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Unilever Suspends Sourcing from Indonesian Palm Oil Supplier Amid Deforestation Allegations

Global consumer goods firm Unilever has suspended sourcing from an Indonesian-based palm oil supplier which was found to be in breach of policy on deforestation and peatland clearance.

Ongoing deforestation and peatland clearance by Sawit Sumbermas Sarana (SSMS) and its subsidiaries was demonstrated through satellite images in a recent investigation by Chain Reaction Research.

The study found that Unilever’s ongoing trading with SSMS might damage its sustainability reputation. As such, Unilever has joined the ranks of Wilmar International, Apical and Golden Agri-Resources (GAR) in suspending trading with SSMS.

Published 7 years ago | About a 2 minute read

Global consumer goods firm Unilever has suspended sourcing from an Indonesian-based palm oil supplier which was found to be in breach of policy on deforestation and peatland clearance.

Ongoing deforestation and peatland clearance by Sawit Sumbermas Sarana (SSMS) and its subsidiaries was demonstrated through satellite images in a recent investigation by Chain Reaction Research.

Unilever has confirmed it will not resume sourcing palm oil products from SSMS until “clear progress” has been made on the implementation of a remedial action plan. In the meantime, the Anglo-Dutch firm is actively engaging with SSMS and relevant NGOs and stakeholders to determine a way forward for SSMS to address the proven grievances.

A Unilever statement made earlier this month reads: “We have recently been made aware of allegations against palm oil supplier SSMS which we take extremely seriously. We expect the highest standards from all of our suppliers and strict adherence to the Unilever Sustainable Palm Oil Policy which mandates no deforestation, no new development on peat and no exploitation of peoples and communities.”

Palm oil concerns

Malaysian and Indonesian companies dominate global palm oil production, but have been linked to deforestation and slash-and-burn clearance methods that have contributed to the huge forest fires across Indonesia. Wilmar, GAR, Asian Agri and Cargill are among the big palm oil producers to have adopted zero deforestation polices.

The latest suspension comes just over a year after Unilever cancelled its contracts with a Malaysian-based palm oil producer and trader which was suspended over deforestation and community conflict issues. The IOI Group has since committed to address these issues in its supply chain, and was reinstated by the RSPO in August last year, promising to deliver a “comprehensive plan of remediation”.