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Home › Dodgy Deals ›
Dodgy Deal
IOI CorporationMalaysia

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Last update: 2018-01-18 15:10:13

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Last update: 2018-01-18 15:10:13
Why this profile?
About
Sectors Agriculture for Palm Oil
Headquarters
Ownership

IOI Corp is listed on the Kuala Lumpur Stock Exchange (Bursa Malaysia). As of August 2014, its top 3 major shareholders are as follows:

Vertical Capacity Sdn Bhd: 43.59%

Employees Provident Fund: 8.58%

Bank J. Safra Sarasin Ltd: 3.60%

Chairman Lee and his family's control of IOI Corporation is held via Progressive Holdings Sdn, which in turn holds 100% equity interest in Vertical Capacity Sdn Bhd.

Subsidiaries
Bumitama – Indonesia
Website http://www.ioigroup.com/

IOI Corporation, founded in 1969, is a Malaysian conglomerate involved in the property and plantation business, including oil palm cultivation. The company's specialty fats businesses are operated under the Loders Croklaan name. Forest Heroes estimates that IOI represents more than a tenth of the global palm oil trade (Mongabay, Feb 2015).

IOI is a co-founder of the Roundtable on Sustainable Palm Oil (RSPO), although it has been suspended several times. It was partially suspended in April 2011, by being prevented from applying for new supply base certificates, due to specific concerns including disputes over native customary land leased by IOI for palm oil production in Sarawak (RSPO, April 2011). In September 2015 IOI was again reprimanded by RSPO, and warned to address serious legal and policy non-compliances in Kalimantan, or face expulsion from the Certified Sustainable Palm Oil (CSPO) market (CRR, September 2015). It was again suspended for four months in 2016.

Finance for IOI Corporation was the focus of a Human Rights Impact Briefing by BankTrack published in February 2016.

Impacts

Social and human rights impacts

In September 2014 a report by the Finnish corporate responsibility NGO Finnwatch investigated working conditions on IOI's estates in the southern region of Peninsular (West) Malaysia, in the states of Negeri Sembilan and Johor. Finnwatch conducted the research with the cooperation of the company, which facilitated access to its estates. The report found evidence of serious labour rights violations at IOI Group's plantations.

Examples of clear adverse human rights impacts caused by IOI Corporation, as evidenced by Finnwatch research, include:

1. Freedom from forced labour: IOI Corporation was found to keep possession of employees' personal documentation, including passports. Many of the workers stated that they were not able to get their passports even when they requested them. Confiscation or retention of passports is considered an indicator for forced labour by the International Labour Organization.

2. Right to freedom of association: The company was found to restrict employee access to trade unions, as well as restricting industrial action. The General Secretary of the National Union of Plantation Workers (NUPW), the only trade union in West Malaysia that represents workers in the plantation sector, reported that the union is denied access to foreign workers on IOI estates in order to provide training, to raise their awareness of their rights and organize them as union members. As workers do not have possession of their passports, they rarely leave the estates.

3. Right to an adequate standard of living: Some workers earned a salary that was below the statutory minimum wage, and were not compensated appropriately for overtime work. 

BankTrack wrote to 15 banks linked to IOI Corporation asking them how they had sought to prevent or mitigate these human rights impacts, and the results are presented in a February 2016 briefing paper.


Environmental and climate impacts

IOI is a co-founder of the Roundtable on Sustainable Palm Oil (RSPO), although it has been suspended several times. It was partially suspended in April 2011, by being prevented from applying for new supply base certificates, due to specific concerns including disputes over native customary land leased by IOI for palm oil production in Sarawak (RSPO, April 2011).

In September 2015 IOI was again reprimanded by RSPO, and warned to address serious legal and policy non-compliances in Kalimantan, or face expulsion from the Certified Sustainable Palm Oil (CSPO) market (CRR, September 2015).

It was again suspended in March 2016 in 2016 for for clearing peatland areas and developing land without obtaining required permits. This led major buyers such as Unilever, Mars, Kellogg’s and Procter & Gamble to suspend their contracts with the company, affecting its income and share price (Aviva, 2018). It was re-admitted in August 2016 (in a move which Greenpeace described as being "let off the hook too easily"), although its customer Unilver only resumed sourcing from IOI in August 2017.

As owner of 30.4 percent of the Bumitama company, IOI also shares responsibility for that company’s illegal deforestation and peatland clearance in orangutan habitat on the PT LSM and PT GY plantations, as well as on the BSS plantation.


Other impacts

IOI has used its political weight within the industry to try to subvert progressive companies’ efforts to implement strong deforestation-free sourcing policies, and fought against efforts to establish traceability. However, IOI Loders Croklaan has recently started to engage with Forest Heroes and is developing a policy to address these issues.

