Ongoing deforestation and peatland clearance by SSMS—an Indonesian palm oil producer—and its subsidiaries were demonstrated through satellite images in an investigation by Chain Reaction Research, a provider of sustainability risk analysis for businesses.
The food and beverage manufacturer found SSMS in breach of its Sustainable Palm Oil Sourcing Policy, and has decided to suspend sourcing from the palm oil producer. To date, SSMS has done little to diminish its buyers’ material concerns about the company’s deforestation practices.
The company wants the palm oil producer to present a remedial action plan and does not intend to resume buying palm oil products until clear progress has been made on the implementation of this remedial action plan.
The latest suspension comes just over a year after the company cancelled its contracts with a Malaysian-based palm oil producer and trader which was suspended over deforestation and community conflict issues.
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, Asian Agri and Cargill are among the big palm oil producers to have adopted zero deforestation policies.