PETALING JAYA: IOI Group, Malaysian’s second largest palm oil producer has lost three big clients due to their failure to stop the destruction of peatland forest and orang utan habitats when setting up their plantations in West Kalimantan.

According to a report in Singapore’s Straits Times, the three clients are Unilever, Mars and Kellogg’s, the world’s top food and consumer goods companies.

Unilever began cancelling supplier agreements with the IOI Group after the palm oil producer was suspended last week from the Roundtable on Sustainable Palm Oil (RSPO), a group of planters, non-governmental organisations (NGOs) and consumers that set standards for the global palm oil sector, the Singapore daily reported. RSPO’s suspension of IOI’s certification followed a year-long investigation.

Mars and Kellogg’s meanwhile are in the process of dropping contracts with IOI’s refining subsidiary IOI Loders Croklaan, that has refineries in Malaysia and Holland.

Annisa Rahmawati, a Greenpeace Indonesia forest campaigner said in a statement last week that NGOs had painstakingly documented IOI’s systematic destruction of peatland forests and orang-utan habitats in West Kalimantan for the past eight years.

“IOI has been given every opportunity to reform and has repeatedly refused to do so, even though its actions were contributing to the fire and haze crisis,” the Straits Times reported her as saying.

IOI Group chief executive officer Lee Yeow Chor said in a statement last Thursday that the company regarded the RSPO suspension as a “very serious matter and (it) has given rise to new challenges for us.”

Lee also said IOI had begun to take corrective measures “to review and enhance our sustainability practices.”

Speaking to the Straits Times, plantation company analyst Ivy Ng of CIMB said, “The suspension of IOI Group’s RSPO certification appears to have far-reaching impact on its downstream business that is more severe than in our earlier analysis. It has also hurt the reputation of the group.”

The news portal said RSPO’s suspension of IOI effectively means the company can no longer produce certified palm products such as palm and palm kernel oil, common ingredients in a variety of food and products like biscuits, ice-cream, soaps and cosmetics.