A Deadly Trade-off: IOI’s Palm Oil Supply and Its Human and Environmental Costs

by Ivy Schlegel

September 28, 2016

Over the last two decades, the plantation sector has laid waste to Indonesia’s forests and peatlands. Millions of hectares have been destroyed for pulp and oil palm concessions, at great cost to wildlife, workers, communities, and our climate. But who is to blame? And who has the power to deliver change?

This Greenpeace International investigative report looks at the Malaysian palm oil company IOI Group and its downstream subsidiary in Europe and North America, IOI Loders Croklaan.

Despite policies to ensure that its palm oil supply is free from deforestation, peatland destruction, or exploitation, IOI continues to buy palm oil from third-party suppliers linked to serious environmental destruction and human rights abuses, including:

  • Clearance of forest, including primary forest, in Papua (Austindo Nusantara Jaya, Eagle High, Goodhope, Korindo) and Kalimantan ( Eagle High, Indofood, TH Plantations)
  • Development on peatland ( Eagle High, Goodhope, TH Plantations)
  • Extensive uncontrolled fires (Eagle High, Indofood, Korindo) including evidence of deliberate use of fire in land clearing (Korindo)
  • Exploitation of workers, including evidence of child labour (Eagle High, Indofood)
  • Human rights abuses, including developing land without the proper free, prior and informed consent (FPIC) of the local community (Austindo Nusantara Jaya, Goodhope) and excessive force including by on-site army and paramilitary police (Eagle High, Goodhope)
A Deadly Trade-off

© Greenpeace International

The problems identified in this report are not limited to IOI, but include all major traders, including Golden Agri Resources, Musim Mas, and Wilmar.

These traders are not only members of the Roundtable of Sustainable Palm Oil (RSPO) but have their own sustainable sourcing or no-deforestation policies. Many growers profiled in these case studies are also RSPO members.

Our findings show that the problem is systemic and raises concerns for all companies downstream of the destruction.

Responsible companies must start working together, to the same standards, using the same tools, to identify and exclude rogue players such as those identified in this report.

Download the full report.

Ivy Schlegel

By Ivy Schlegel

Ivy Schlegel is a research specialist with the Greenpeace USA forests team, focusing on Indonesian palm oil and the markets for forest commodities. Ivy has worked with Greenpeace USA since 2009.

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