Unilever cancels contract with palm oil supplier after it breaches deforestation policy

By Andrew MCDOUGALL contact

- Last updated on GMT

Unilever cancels contract with palm oil supplier after it breaches deforestation policy

Related tags: Sustainable palm oil, Palm oil

The Anglo-Dutch consumer goods giant has cancelled its contract with palm oil supplier IOI Group after the Roundtable on Sustainable Palm Oil (RSPO) suspended its certification following complaints of deforestation and community conflict, which Unilever says breaches its policy.

Unilever uses palm oil, palm kernel oil and its derivatives in a number of personal care and food products, and says it takes the allegations very seriously.

In a statement released by the Dove skin care maker following the announcement, it says: “Unilever takes the allegations against IOI and its suspension from the RSPO extremely seriously. We expect the highest standards from all of our suppliers and strict adherence to the Unilever Sustainable Palm Oil Policy (March 2016).”

“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.”

At the same time, Unilever also says it is reaching out to IOI and to relevant NGOs and stakeholders to work together to determine a way forward for the Malaysian supplier to address and remediate the proven complaints.

The manufacturer says IOI needs to “demonstrate its commitment to fundamentally and transparently change the way it drives sustainable palm oil development to meet the highest social and environmental standards. We believe that this is a critical step in leading industry transformation.”

Complaint

IOI has responded to the situation too, stating it is actively engaging with the RSPO with regards to its suspension of the certification, adding that the sales losses due to this are not quantifiable, and that it is very concerned of the impact this may have.

The situation all arose at the start of the month when the RSPO informed its members that there may be a disruption in the supply of Certified Sustainable Palm Oil (CSPO) due to the suspension of the RSPO certification of the IOI Group.

The suspension follows a decision taken by the Complaints Panel on 14 March and endorsed by the RSPO Board of Governors on 25 March 2016 in relation to the complaint against PT Sukses Karya Sawit, PT Berkat Nabati Sawit, PT Bumi Sawit Sejahtera, all subsidiaries of the IOI Group.

The RSPO Complaints Panel decided to provide further guidance to provide clarity so as to avoid unintended negative impacts related to the IOI Group Certification suspension.

The complaint filed by Aidenvironment​ has been the subject of an extensive exchange between the RSPO Complaint Panel, the IOI Group and the complainant, at the end of which the Complaint Panel found IOI to be in breach of Principle no. 2 and  7 of the RSPO Principles and Criteria.

The RSPO says it is hopeful that the IOI Group will be able to find a solution to address the infringements flagged by the complaint and looks forward to continuing its dialogue with IOI.

Since officially receiving the information of the certificates suspension, IOI group has submitted a corrective action plan to the Complaints Panel. Sanctions will only be lifted with the approval of the Panel.

Related topics: Business & Financial

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