IOI issues detailed response to Greenpeace report on deforestation

PETALING JAYA: IOI Corp Bhd yesterday issued a detailed response to the Greenpeace report that linked the group’s third-party supplier in Indonesia to deforestation, forest fires and human rights abuses.

In response to the Greenpeace report, IOI CEO Datuk Lee Yeow Chor said the group does not source directly or has any commercial relationship with Korindo Group, Austindo Nusantara, Goodhope, Eagle High and Indofood/Salim – who are named in the Greenpeace report – but oil from these companies enters its supply chain via shipments from its direct suppliers, who are Wilmar, Golden Agri Resources (GAR), AAA Oils & Fats and Musim Mas.

“We have requested an update from our direct suppliers, although they have also reported several of the allegations on their grievance lists. We support our direct suppliers Wilmar, GAR, AAA and Musim Mas’s move to further engage with or to stop purchasing from the named companies,” he added.

Lee said IOI has requested its direct suppliers to provide further detailed updates of their findings with regard to Greenpeace’s allegations by the end of November.

However, he said IOI will suspend contracts with the suppliers only as a last resort when all attempts at engagement fail or when no demonstrable progress has been made.

Greenpeace is a non-governmental organisation that focuses its campaigning on worldwide issues such as climate change, deforestation and overfishing.

Worth noting is that local company TH Plantations Bhd is also on Greenpeace’s list.

On that, Lee said IOI has decided to phase out TH Plantations from its supply chain as it did not receive any positive response from TH Plantations following on-site mill and supply vase verification on several occasions.

“Nevertheless, IOI will continue to engage with TH Plantations to push for a verification visit and address the issues raised by Greenpeace in relation to their Indonesian operations,” he said.

Lee highlighted the fact that it sources directly from TH Plantations in Malaysia and not from their plantations in Indonesia, which is against Greenpeace’s allegations. The supply from TH Plantations is 15,850 tonnes or 1.38% of IOI’s purchase from third party suppliers in 2015.