Cargill Warns Sinar Mas Over Illegal Logging Claim
Agribusiness giant Cargill threatened to delist Indonesian palm oil firm Sinar Mas as a supplier if it fails to address allegations of illegal logging lodged by Greenpeace, a Cargill website statement said.
Top European palm oil buyers such as Unilever and Nestle have already said they would stop buying palm oil from Sinar Mas after Greenpeace released a report about forest clearing and Sinar Mas. A statement posted on the Cargill website said the firm had asked the secretariat of the Roundtable on Sustainable Palm Oil (RSPO) - an industry body of planters and green groups - to investigate the allegations made by Greenpeace "about illegal forest clearance and the Indonesian palm oil company, Sinar Mas."
"We are continuing to follow this closely and hope to see a reply from Sinar Mas by the end of April 2010," the undated statement said. "If the RSPO validates the allegations of improper land conversion or illegal planting in deep peat land as alleged in the Greenpeace report and Sinar Mas does not take corrective action, we will delist them as a supplier."
Daud Dharsono, the president director of Sinar Mas, said on Thursday he was aware of Cargill's position and that a team of consultants would be appointed soon to investigate the claims made by Greenpeace.
"We are in the process of discussion on appointing the independent consultants and hopefully, by the end of this week or early next week at the latest, we will announce them," he told Reuters by phone. Dharsono declined to reveal the value of the Cargill contract, saying only that "all of our customers are important to us."He said he was not aware of any other company considering delisting Sinar Mas as a supplier.
Forest preservation is seen as key to slowing global warming because trees soak up carbon dioxide, one of the main greenhouse gases. Sinar Mas said in a statement issued in February that it was committed to reducing its greenhouse gas emissions and would not clear land with high carbon stock such as peat land and primary forests. Bustar Maitar, an Indonesia-based Greenpeace forest campaigner, called on Cargill to drop Sinar Mas immediately rather than wait for the results of the investigation.
"We believe the evidence is there already. Cargill is one of their biggest customers, we believe," he told Reuters by phone. "Sinar Mas said they have made a commitment but what is happening in the field is business as usual. Nothing has changed."
Maitar said Greenpeace was urging palm oil buyers to drop third party suppliers that source their palm oil from Sinar Mas as well.
"We want them dropped from their entire supply chain," he said. "And any other buyers out there, if they receive Sinar Mas palm oil, there is a possibility we will target them also in our campaigns if they are not also considering how to protect Indonesian forests." Sinar Mas, owned by the Widjaja family, controls Jakarta-listed PT Sinar Mas Agro Resources and Technology Tbk, known as SMART, and Singapore-listed Golden Agri-Resources. Aside from its palm oil interests, it has pulp and paper, finance, and property businesses in Asia.
