Cargill, in a statement, has detailed some of the measures it wants IOI to take. This includes implementing a programme to monitor and verify the implementation of its policy across all levels of its organisation.
Cargill also wants IOI to establish a formal public grievance process by September 15. IOI must launch a grievance process that acknowledges existing concerns and allegations and outlines clear actions and timelines to address retroactive and future grievances.
It said: “If IOI fails to meet the commitments by the dates outlined then Cargill will suspend business by not entering into any new purchase contracts.”
IOI has already said it is committed to refrain from deforesting, planting on peat and land grabbing.
A Cargill spokesperson did not reply when asked by Mongabay to clarify how the company’s ultimatum differed from what IOI had already committed to do.
The ultimatum from Cargill was, therefore, “disappointing and essentially meaningless,” said Deborah Lapidus, campaign director at Waxman Strategies.
“What we need from IOI is action,” she told Mongabay.
Other multinational palm oil users are cutting back supplies from IOI.
Greenpeace said that if IOI failed to meet Cargill’s requests, the company should phase out existing purchase agreements, not just say no to new contracts.