Malaysian palm oil giant IOI drops lawsuit against green group

One of the world’s largest producers of palm oil has drained and planted on areas of peatland supposed to be protected by Indonesian law, claims a new report from Greenpeace, with levels of damage potentially worse than previously reported.

The NGO says satellite images of Ketapang, west Kalimantan show drainage canals covering an area of peatland that the Malaysia-based company IOI had marked for restoration in a sustainability commitment in 2014.

Draining peatland is the first step for developing a palm oil plantation, but dry land is at increased risk of catching fire. Greenpeace says satellite images suggest nearly a third of the Ketapang landscape - once home to endangered and vulnerable species including orangutans, proboscis monkeys and sun bears says the NGO - burned in 2015.

The new report is the latest blow for the IOI Group. A founding member of the Roundtable on Sustainable Palm Oil (RSPO), a body set up to address environmental and social issues in palm oil, IOI’s sustainability certification was suspended in April after allegations of wrongdoing in Indonesia.

Companies including Dunkin’ Donuts, McDonald’s, Nestlé and Unilever have pledged not to source from the palm oil company, which earlier this week decided to drop a lawsuit against RSPO for suspending its certification.

Greenpeace is calling on the RSPO to maintain its suspension until IOI has a meaningful plan in place to resolve damage to the Ketapang peatland landscape and prevent fires. So far, it has called the new draft policy and action plan offered by IOI, weak and lacking significant commitments.

Among other suggestions, Greenpeace recommends that IOI improves transparency by publishing concession maps for its operations through Global Forest Watch’s online forest monitoring and alert system.
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Dr Surina Binti Ismail, sustainability group head for IOI stresses that its draft policy is still a work in progress and that it has “taken note of Greenpeace’s suggestions” and is in favour of a few of them. She adds: “Even prior to our suspension [from the RSPO], we have instigated restoration of the peatland that we had accidentally cleared and even reported to RSPO on this matter.”

With regards to fire prevention, Ismail says IOI is engaged in activities including watch towers to monitor fires, water gauges to monitor peat water tables, and installing tube wells for water access.

A spokesperson from RSPO says the organisation cannot comment on next steps for IOI’s suspension until its complaints panel has made a decision.