Another blow for Fonterra.

Just a week after the global dairy giant reported a $196 million loss, the company's been linked to extensive deforestation and human rights abuses.

A Greenpeace report's revealed Fonterra's sole supplier of Palm Kernel Expeller has been buying from 18 of the 25 major palm oil producers carrying out unethical practices.

Greenpeace NZ sustainable agriculture campaigner Gen Toop says they're extremely shocked by the findings.

"Fonterra made promises to keep deforestation and human rights abuses out of its supply chain, and I think this report shows Fonterra is clearly failing on those promises."

Toop says the country's reputation is on the line.

"New Zealand prides on being a country that cares for the environment and respects human rights, but our biggest export earner is completely undermining that image, and it is a risk to our entire international reputation."