-  The Press reported that Genting Plantations Bhd’s (GenP) membership in RSPO (Roundtable for Sustainable Palm Oil) has been suspended.

-  This is because GenP’s filing for new planting procedure in Indonesia was not submitted on time. GenP had notified RSPO that it would complete the filing by 1Q2014. Nevertheless, RSPO insisted that the information was not declared and suspended the group’s membership.

-  Currently, GenP is trying to submit the documents by the end of this month. According to the same article, RSPO requires new planting procedure documents to be filed by all members of RSPO for all new plantings after 1 January 2010.

-  GenP came under attack from Borneo Rhino Alliance, which said that the group did not declare its plans for palm oil expansion.

-  We believe that GenP’s membership is likely to be reinstated after it has submitted the relevant documents.

-  In any case, we reckon that there will not be any impact on GenP’s ability to sell its products although the group’s reputation may take a hit.

-  Currently, none of GenP’s plantation operations are certified by RSPO although the group is a member.

-  According to GenP’s Annual Report 2012, the group is retaining flexibility in the timeline to embark on a formal certification process as some of the RSPO principles and guidelines are still under revision.

-  Nonetheless in Indonesia, GenP is heading towards ISPO (Indonesia Sustainable Palm Oil) certification while in Malaysia, the group has taken active role in the development of MSPO (Malaysia Sustainable Palm Oil). GenP is represented in the National and Technical Committees of MSPO. We believe that MSPO would only be rolled-out next year. 

Source: AmeSecurities