Cargill suspends purchase agreements with palm oil supplier IOI Group

Cargill has suspended its ties with the Malaysian palm oil giant IOI Group following the latter’s certification suspension by the Roundtable on Sustainable Palm Oil (RSPO) over environmental destruction in Indonesia.

As a leading international agricultural trading company, Cargill has committed to end deforestation, peatlands conversion and human rights abuses from its vast supply network. It is one of the last major customers of IOI to act in response to the RSPO’s decision. Before Cargill’s announcement, over two dozen consumer goods giants have already moved to cut off IOI, phase out existing supplies or suspend future purchases.

“IOI Group has yet to deliver a responsible sourcing policy or a detailed sustainability implementation plan to meet our requirements. Cargill will suspend business by not entering into any new purchase contracts until IOI Group can meet our requirements and comply with our sustainable palm oil policy,” Cargill said in a statement.

The company also announced in late June that unless IOI issued a new sourcing policy and sustainability plan by July 15, it would not enter into any new purchase agreements with the company.

“Cargill gave IOI every opportunity to reform and IOI failed to meet their expectations. The market has spoken. IOI is not a source of responsibly produced palm oil,” said Deborah Lapidus, campaign director at the Center for International Policy.

“IOI can’t just issue another paper commitment and wipe its hands clean of its many violations,” she added. “It has serious work to do to implement a moratorium on new forest and peat clearing, demonstrate verified progress on the ground, and make up for past damage to ecosystems and communities.”