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Sinar Mas Says Greenpeace Deforestation Allegations 'Unfounded'
2010-08-10 11:34:34.498 GMT
By Yoga Rusmana
Aug. 10 (Bloomberg) -- An independent study cleared Sinar
Mas Group, the world's second-biggest palm oil producer, of
destroying rainforests in Indonesia, according to a statement
from PT Sinar Mas Agro Resources and Technology Tbk.
The report, by Control Union Certifications and BSI Group,
"demonstrates that the environmental campaigner was wrong in
much of its campaign and exaggerated throughout," PT Sinar Mas
Agro, said in a statement. Sinar Mas Agro, also known as PT
SMART, is a unit of Singapore-listed Golden Agri-Resources Ltd.,
part of Sinar Mas Group.
Nestle SA, the world's biggest food maker, Unilever and
Spanish energy company Abengoa SA stopped buying palm oil from
Sinar Mas after Greenpeace said that the company was
contributing to climate change and destroying the habitat of
Sumatran tigers. The environmental group also lobbied Wal-Mart
Stores Inc., the world's largest retailer, and Yum! Brands Inc.
to stop buying from Sinar Mas Group's pulp paper unit.
"The report concluded that the allegations made were
largely unfounded and that SMART was not responsible for
deforestation of primary forests and the destruction of orang
utan habitats," according to today's company statement. The
study also found PT SMART complied with Indonesian law, it said.
Control Union and BSI Group are certification bodies
approved by the Roundtable on Sustainable Palm Oil, according to
the roundtable's website. The Kuala Lumpur-based group is a
trade body of producers and buyers set up to promote the
"growth and use of sustainable oil palm products," according
to the website. Unilever and Nestle are members.
Report's Findings
"All the land in the eleven concessions examined comprised
of secondary forests, degraded and shrub land and were no longer
primary forests before SMART started land clearing," according
to a copy of the Control Union and BSI Group report that was
posted on the PT SMART website. "Planting on peat lands and
deep peat were found but not as extensively as claimed."
"They are trying to greenwash their image," said Bustar
Maitar, Greenpeace's Southeast Asia forest team leader,
according to an e-mailed statement. The report "is a poor
attempt at brand protection that does nothing to challenge
Greenpeace's findings," Maitar said.
While the report is a "good start", it is not sufficient
for Unilever to resume business with Sinar Mas, the London- and
Rotterdam-based company said today. "We want our suppliers to
really work with us toward attaining 100% sustainable palm oil
by 2015 and require concrete and verifiable actions that
demonstrate progress," it said in a statement.
Biggest Producer
PT SMART has gained about 30 percent this year in Jakarta
trading, compared with the 21 percent gain in the benchmark
index, and traded at 3,500 rupiah at 12:20 p.m. in Jakarta.
Golden Agri-Resources has climbed about 17 percent this year,
and was at 59.5 Singapore cents at 3:26 p.m. in the city-state.
Indonesia is the world's biggest producer of palm oil, used
in foods, as a cooking oil and a fuel additive. The commodity
surged 57 percent last year on the Malaysia Derivatives Exchange
as the global recovery boosted demand, and traded today at 2,690
ringgit ($853) a metric ton. Malaysia is the number-two grower.
Cargill Inc., the largest U.S. agricultural company, also
said that it may stop doing business with the Indonesian company
if the claims were correct and it took no action.
Unilever accounted for about 3 percent of Sinar Mas's palm
oil sales, and Nestle 0.2 percent, PT SMART said on March 25.
Greenpeace first made the claims against Sinar Mas in an
April 2008 report titled "Burning up Borneo."
For Related News and Information:
Stories on palm oil markets: TNI PALMOIL AGMARKET BN <GO>
Top environment stories: NI ENVTOP <GO>
Top commodities stories: NI CMDTOP <GO>
Stories on energy from agriculture: TNI AGR ALTNRG BN <GO>
Stories on alternative energy: NI ALTNRG BN <GO>
Crop calendar: CCAL PALM OIL <GO>
Stories on Indonesia's palm oil: TNI INDO PALMOIL BN <GO>
--Editors: Jake Lloyd-Smith, James Poole
To contact the reporter on this story:
Yoga Rusmana in Jakarta at +62-21-2355-3021 or
yrusmana@bloomberg.net
To contact the editors responsible for this story:
James Poole at +65-6212-1551 or
jpoole4@bloomberg.net;
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net
