Malaysian palm oil giant IOI Group said it will abandon some 430 hectares of land in Indonesia in part-settlement of a dispute over allegations of illegal deforestation and planting.
It will continue to cultivate the rest of the land under dispute - about 11,000 hectares - but would not market the palm oil produced as having sustainability certification for a period of about 30 years, the company said in a joint statement with Amsterdam-based green group Aidenvironment.
"IOI regrets not having taken necessary actions to be in full compliance with the Roundtable on Sustainable Palm Oil's (RSPO) rules at all times," it said, referring to a grouping of palm producers, activist groups and consumer companies that provides sustainability certificates for the industry.
Palm oil is the most widely used edible oil in the world, found in everything from margarine to cookies and soap. Grown mainly in Indonesia and Malaysia, plantations have come under scrutiny from activists and consumer companies in recent years, particularly over the clearing of millions of hectares of forest.
In 2015, Aidenvironment filed a complaint to the RSPO against IOI Group over claims that the planter had illegally chopped down rainforests in Indonesia and planted palm crops on peatland.
Aidenvironment said in the statement issued on Thursday that it had raised all other matters with IOI for perusal and had no further standing issues with plantation company.
IOI Group had its certificates of sustainability suspended by the RSPO in April, but the suspension was lifted just four months later, sparking criticism from environmental and consumer groups alike.