The palm oil processor behind Indonesia's largest food company has had its membership of the Roundtable for Sustainable Palm Oil (RSPO) revoked, after it failed to address serious concerns over its production standards, the RSPO confirmed late last week.

The RSPO's Complaints Panel issued a decision on February 28 to bar palm oil company PT Salim Ivomas Pratama Tbk (SIMP), which is owned by Indofood, from the group. The decision came after the firm failed to deliver a plan outlining how it would raise standards to comply with RSPO's environmental and labour rules.

In November the RSPO ordered SIMP to take corrective action to address more than 20 violations of its standard, requiring SIMP to submit a plan for addressing the issues by February 8. Instead, in late January SIMP said it would be withdrawing from the RSPO system altogether.

The RSPO last week confirmed it would still be terminating SIMP's membership, concluding a two-year long investigation into its practices. In its termination letter the RSPO said SIMP was no longer a member of the RSPO with "immediate effect", adding it believes the firm is "refusing and unwilling to meet the RSPO's standards and principles expected of its members".

Indofood said it is "extremely disappointed with the process and decision of the Complaints Panel", and insisted many of the original allegations surrounding employment conditions at palm oil plantations are false.

"We have therefore decided to concentrate our sustainability journey and practices on implementation of the mandatory Indonesian Sustainable Palm Oil standards," it added.  

SIMP was the fourth largest company in the RSPO's membership, and its departure is a major blow for the organisation, which is balancing the rising pressure to raise environmental and social standards in the palm oil supply chain with the body's voluntary membership policy.

Speaking to BusinessGreen, RSPO's chief executive Datuk Darrel Webber said it's "always a concern" when firms walk away from the RSPO.

"Do we make the world better [when a company withdraws]? I don't know," he said. "However, we do have rules, we do have obligations that members have to keep, and the Complaints Panel has decided that the rules were broken and the firm's membership therefore had to be terminated."

Stay tuned for a full interview with Webber on BusinessGreen later this month.