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THURSDAY, JULY 21, 2016
THE BLOG OF THE RAINFOREST ACTION NETWORK

RSPO’s Credibility On The Line: Will It Maintain Its Suspension of Industry Laggard IOI Group?

Yesterday, news broke of a pending decision by the RSPO Complaints Panel to lift the suspension of IOI Group’s certification under the Roundtable on Sustainable Palm Oil certification system. If successful this move would do irreparable harm to the RSPO’s credibility.

A coalition of NGOs has rapidly issued an appeal, urging the RSPO to maintain its suspension of IOI Group stating that it is far too premature to lift the suspension given that the company has not come into full compliance with the RSPO Certification Systems nor resolved outstanding complaints. There are fears that any change at this stage would seriously hinder the resolution process between the complainant and the company.

Evidence of the IOI Group’s deforestation, social issues and exploitative labour practices has been in the public domain for at least eight years. Nonetheless, it took two formal complaints and numerous civil society reports for the RSPO’s Complaint Panel to finally uphold the requirements of the RSPO and suspend IOI for clearing forests, draining peatlands, operating without proper licenses, and failing to prevent fires in its PT Bumi Sawit Sejahtera (PT BSS), PT Sukses Karya Sawit and PT Berkat Nabati Sawit concessions in West Kalimantan, Indonesia. RSPO must now demonstrate that its complaints and enforcement mechanisms are robust and effective by maintaining the suspension until such time that IOI Group has come into compliance with the RSPO Certification Systems article 4.2.4 and has taken significant action to resolve other issues of non-compliance.

The RSPO must take into account IOI’s failure to respect the customary rights of the Long Teran Kanan (LTK) communities in Sarawak, East Malaysia. This complaint and grievance has not been resolved to the satisfaction of the community for nearly 6 years. RSPO must maintain IOI’s suspension until it has successfully concluded this dispute with the LTK community by recognizing their rights to their customary lands, determined through community mapping, and re-negotiating the company’s access and use of these lands subject to the Free, Prior and Informed Consent of the LTK and neighboring communities. It is also critical that IOI takes corrective actions, including steps to restore areas of peatlands that it has degraded or burnt, including areas inside IOI’s concessions which have recently been identified as “priority restoration” by the Indonesian Peatland Restoration Agency (BRG).

In May, over two dozen civil society groups issued a letter to palm oil buyers outlining the corrective measures that IOI must take to get back on the path to being reconsidered as a supplier. This letter and RSPO’s suspension sent a signal to the marketplace that led over two dozen companies, many of which are RSPO members, to suspending purchases from IOI including Snack Food 20 companies such as Unilever, Mars, Hershey’s, Mondelez, General Mills, and most recently the global palm oil traders Bunge and Cargill.

In response to this market pressure, IOI Group has started to take the need to strengthen its sustainability policies and practices more seriously. But there is still a huge amount of work to be done. The IOI Group has yet to publish a credible time-bound policy or execute measures to end the exploitation of workers and local communities and the destruction of forests and peatlands in its supply chain.

Time will tell if the RSPO settles for half measures or if it protects its credibility by maintaining its suspension of IOI Group. Rainforest Action Network and a growing global coalition of civil society groups will continue to hold both IOI Group and the RSPO to account for the impacts of IOI’s operations across Malaysia and Indonesia.

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