Palm oil buyers hold off mending ties with Malaysia plantation giant
* Malaysia watchdog has reinstated IOI's green certification
* But firms such as Nestle, Kellogg say holding off on buying
* IOI says working to "re-engage" customers
By Emily Chow
KUALA LUMPUR, Aug 15 (Reuters) - Leading global buyers of palm oil are holding off on mending business ties with Malaysian plantation giant IOI Group despite an industry watchdog's decision to reinstate the producer's green certification.
The Roundtable for Sustainable Palm Oil (RSPO) in April withdrew IOI's 'sustainability certification' after allegations the company had illegally chopped down rainforests in Indonesia and planted palm crops on peatland.
But earlier this month, it said IOI, one of the world's leading palm producers and traders, had satisfied conditions for the suspension to be lifted, a move that has sparked sharp criticism from environmental groups.
Palm oil, used in everything from chocolate to cosmetics, has become one of the world's fastest expanding crops, but the industry has been facing intense pressure over deforestation and methods used to clear land. That has driven many buyers to demand certification of environmentally sound behaviour.
Food companies Nestle, Kellogg, Mars Inc and Hersheys, along with healthcare product makers Johnson & Johnson and Reckitt Benckiser told Reuters they had no immediate plans to return to business with IOI despite the latest step by RSPO. Continued...