Thu, 08 Apr 2010

From: The Jakarta Globe

By Arti Ekawati
PT Unilever Indonesia said on Wednesday it would consider resuming purchases of crude palm oil from the Sinar Mas Group after reviewing the conclusions of two studies of the producer’s environmental practices.

“If the [assessment] teams say there was no evidence of deforestation by Smart [PT Sinar Mas Agro Resources and Technology] in producing its CPO, or if there was indeed evidence of deforestation but Smart has already made the necessary improvements, we will consider buying from Smart again,” said Sancoyo Antarikso, corporate secretary and general manager for external relations at Unilever Indonesia, after a meeting with Smart executives at the Ministry of Trade.

Sinar Mas last week announced it had appointed Netherlands-based Control Union Certification and London-based British Standards Institution Group to verify allegations by Greenpeace that Sinar Mas destroyed tropical rainforests to create palm oil plantations.

In an August 2008 report called “Burning up Borneo,” Greenpeace accused Sinar Mas of destroying rainforests, the habitat of orangutans, in the production of crude palm oil. Unilever announced in December that it would stop buying palm oil from the group and Nestle followed suit last month. US food giant Cargill said it would do the same if Greenpeace’s claims prove true.

Sinar Mas has denied the Greenpeace allegations.

Speaking after the meeting at the Trade Ministry, Smart president director Daud Dharsono said the two assessment bodies were expected to complete their work by the end of June.

He added that the bodies were recognized by the Roundtable on Sustainable Palm Oil, a trade body of producers and buyers formed “with the objective of promoting the growth and use of sustainable oil palm products,” according to its Web site.

Greenpeace has said it doubts the assessments will be neutral, according to a Bloomberg report last week.

Deputy Trade Minister Mahendra Siregar said the ministry was facilitating talks between the two companies because crude palm oil is one of the country’s major export commodities.

“The case may not have a significant impact on Sinar Mas but we consider palm oil an important strategic commodity for boosting our economy,” Mahendra said, saying 4 million people were directly employed in the palm oil sector.

Mahendra added that other palm oil producers should learn from Sinar Mas’s experience.

Daud said Unilever, the world’s biggest buyer of crude palm oil, accounted for about 3 percent of Smart’s sales of the commodity, while Nestle made up 0.2 percent.