London Sumatra assures tainted CPO not for human consumption

JAKARTA (JP): PT PP London Sumatra Indonesia Tbk assured the public on Tuesday that some 1,400 metric tons of contaminated crude palm oil it has put up for sale would not be sold for human consumption.

London Sumatra corporate secretary Lauw Lie Hung told The Jakarta Post on Tuesday that derivate crude palm oil (CPO) products could be used in the cosmetics industry.

"We have some potential buyers who could resell the CPO to nonfood industries," Lauw said.

London Sumatra has sent a letter inviting potential buyers to bid for the CPO, which has been contaminated by diesel oil. The companies include PT Smart, PT Prima Palm Indah, PT Alam Tirta Sari, PT Pacific Medan Industri, PT Sumatra Oils and PT Alam Tirta Sari.

London Sumatra conducted tests on its CPO stored at PT Deli Tama Indonesia storage tanks in Belawan port, North Sumatra, following reports in Rotterdam, the Netherlands, that some 85,000 tons of Indonesian CPO originating from Deli Tama Indonesia tanks had been contaminated by diesel oil.

The discovery virtually halted Indonesia's CPO exports to Europe, and prompted the government to launch an investigation into the matter.

The Netherlands' National Institute of Public Health and the Environment certified that the level of contamination in the Indonesian CPO posed negligible risk to public health.

London Sumatra said that following lab tests in Singapore, 523 tons of the contaminated CPO contained a 52 parts per million (ppm) hydrocarbon level, another 238 tons had a 221 ppm level and 710 tons had a 65 ppm level.

The company had an additional 3,100 tons of tainted CPO at Belawan, which will also be put up for sale or perhaps even exported, Lauw said.

Traders and CPO processing companies in Medan were, however, are surprised that London Sumatra will still sell its CPO kept in the Deli Tama Indonesia tanks, which have been ascertained to be the source of contamination.

Lauw claimed that London Sumatra, which exports half of its 120,000-ton annual CPO production, had switched to PT Prima Palm Indah and PT Belawan Tangki Indonesia to store its CPO in Belawan.

Listed on the Jakarta Stock Exchange since 1996, London Sumatra was founded in 1962 and operates oil palm, rubber, tea and coffee plantations in various provinces of Indonesia. It is 60.62 percent owned by PT Pan London Sumatra Plantation, 20.21 percent by Happy Cheer Limited and 19.17 percent by the public.

Separately, the House of Representatives said on Tuesday that it would send a team to Medan on Dec. 27 to investigate how the contamination happened and find the responsible parties.

Bachtiar Chamsyah, chairman of House Commission V for trade and industry, said the team would consist of 10 people, including an official from the Ministry of Industry and Trade, a member of the state plantations joint marketing agency and a member of the state plantations board of councilors.

The team will spend between five and 10 days in Medan and then return to Jakarta to analyze the facts before issuing a recommendation to the government, he said.(03)