KUALA LUMPUR: IOI Group has had its certificate for sustainable palm oil reinstated by the Roundtable for Sustainable Palm Oil (RSPO).
The RSPO is satisfied that the IOI Group has fulfilled demands to improve its environmental performance. It received the reinstatement Monday, according to a report in Business Green.
IOI Group’s certification was suspended in March for not meeting the certificate’s standards and failing to adequately protect peat areas and forests.
The ruling led to a wave of major multinationals, including Unilever, Kellogg’s and Mars, to drop IOI Group from their lists of approved suppliers, prompting IOI Group to mount a legal challenge against RSPO, which it has since dropped.
The RSPO said in a statement: “The complaints panel is satisfied that IOI has met the conditions set out in its letter to IOI dated March 14, 2016, based on the actions that IOI has taken and implemented since then.”
It added: “However, the Board of Governors wish to make it clear that the implementation of the action plan by IOI shall be subject to an independent ground verification by a team of experts. These experts will be appointed by the RSPO Secretariat within 30 days from the date of this letter,” it said.
The RSPO said the findings of the independent ground verification team would be scrutinised by its complaints panel.
It warned that the complaints panel would advise the RSPO to reinstate the suspension immediately if the verification team “finds significant failures in the implementation of IOI’s commitments to RSPO”.
Unilever, one of the multinationals which dropped IOI Group following its suspension, said it was now considering whether to resume its commercial relationship with the company, according to the Business Green report.
Meanwhile, theedgemarkets.com quoted analysts as saying it was still too early for the group to regain its customers such as Unilever, Colgate-Palmolive, Hershey’s, Johnson & Johnson, Kellogg’s, Mars, Nestle, Procter & Gamble, Reckitt Benckiser, SC Johnson and Yum! Brands which had stopped buying palm oil from IOI following the suspension.
“This (lifting of the suspension) is definitely positive for IOI. The suspension has affected its downstream operations,” CIMB Research regional head of plantations and deputy head of Malaysia research Ivy Ng Lee Fang told theedgemarkets.com.
Kenanga Investment Bank Bhd plantation analyst Voon Yee Ping, in agreeing, said, however, that the positive effects from the lifting might take some time to be felt by IOI.