Palm Oil Body RSPO Rebukes Indonesia's Smart On Sustainability Claims
September 23 2010 - 5:18AM
Dow Jones News
The Roundtable On Sustainable Palm Oil, an industry organization
that groups palm producers, environmental groups and food
companies, said Thursday that Indonesia-based Sinar Mas Agro
Resources & Technology (SMAR.JK) has breached its policies and
that the firm's membership in the group is at risk.
"Members who have been found to not be in compliance and who
continue to be in noncompliance with the RSPO regulations could
ultimately face sanctions, including the suspension and,
eventually, the termination of their membership of the RSPO," it
said.
The comments by RSPO could diminish Smart's hopes that global
conglomerates could resume purchases of palm oil products from the
company. Global food giants Nestle SA (NESN.VX) and Unilever NV
(UN), as well as U.S.-based fast food chain Burger King Holdings
Inc. (BKC), are on the long list of food companies that has
suspended sourcing of palm oil from Smart in response to claims by
Greenpeace that the producer is involved in deforestation.
In August, Smart issued results from an independent
audit--carried out by the Control Union Certification and the
British Standard Institute--refuting charges by environmental group
Greenpeace that it had cleared large swathes of land with high
conservation value and drained peat lands to cultivate palm
crop.
Smart said the audit provided evidence that "the firm had
operated responsibly and within the laws and regulations set out by
the Indonesian government," but BSI said subsequently that some
aspects of its report were misreported, and that Smart had set up
plantations on deep peat in two estates.
RSPO said on its website that its grievance panel had written to
Smart and its parent firm, the Singapore-listed Golden Agri
Resources Ltd (E5H.SG), about the breaches revealed by the
auditors. Golden Agri is not a member of the RSPO.
The industry body has urged Golden Agri to stop announcing
publicly it was in the process of obtaining RSPO certification for
its estates or that it planned to become a RSPO member.
"Golden Agri is not a member of the RSPO, nor has the RSPO yet
received a membership application from the company. The panel
encourages Golden Agri to submit a full and complete application
for membership (and) documentation RSPO would need in order to
review the application," the agency said.
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com
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