In what is arguably the Roundtable on Sustainable Palm Oil’s (RSPO) most significant intervention in its 12-year history, the organisation has suspended the certification of one of its founding members, IOI, a Malaysian palm oil company which supplies palm oil to more than 300 companies. This means that IOI and its trading division IOI Loders Croklaan will be temporarily prevented from selling palm oil it produces post suspension as certified sustainable.

Greenpeace first documented IOI’s alleged destruction of orangutan habitat and peatland forest in our 2008 report Burning up Borneo. Since then, IOI has been in the spotlight over accusations of deforestation, including repeated outbreaks of fires in and around its concessions last year.

It also faced allegations in 2014 from Finnish NGO Finnwatch of serious labour issues on its Malaysian plantations, including confiscating workers’ passports, providing contracts in a language workers could not understand, restricting freedom of association and paying salaries below the minimum wage. An RSPO statement in April 2015 recognised Finnwatch’s concerns were “legitimate”, while IOI said it had “taken measures to improve the working conditions on its estates” in response to the allegations.

In March 2015, sustainability consultants Aidenvironment submitted a formal complaint to RSPO alleging deforestation in IOI concessions in Ketapang, West Kalimantan. Even as that complaint was being investigated by the RSPO, Aidenvironment alleges new drainage canals appeared in one of the IOI concessions under investigation – seemingly violating the company’s commitment to protect peatlands.



After several false starts – including IOI publishing two action plans that failed to translate into real change on the ground – on 1 April, the RSPO suspended the certification of the entire IOI Group, including its trading arm, IOI Loders Croklaan.



Although initially deeming all but one of the complaints made against it to be “unproven and unsubstantiated”, IOI now says it has taken “corrective actions to review and enhance its sustainability practices”. It says it has made improvements and is committed to a comprehensive action plan.

Following news of the suspension, Unilever – also a founder of the RSPO and one of the world’s largest end users of palm oil – moved quickly to cancel its contracts with IOI. Kellogg, Mars, Hershey’s, Kellogg’s, Colgate-Palmolive, Johnson & Johnson, Procter & Gamble, SC Johnson, Yum Brands and Nestlé have also announced they would cease to source from IOI.

The question people will be asking over the coming weeks is: what does IOI need to do to repair its reputation and regain the customers it is losing?

So far, IOI appears to have shown little sign that it understands the seriousness of the situation. It has appealed against part of its suspension and offered another weak action plan that seems unable to address its impacts.

IOI should get in line with the vision of Joko Widodo, president of Indonesia, who has ordered peatlands to be protected before another forest fires crisis breaks out. That means introducing an immediate moratorium on all plantation development across its supply chain, before moving quickly to protect and restore the forest and peatland landscapes it has damaged.

Best practice for peatland forest protection is already being pioneered by players within Indonesia’s pulp sector. Adopting this approach would start with a comprehensive assessment of how IOI’s plantations have already affected the wider landscape and re-wetting and restoring peatlands. Companies should hold out for transformative action on this scale before resuming purchases from IOI.



Plantations make up a small proportion of IOI’s business, but strong action would have a huge, positive impact for Indonesia and the global climate. That makes this a small price to pay to reduce the risk of forest fires in a region that suffers disproportionately from fires and toxic haze.

