Busi­ness as usual yet with IOI: Nestlé SA

> Big­gest food com­pany in the world says there’s in­suf­fi­cient ev­i­dence that Malaysian group’s en­vi­ron­men­tal prac­tices have im­proved

The Sun (Malaysia) - - SPEAK UP - BY EVA YEONG

PE­TAL­ING JAYA: Nestlé SA, which has phased out all ex­ist­ing con­tracts with IOI Corp Bhd, will not be re­sum­ing its com­mer­cial re­la­tion­ship with the Malaysian group any time soon, cit­ing in­suf­fi­cient ev­i­dence of im­proved en­vi­ron­men­tal prac­tices.

“We are con­tin­u­ing to en­gage IOI in a di­a­logue and look for­ward to learn­ing more on the progress which the com­pany is mak­ing. To date, we have not seen suf­fi­cient ev­i­dence of im­prove­ments,” a rep­re­sen­ta­tive from Nestlé SA, the food gi­ant’s head office in Vevey, Switzer­land, told Sun­Biz in an email in­ter­view.

Nestlé said it has trace­abil­ity sys­tems in place and works with its part­ner or­gan­i­sa­tion, The For­est Trust (TFT), which helped the group look into IOI’s re­sponse to the is­sues raised after the sus­pen­sion of the Malaysian com­pany’s Round­table on Sus­tain­able Palm Oil (RSPO) cer­ti­fi­ca­tion.

“Along­side TFT, we car­ried out an assess­ment of IOI’s ac­tion plan. Our con­clu­sion was that it did not go far enough in tack­ling the is­sues raised and that as a con­se­quence Nestlé will not award any new busi­ness to IOI group,” it said.

Nestlé said the lift­ing of IOI’s RSPO cer­ti­fi­ca­tion sus­pen­sion is the first step to­wards re­build­ing trust with its clients, in­clud­ing Nestlé, but it will not change its ap­proach un­til IOI’s up­graded poli­cies are en­acted, with im­prove­ments ver­i­fied on the ground by an in­de­pen­dent group of ex­perts.

“We will re­main in di­a­logue with IOI Group dur­ing this time to en­sure that the ex­change of best prac­tices and ex­pe­ri­ences con­tin­ues,” it added.

Ac­cord­ing to the Nestlé rep­re­sen­ta­tive, all sup­pli­ers must ad­here to its non-ne­go­tiable Re­spon­si­ble Sourc­ing Guide­line and Nestlé Sup­plier Code, which in­cludes a num­ber of pro­vi­sions on en­vi­ron­men­tal and other min­i­mum re­quire­ments.

If any of its sup­pli­ers are found to be in vi­o­la­tion of reg­u­la­tions, Nestlé will try, where pos­si­ble, to en­gage and work with the sup­pli­ers to im­prove prac­tices.

“Where there is con­sis­tent ev­i­dence of a lack of progress against our stan­dards or an un­will­ing­ness to en­gage in re­me­di­a­tion mea­sures, we re­serve the right to re­view and po­ten­tially ter­mi­nate com­mer­cial re­la­tion­ships,” said the rep­re­sen­ta­tive.

IOI was a Nestlé sup­plier for seven years be­fore ties were cut fol­low­ing the RSPO sus­pen­sion of IOI’s sus­tain­abil­ity cer­ti­fi­ca­tion in April this year.

How­ever, in Au­gust, RSPO lifted the sus­pen­sion after its board of gov­er­nors en­dorsed the rec­om­men­da­tion made by the com­plaints panel on the is­sue. The com­mit­tee said it was sat­is­fied that IOI met the con­di­tions set out in its letter to the com­pany in March, based on the ac­tions that IOI had taken and im­ple­mented since then.

Ear­lier this week, en­vi­ron­men­tal con­sul­tant Ai­den­vi­ron­ment threat­ened to with­draw its mem­ber­ship in RSPO if the green palm oil body does not come up with com­mit­ment to change.

It also said the green palm oil body has made “se­ri­ous mis­takes” with the IOI case.

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