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Destructive palm oil company IOI let off the hook too easily by RSPO

Posted by Annisa Rahmawati - 10th August 2016

A major palm oil company, which had its sustainability certificates suspended for violating rules designed to prevent the destruction of Indonesia’s forests and peatlands, has had those certificates reinstated. This shocking decision by the industry’s own sustainability group to lift the suspension sends a message that it’s OK for palm oil companies to continue trashing forests in pursuit of profits.

IOI, one of the biggest palm oil suppliers in the world, was suspended by the Roundtable on Sustainable Palm Oil (RSPO) in April 2016 for clearing peatland areas and developing land without obtaining required permits. As a result, many of its big-name customers walked away such as Unilever, Cargill, Mars, and – after tens of thousands of you emailed its boss – General Mills, maker of Betty Crocker cake mixes.

Yet even though IOI still cannot demonstrate it can produce palm oil in a responsible manner and has not shown how it will restore the forests and peat it has damaged, the RSPO last week announced it was lifting the suspension. This means IOI can once again promote its dirty palm oil as ‘sustainable’.

This has happened because, as far as the RSPO is concerned, IOI has a plan to deal with the specific details of the complaint raised against it, which relate to a couple of its subsidiary companies working in a particular part of Kalimantan. However, these are minor corrections affecting only a small part of IOI’s operations, while the company continues to create problems elsewhere. 

Over the years, IOI has left a trail of devastation across Indonesia. Back in 2008, we revealed how the company had destroyed peatland forests as well as areas of orangutan habitat. More recently, it was clearing areas which its own assessment surveys identified as being of particular value for conservation and carbon storage, contravening its own policies. And just this year, our investigations showed IOI had planted oil palm saplings in areas burnt during last year’s catastrophic fires, despite government instructions to the contrary.

Previous complaints about IOI have been raised in public and with the RSPO and each time IOI has promised to lay out new plans or policies to show how it will become a more responsible palm oil company. Each time it has failed to live up to the promise of substantial change.

The policy IOI published this week in response to the most recent RSPO complaint continues this tradition – it makes no attempt to address the most serious problems IOI faces and lacks a solid plan with clear dates when improvements will be made on the ground. There’s also the question of how IOI will repair the damage done to the peatlands it has drained – the Indonesian government has instructed plantation companies to immediately re-wet peatland areas in an effort to reduce fire outbreaks.

Letting IOI back into the fold so soon is a big mistake. The RSPO is supposed to be preventing its members from destroying forests, but this alarming decision sends the message that even the worst offenders will be let off with little more than a slap on the wrist.

It also highlights just how weak the RSPO’s standards are – many of its members have palm oil policies much stronger than its own, undermining the RSPO’s claims to be pushing the industry towards true sustainability. It also suggests the RSPO is more concerned about giving the all-clear for IOI’s old customers to start buying its palm oil again, rather than forcing it to make any kind of serious reforms.

However, many of IOI’s ex-customers have said they will only start buying again once it has shown it can radically improve its approach to protecting forests and peatlands. A sensible decision, because until IOI proves it’s serious about ending its role in deforestation and peatland drainage, resuming business with this toxic company will be a decidedly risky business.

Annisa Rahmawati is the Forest Campaigner for Greenpeace Indonesia

Article Tagged as: Featured, Indonesia, Palm oil, rspo