10/05/2016 (The Star) - In an unprecedented move, IOI Corp Bhd has announced that it is challenging the suspension of its certifications by The Roundtable of Sustainable Palm Oil (RSPO).

In a stock exchange filing yesterday, the palm oil giant said it had filed a challenge proceeding with the Justice of Peace (JP) in Zurich, where the RSPO is based.

The challenge pertains to the RSPO board of governors’ decision to suspend IOI back in March following allegations of non-compliance.

Under Swiss law, an action to challenge the decision of an association must be filed within one month after the decision was made. A conciliatory hearing will be held before the JP, who will act as a mediator between the two parties.

According to IOI in its announcement, the JP would authorise the company to proceed with legal action only if the parties are unable to reach an agreement. Such a lawsuit would be filed at the District Court in Zurich, it noted.

“IOI wishes to clarify that the challenge proceeding is a separate matter from its ongoing implementation of the concrete actions as required by the RSPO. It also remains committed to its membership in and the sustainability principles of the RSPO,” it said.

In a report yesterday, a United Kingdom-based daily quoted IOI chief executive officer Datuk Lee Yeow Chor as saying that while the firm was committed to the RSPO, it had been “unfairly affected” by the suspension.

The company was notified of its suspension by the RSPO on March 25 in respect of complaints made by a non-governmental organisation against IOI’s Indonesian subsidiaries.

Among the issues raised were the subsidiaries’ alleged non-compliance with the RSPO’s certification systems regulations, failing to submit new planting procedure documentations within the prescribed time, and non-adherence to the RSPO principles and criteria pertaining to the development of oil palm plantations.

IOI’s suspension had directly affected its relationship with major buyers, who are especially sensitive to palm oil sustainability standards. Nestlé, Kellogg, Mars and Mondelez are among the big names that have already sourced palm oil from other suppliers as a result of IOI’s suspension.

The company has an established presence in Europe. It owns the continent’s biggest palm oil refinery in the Netherlands with a capacity of 1.2 million tonnes a year. It also has a specialty oils and fats plant in the country as well as another two oleochemical plants in Germany.