Swiss retailer Migros will not cut palm oil supply contracts with Malaysia’s IOI Corp and will work together with the planter to address allegations of illegal land seizures raised by activists.

The allegations surfaced after a Malaysian court declared this year that an indigenous group in Sarawak had won a suit against the state authorities and IOI over a land dispute, IOI said in a statement today.

IOI, Malaysia’s second largest listed planter, has also come under fire from green group Friends of the Earth and the Bruno Manser fund, a human rights foundation, who highlighted IOI’s practice of expanding plantations through methods including burning forests in top producers Malaysia and Indonesia.

“Migros and IOI had regular exchanges on sustainability objectives. Both companies have already engaged to schedule a multi-stakeholder meeting with several NGOs involved,” IOI said.

“It is deemed very important by IOI and Migros to involve other concerned parties to clarify the current situation and define the next steps.”

Migros had earlier issued a statement saying it may consider replacing palm oil suppliers like IOI for its supermarket products if there are benefits to the environment and indigenous communities.

Migros is the third IOI customer after Anglo-Dutch consumer goods firm Unilever and Finnish refiner Neste Oil to question the planter’s alleged actions in Malaysia and Indonesia.

IOI has dismissed claims by green groups that it cleared rainforests in Borneo island to expand oil palm estates, saying the reports were inaccurate.

But Unilever, the world’s top palm oil buyer, has already come down hard on Indonesian palm oil suppliers like SMART TBK and Duta Palma by cutting supply ties with them after finding some of the allegations to be accurate. -- Reuters