IOI Group Regains its Certification as a Sustainable Palm Oil Producer
by Source Intelligence
on August 8, 2016
Earlier this year, palm oil producer IOI Group had its RSPO (Roundtable on Sustainable Palm Oil) certification suspended after failing to meet RSPO certification standards. The RSPO announced in a statement last Friday that IOI Group will regain its certification starting today (August 8, 2016). The RSPO has found that the IOI Group is now fully compliant with RSPO standards and has plans in place to compensate stakeholders.
Consequences of RSPO Suspension for IOI
After IOI Group’s suspension, many multinational companies such as Unilever, Kellogg, Mars, and Cargill discontinued business with the palm oil producer. IOI Group prepared legal charges against RSPO which were later dropped. Unilever may reconsider its business relationship with IOI Group, and will release a more concrete update in a few days.
The RSPO has emphasized that an expert team will be confirming that the IOI Group is truly implementing its action plan in accordance with RSPO standards. If the team “finds significant failures in the implementation" of IOI’s commitments to RSPO,” the IOI Group could easily face re-suspension.
Palm Oil Supply Chain Transparency Advocates
Many international groups have set standards for sustainable and ethical materials production and sourcing. RSPO’s progress on palm oil is significant; many of its members are globally recognized consumer brands that are fully committed to sourcing sustainable palm oil, and as a result, supply chain transparency. Other global stakeholders have vocalized strong requests for companies to commit to sustainable palm oil, such as the WWF and the Association for Tropical Biology and Conservation. The World Resources Institute also released a palm oil risk mapping tool earlier this year to help companies remove unsustainable producers from their supply chains.
Similarly, other groups such as the IRSG (International Rubber Study Group) have established best practices for the sustainable sourcing and production of rubber; members include international brands, rubber producers, and governments. Tracing materials to the source is now easily accessible for all companies; cloud-based software has enabled unprecedented supply chain communication and data aggregation, forcing producers furthest upstream in the supply chain to be accountable for their social responsibility performance.