This article first appeared in The Edge Financial Daily, on July 20, 2016.

KUALA LUMPUR: US-based agribusiness giant Cargill Inc is the latest palm oil user to have stopped buying palm oil from IOI Corp Bhd, after the latter’s sustainability certification was suspended by the Roundtable on Sustainable Palm Oil (RSPO) on April 1.

According to environmental news website Mongabay.com, Cargill, which has committed to purging its vast supply network of deforestation, peatlands conversion and human rights abuses, is one of the last major customers of IOI to act in response to the RSPO’s decision.

“IOI Group has yet to deliver a responsible sourcing policy or a detailed sustainability implementation plan to meet our requirements,” Mongabay.com quoted Cargill as saying on Monday.

“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.

The Mongabay report added that Cargill had said 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.

Center for International Policy campaign director Deborah Lapidus was also quoted as saying that Cargill had given 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, and just can’t issue another paper commitment and wipe its hands clean of its many violations. 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,” she added.

Until its suspension, IOI was one of the biggest suppliers of RSPO-brand “Certified Sustainable Palm Oil”. It was reported earlier that Unilever plc, Mars Inc and Kellogg Co had dropped IOI Corp as their palm oil supplier due to the RSPO Suspension.

IOI Corp shares closed up 3 sen or 0.69% at RM4.35 yesterday, with a market capitalisation of RM27.35 billion. Since its RSPO suspension, IOI Corp’s share price has dropped 4% from RM4.54 on April 1.