3 giant global consumer firms drop Malaysian palm oil supplier

Three global consumer giants have aborted transactions with Malaysia’s second top palm oil company due to its alleged involvement in forest fires and haze that have depleted Indonesia’s green cover.

Unilever, a company owning 400 brands including Dove, Ponds, and Vaseline, announced last week that it would cancel its supplier agreements with palm oil producer and trader IOI over its involvement in Indonesia’s massive forest fires. The decision came after IOI was suspended by the Roundtable on Sustainable Palm Oil (RSPO), a group of environmental stakeholders on the global palm oil sector, according to the Straits Times.

Because of the suspension, IOI’s reputation as a top-ten global palm oil company was tarnished. Unilever is one of the buyers of IOI palm oil.

Aside from Unilever, United States’ reputable food manufacturers Mars and Kellogg’s has removed IOI as their prime supplier of palm oil. Both companies initiated steps to drop contracts with IOI’s refining subsidiary IOI Loders Croklaan, which has refineries in Malaysia and Holland.

The immediate actions of the three global companies will tremendously affect the palm oil company’s sales.

Palm and kernel oil are main ingredients in most of the products people consume daily, such as ice cream, biscuits, soaps, shampoos, and many more.

The cancellation of IOI palm oil contracts will also have a domino effect on Malaysia’s palm oil industry as other global companies vowed to source their materials from suppliers that don’t violate environmental safety laws and never employ child workers.

Last July, Indonesian forests in West Kalimantan were scorched for weeks after ’slash and burn’ forest practices caused the forest peatlands to ignite fire and haze. Palm oil and paper companies were acutely blamed for the environmental catastrophe. Gianna Francesca Catolico, INQUIRER.net

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