Unilever drops palm oil supplier over deforestation link

Malaysian palm oil trader is suspended following complaints

Unilever has suspended all contracts with one of its palm oil suppliers over claims of deforestation. The company dropped IOI Group after it was suspended by the Roundtable on Sustainable Palm Oil (RSPO) last week. Mars and Kellogg’s have also dropped the supplier.

RSPO suspended IOI Group's certification following a complaint concerning land clearing and deep peat clearance. In a statement, it said: "The RSPO is hopeful that the IOI Group will be able to find a solution to address the infringements flagged." IOI Group is one of the founding members of RSPO and today supplies more than 300 companies with palm oil.

In an official statement, Unilever said: “This suspension puts IOI in breach of our policy. In line with our grievance procedure, we are now in the process of disengaging with the supplier and have set a time bound plan to do this over the next three months.”

Unilever has committed to sourcing palm oil solely from regions with climate and forestry initiatives and have publicly pledged to source 100% of its packaging materials from sustainable sources.

IOI Group has denied all wrongdoing and has said that it will appeal the decision. In a statement, it said that its suspension was “a very serious matter” and that it was “fully committed” to upholding all the RSPO Certifications”. It said: “We place great emphasis on the importance of sustainability in our business practices and also as a corporate core value, which is embedded in our Vision IOI as expounded by our founder and early pioneers of our company twenty years ago.”

IOI Group said that it would be working with RSPO on verifying the issues raised. It also stated that it had already worked to improve a number of areas.

Unilever also said that it was “reaching out” to IOI in the hope of helping the supplier “remediate the proven complaints and demonstrate its commitment to fundamentally and transparently change the way it drives sustainable palm oil development”. The brand said: “We believe that this is a critical step in leading industry transformation”.

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