Unilever : No Plans to End Supply Contract with IOI

CONSUMER goods giant Unilever says it will not cancel palm oil supply contracts with IOI Corp Bhd and that it is confident the planter will address concerns over logging forests raised by a green group.

IOI, Malaysia’s No. 2 planter, had dismissed the report by Friends of the Earth that it cleared rainforests on Borneo island to expand, saying the allegations were inaccurate.

“We believe IOI is a very responsible supplier and are confident that if there is truth in the current allegations, IOI will address them,” Unilever head of sustainability Jan-Kees Vis said in an e-mailed response yesterday.

“There are no plans to cancel any contracts with IOI.”

Unilever, the world’s top palm oil buyer, has so far blacklisted two Indonesian suppliers after verifying reports of the firms felling forests and clearing peatlands to expand – practices that release global warming emissions.

Unilever, which uses palm oil for products like Dove soap and Stork margarine, said it contacted IOI over the report and welcomed the move by IOI and the green group in meeting “face to face” to discuss the issue.

The Anglo-Dutch firm buys about 1.5 million tonnes of palm oil annually, or 3 per cent of global palm oil production, making it the top consumer in the world.

IOI owns about 80,000ha of land on the Indonesian side of Borneo island – a resource-rich, forested region that is the frontline for expanding oil palm estates.

The Friends of the Earth report also claimed that IOI practised open burning and drained peatlands, prompting the firm’s key customer Neste Oil to say it will conduct its own probe into the matter.

IOI supplies palm oil to the Finnish refiner’s biofuel plants in Europe.

IOI said in a statement last Friday, without going into the details, that it had set up a clear action list and time-frame to address Friends of the Earth’s remaining concerns after meeting with the green group.

Both Unilever and Neste Oil have said their supply contracts with palm oil firms include clauses that allow for termination of the agreement if the suppliers are found to be damaging the environment. – Reuters

Source : Business Times

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