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Palm oil producers from Malaysia and Indonesia have set up industry group late Monday as part of its plan to step up their efforts to improve communication and palm oil's image during a wave of negative publicity by environmental groups.

The newly formed group, the Indonesia Malaysia Palm Oil Group (IMPOG) will "focus on research and development, sustainability-related issues and communications to stakeholders," it said in a statement.

The meeting, a follow-up from a collaboration agreement signed early March between the Malaysian Palm Oil Association, the Indonesian Palm Oil Association and other plantation organizations, had generated much speculation in the industry that today's meeting would be the precursor to setting up an alternative certification body to the RSPO as some among the palm oil producers, especially those from Indonesia, felt the RSPO weren't able to serve their cause.

Industry executives at the closed-door meeting said, however, producers agreed instead to "engage with RSPO for a more practical and implementable scheme and didn't discuss any alternative sustainability certification scheme for palm oil."

The palm oil industry came under scrutiny after environmental group Greenpeace charged Jakarta-listed PT Sinar Mas Agro Resources and Technology (PT SMART) (SMAR.JK) and Singapore-listed Golden Agri-Resources (E5H.SG) for not following sustainable plantation practices.

At the RSPO annual meeting last November, some Indonesian growers had threatened to stage a walk-out if the certification body had agreed demands by the E.U. and environmental groups to add conditions such as greenhouse gas emissions to the already stringent certification process.

By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com

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