Financiers
Institution type
Finance type
Year

See Friends of the Earths report Commodity Crimes for more details and for the reactions of some of the financial institutions involved.

In 2011 Norway's Government Pension Fund Global divested from IOI Corporation, after it revised its investment guidelines to include deforestation as a portfolio risk.

News
BankTrack
Partners
Blog
External
Blog
BankTrack news BankTrack blog Partner news Partner blog

Banks failing to address severe human rights impacts transparently, finds BankTrack research

Findings reinforce the need for regulators to ensure access to effective remedy for people affected by bank finance
2021-12-14 | Nijmegen | BankTrack
BankTrack news BankTrack blog Partner news Partner blog

GREEN CATS 2020 UPDATE: SCORING PALM OIL AND SOY COMPANIES ON FOREST POLICIES AND TRANSPARENCY

2020-12-21 | Forest Heroes
BankTrack news BankTrack blog Partner news Partner blog

Banks are fueling deadly fires, Covid-19 threatens to compound the risks

2020-09-08 | forestsandfinance.org
BankTrack news BankTrack blog Partner news Partner blog

International NGOs Condemn IOI Group’s Plan to Divest from Conflict Palm Oil Plantation

If IOI divests, communities of Long Teran Kanan risk losing their lands, culture and livelihood
2017-12-14 | Forest Peoples Programme, Rainforest Action Network
Blog
BankTrack news BankTrack blog Partner news Partner blog

New report: Towards responsible and inclusive financing of the palm oil sector

2017-11-15 | Center for International Forestry Research (CIFOR), Profundo
Blog
BankTrack news BankTrack blog Partner news Partner blog

Major international banks and investors finance devastating impacts of forest-risk commodities

New report finds eight corporate giants in palm oil, pulp and paper, timber and rubber involved in social and environmental scandal; exposes financial banking
2017-04-24 | Tokyo | Rainforest Action Network
BankTrack news BankTrack blog Partner news Partner blog

Swiss banks bankrolling illegal deforestation in Africa and East Asia

2017-03-24 | Illegal Deforestation Monitor
Blog
BankTrack news BankTrack blog Partner news Partner blog

Dirty Bankers: How HSBC is financing forest destruction for palm oil

2017-01-17 | Greenpeace
BankTrack news BankTrack blog Partner news Partner blog

RSPO lifts suspension of Malaysian palm oil giant IOI

2016-08-05 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

RSPO's credibility on the line: Will it maintain its suspension of industry laggard IOI Group?

2016-07-25 | Rainforest Action Network
BankTrack news BankTrack blog Partner news Partner blog

Cargill suspends new purchase agreements with Malaysian palm oil giant IOI

2016-07-18 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Malaysian palm oil giant IOI under pressure after Cargill ultimation

2016-07-01 | Eco-Business
BankTrack news BankTrack blog Partner news Partner blog

NGOs call for mass boycott of palm oil giant IOI

2016-05-13 | Eco-Business
BankTrack news BankTrack blog Partner news Partner blog

Malaysian palm oil giant IOI sues RSPO over suspension

2016-05-09 | Mongabay
Blog
BankTrack news BankTrack blog Partner news Partner blog

New BankTrack Human Rights Impact Briefing: Labour standards violations in IOI Corporation’s Malaysian plantations

2016-02-16 | Nijmegen | BankTrack
BankTrack news BankTrack blog Partner news Partner blog

IOI RISKS SUSPENSION FROM RSPO-CERTIFIED PALM OIL MARKET

2015-09-30 | Chain Reaction Research
BankTrack news BankTrack blog Partner news Partner blog

Palm oil major makes deforestation-free commitment

2015-02-03 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Palm oil companies say they'll put forest destruction on hold. But what happens next?

2014-09-25 | Greenpeace
private BankTrack news BankTrack blog Partner news Partner blog

Major Growers Commit to No HCS Development as HCS Study Starts in Earnest

2014-09-19 | KLK
BankTrack news BankTrack blog Partner news Partner blog

IOI Group suspected of serious labour rights violations

2014-09-16 | Finnwatch
BankTrack news BankTrack blog Partner news Partner blog

Institutional Investors Press Palm Oil Producers to Stop Cutting Down Rainforest

2014-09-08 | Green Century Funds
BankTrack news BankTrack blog Partner news Partner blog

Palm Oil Industry Comes Together In Significant Sustainability Initiative

2014-07-08 | Sime Darby
BankTrack news BankTrack blog Partner news Partner blog

RSPO NOTIFICATION OF ON GOING PLANTING

2014-02-02 | RSPO
private BankTrack news BankTrack blog Partner news Partner blog

