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IOI CorporationMalaysia
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By: BankTrack
Created before Nov 2016
Last update: 2018-01-18 15:10:13

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Sector 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/

About IOI Corporation

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.

Governance

Financiers

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

| |
Type:
Year:
blog
external news
our news

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
blog
external news
our news

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

2020-12-21 | Forest Heroes
blog
external news
our news

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

2020-09-08 | forestsandfinance.org
blog
external news
our news

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
external news
our news

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

2017-11-15 | Center for International Forestry Research (CIFOR), Profundo
blog
external news
our news

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
blog
external news
our news

Swiss banks bankrolling illegal deforestation in Africa and East Asia

2017-03-24 | Illegal Deforestation Monitor
blog
external news
our news

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

2017-01-17 | Greenpeace
blog
external news
our news

RSPO lifts suspension of Malaysian palm oil giant IOI

2016-08-05 | Mongabay
blog
external news
our news

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

2016-07-25 | Rainforest Action Network
blog
external news
our news

Cargill suspends new purchase agreements with Malaysian palm oil giant IOI

2016-07-18 | Mongabay
blog
external news
our news

Malaysian palm oil giant IOI under pressure after Cargill ultimation

2016-07-01 | Eco-Business
blog
external news
our news

NGOs call for mass boycott of palm oil giant IOI

2016-05-13 | Eco-Business
blog
external news
our news

Malaysian palm oil giant IOI sues RSPO over suspension

2016-05-09 | Mongabay
blog
external news
our news

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

2016-02-16 | Nijmegen | BankTrack
blog
external news
our news

IOI RISKS SUSPENSION FROM RSPO-CERTIFIED PALM OIL MARKET

2015-09-30 | Chain Reaction Research
blog
external news
our news

Palm oil major makes deforestation-free commitment

2015-02-03 | Mongabay
blog
external news
our news

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

2014-09-25 | Greenpeace
blog
external news
our news
private

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

2014-09-19 | KLK
blog
external news
our news

IOI Group suspected of serious labour rights violations

2014-09-16 | Finnwatch
blog
external news
our news

Institutional Investors Press Palm Oil Producers to Stop Cutting Down Rainforest

2014-09-08 | Green Century Funds
blog
external news
our news

Palm Oil Industry Comes Together In Significant Sustainability Initiative

2014-07-08 | Sime Darby
blog
external news
our news

RSPO NOTIFICATION OF ON GOING PLANTING

2014-02-02 | RSPO
blog
external news
our news
private

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

2013-05-14
blog
external news
our news

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

2013-03-11 | Mongabay
blog
external news
our news

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

2011-04-06 | Mongabay
blog
external news
our news

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

Documents

Type:
Year:
our publications
2021-12-14 00:00:00

Actions speak louder: Assessing bank responses to human rights violations

2021-12-14 00:00:00 | BankTrack
company documents
2018-01-18 00:00:00

Sustainable Palm Oil & Responsible Investment

2018-01-18 00:00:00 | Aviva Investors and Spott
ngo documents
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

2017-06-13 00:00:00 | RAN, TuK Indonesia & Profundo
ngo documents
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

2017-03-27 00:00:00 | RAN, TuK & Profundo
ngo documents
2017-01-17 00:00:00

Dirty Bankers

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

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

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

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

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

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

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

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

2015-12-11 00:00:00 | Deutsche Bank
ngo documents
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
2015-03-01 00:00:00 | Finnwatch
ngo documents
2015-02-16 00:00:00

Tycoon-controlled oil palm groups in Indonesia - Executive Summary

2015-02-16 00:00:00 | TuK, Profundo
company documents
2015-01-12 00:00:00

Mutual responsibility agreement

2015-01-12 00:00:00 | IOI
annual reports
2014-10-16 00:00:00

Annual Report 2014

2014-10-16 00:00:00 | IOI
ngo documents
2014-09-23 00:00:00

The Green Tigers

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

The law of the jungle

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

Sustainable_Palm_Oil_Manifesto.pdf

2014-07-08 00:00:00
ngo documents
2014-06-13 00:00:00

Malaysian Overseas Foreign Direct Investment in oil palm land bank

2014-06-13 00:00:00 | AidEnvironment
ngo documents
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
2013-11-22 00:00:00 | Friends of the Earth Europe
annual reports
2012-12-31 00:00:00

Annual Report 2012

2012-12-31 00:00:00
ngo documents
2012-10-29 00:00:00

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

2012-10-29 00:00:00 | Greenpeace
ngo documents
2012-10-01 00:00:00

Scorecard on Palm Oil producers

2012-10-01 00:00:00 | Greenpeace
ngo documents
2010-05-01 00:00:00

Milieudefensie's Response to IOI’s Rebuttal in Substance

2010-05-01 00:00:00 | Milieudefensie
ngo documents
2010-03-01 00:00:00

To green to be true

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

Links

Information on Corporate Governance

http://www.ioigroup.com/corporateInfo/corp_governance.cfm

IOI and the RSPO

http://www.rspo.org/en/member/62/ioi-group

RSPO complaint over land conflicts in Sarawak, 2010

http://www.rspo.org/en/status_of_complaint&cpid=4
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