Malaysia’s IOI Corporation Berhad (IOI) has decided not to sue the Roundtable on Sustainable Palm Oil (RSPO), which suspended IOI on 1 April following a year-long investigation into allegations that it had failed to protect forests and peat areas.
IOI had announced on 9 May that it was filing a challenge in the Zurich District Court of Switzerland against its suspension.
However, on 6 June, IOI said it would be withdrawing its lawsuit.
“Since the filing of the challenge, IOI has engaged with many of our stakeholders – such as customers, NGOs and the RSPO – to resolve the matter,” said CEO Dato’ Lee Yeow Chor.
IOI had agreed to an action plan to adopt the RSPO’s highest level of accreditation – the Next certification system – by the end of this year, he said.
Following the RSPO’s suspension, major food companies such as Nestlé, Mars, Unilever and Kelloggs dropped IOI as a supplier.
Lee previously said the suspension had affected IOI’s current RSPO contract commitments and had caused significant disruption to certain parts of the European and American food manufacturing sector.
“Our appeal was principally made on two aspects of the suspension decision: one is that the decision should not cover the downstream processing units which are certified under a different set of rules; another is that the decision should not affect existing certified palm oil purchase and sales contracts which have already been entered into prior to the suspension decision.”
Lee said that since the suspension, IOI has had several discussions with the complainant, conducted a four-day field verification visit with Global Environmental Centre (GEC) – a specialist firm in peat and high conservation value matters – and had started to implement the improvement measures suggested by GEC.
IOI grows and processes palm oil, with some 152,000ha of oil palm plantations in Malaysia and 83,000ha in Indonesia. It is also the largest oleochemical manufacturer in Asia, and has a speciality fats business operated under Loders Croklaan.
The RSPO said it would not comment on IOI’s announcement that it was dropping the lawsuit until the legal case was officially dropped in a conciliatory hearing scheduled for 14 June, the Guardian newspaper said.