Oil palm firms team up with Sabah to protect Malua Forest Reserve

2013-05-14
BankTrack news BankTrack blog Partner news Partner blog

Norway's wealth fund dumps 23 palm oil companies under new deforestation policy

2013-03-11 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Malaysian palm oil giant in fight with forest people gets rebuke from RSPO

2011-04-06 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Announcement on IOI by RSPO Grievance Panel: Breach of RSPO Code of Conduct 2.3 & Certification Systems 4.2.4 (c)

2011-04-05 | RSPO
Resources
Documents
Links
2021-12-14 00:00:00

Actions speak louder: Assessing bank responses to human rights violations

BankTrack publication
2021-12-14 00:00:00 | BankTrack
2018-01-18 00:00:00

Sustainable Palm Oil & Responsible Investment

Company document
2018-01-18 00:00:00 | Aviva Investors and Spott
2017-06-13 00:00:00

Japanese and Malaysian banks and investors continue to pump billions of dollars into forest-risk companies, without adequate environmental and social safeguards

NGO document
2017-06-13 00:00:00 | RAN, TuK Indonesia & Profundo
2017-03-27 00:00:00

Financiers of IOI and Asia Pulp & Paper (APP) face material ESG risks from failure to respect land tenure rights

NGO document
2017-03-27 00:00:00 | RAN, TuK & Profundo
2017-01-17 00:00:00

Dirty Bankers

How HSBC is financing forest destruction for palm oil
NGO document
2017-01-17 00:00:00 | Greenpeace
2016-02-16 00:00:00

Human Rights Impact Briefing #1:Labour standards violations in IOICorporation’s Malaysian plantations

BankTrack publication
2016-02-16 00:00:00 | BankTrack
2016-01-15 00:00:00

Letter from Citi to BankTrack on IOI Corporation Human Rights Impact Briefing

Correspondence
2016-01-15 00:00:00 | Citi
2015-12-11 00:00:00

Letter from JPMorgan Chase to BankTrack on IOI Corporation Human Rights Impact Briefing

Correspondence
2015-12-11 00:00:00 | JPMorgan Chase
2015-12-11 00:00:00

Letter from Deutsche Bank to BankTrack on IOI Corporation Human Rights Impact Briefing

Correspondence
2015-12-11 00:00:00 | Deutsche Bank
2015-03-01 00:00:00

The New Law of the Jungle?

Responses by certification schemes and the IOI Group to Finnwatch’s Law of the Jungle report
NGO document
2015-03-01 00:00:00 | Finnwatch
2015-02-16 00:00:00

Tycoon-controlled oil palm groups in Indonesia - Executive Summary

NGO document
2015-02-16 00:00:00 | TuK, Profundo
2015-01-12 00:00:00

Mutual responsibility agreement

Company document
2015-01-12 00:00:00 | IOI
2014-10-16 00:00:00

Annual Report 2014

Annual report
2014-10-16 00:00:00 | IOI
2014-09-23 00:00:00

The Green Tigers

Which Southeast Asian Companies Will Prosper in the New Age of Forest Conservation?
NGO document
2014-09-23 00:00:00 | Forest Heroes
2014-09-01 00:00:00

The law of the jungle

Corporate responsibility of Finnish palm oil purchases
NGO document
2014-09-01 00:00:00 | Finnwatch
2014-07-08 00:00:00

Sustainable_Palm_Oil_Manifesto.pdf

Company document
2014-07-08 00:00:00
2014-06-13 00:00:00

Malaysian Overseas Foreign Direct Investment in oil palm land bank

NGO document
2014-06-13 00:00:00 | AidEnvironment
2013-11-22 00:00:00

Commodity Crimes: Illicit Land Grabs, Illegal Palm Oil and Endangered Orangutans (European version)

The Case of Bumitama Agri in West Kalimantan and its connection to global markets
NGO document
2013-11-22 00:00:00 | Friends of the Earth Europe
2012-12-31 00:00:00

Annual Report 2012

Annual report
2012-12-31 00:00:00
2012-10-29 00:00:00

GREENPEACE SCORECARD ON PALM OIL PRODUCERS - Full Table of Company Responses

NGO document
2012-10-29 00:00:00 | Greenpeace
2012-10-01 00:00:00

Scorecard on Palm Oil producers

NGO document
2012-10-01 00:00:00 | Greenpeace
2010-05-01 00:00:00

Milieudefensie's Response to IOI’s Rebuttal in Substance

NGO document
2010-05-01 00:00:00 | Milieudefensie
2010-03-01 00:00:00

To green to be true

NGO document
2010-03-01 00:00:00 | FoE

Information on Corporate Governance

IOI and the RSPO

RSPO complaint over land conflicts in Sarawak, 2010

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