Nestle says drops palm oil supplier after report

Catherine Hornby, Reuters 17 Mar 10;

AMSTERDAM (Reuters) - Nestle, the world's biggest food group, said it had stopped buying palm oil from Indonesia's Sinar Mas due to concerns about rainforest destruction, following a similar move by consumer goods firm Unilever.

Nestle's announcement came after Greenpeace released a report on Wednesday which looked into how the company was sourcing palm oil.

Switzerland's Nestle, which uses the edible oil in its food products such as KitKat bars, said it had replaced Sinar Mas with another supplier for further shipments after conducting its own investigations into its palm oil supply chain.

"We will continue to pressure our suppliers to eliminate any sources of palm oil which are related to rainforest destruction and to provide valid guarantees of traceability as quickly as possible," Nestle said in a statement.

It added that it had only bought from Sinar Mas for manufacturing in Indonesia, and no palm oil bought from Sinar Mas had been used by Nestle for manufacturing in any other country.

Environmentalist group Greenpeace highlighted the practices of Nestle's suppliers' and their impact on rainforests, peatlands and the habitat of endangered orangutans in their report on Wednesday.

Anglo-Dutch Unilever, the world's largest user of palm oil, said in December it had suspended purchases from Sinar Mas on similar concerns.

Greenpeace alleges that Sinar Mas, Indonesia's biggest palm oil producer and the second biggest in the world, has been responsible for widespread deforestation and peatland clearance, practices which release vast amounts of carbon dioxide.

Sinar Mas was not immediately available for comment on Wednesday. It has previously denied that its activities are damaging for the environment and in December it invited Unilever to inspect its operations.

Nestle has said it aims to only use palm oil that is certified as sustainable by 2015.

(Reporting by Catherine Hornby; editing by James Jukwey)


Nestle drops Indonesian company after Greenpeace demos
Alvin Darlanika Soedarjo Yahoo News 18 Mar 10;

JAKARTA (AFP) – Indonesian palm oil giant Sinar Mas rejected claims of environmental vandalism Thursday after Nestle, the world's biggest food company, dropped it as a supplier following protests by Greenpeace.

It was the second embarrassing blow to Sinar Mas in three months after Anglo-Dutch company Unilever severed ties with it in response to Greenpeace claims it is destroying rainforests.

Greenpeace activists held protests Wednesday at Nestle?s headquarters and factories in Britain, Germany and the Netherlands, linking the company's Kit Kat confectionery to the destruction of orangutan habitats.

"Considering its size and influence, it should be setting an example for the industry and ensuring its palm oil is destruction free," Greenpeace said in a statement.

"Instead, Nestle continues to buy from companies, like Sinar Mas, that are destroying Indonesia?s rainforests and peatlands."

Rampant deforestation in Indonesia makes it one of the biggest emitters of greenhouse gases in the world and threatens habitats of endangered species like orangutans, tigers and rhinos.

Nestle responded immediately to the protests, dropping Sinar Mas and repeating its commitment to using only Certified Sustainable Palm Oil by 2015, "when sufficient quantities should be available".

"Nestle has replaced the Indonesian company Sinar Mas as a supplier of palm oil with another supplier for further shipments," it said.

"We confirm that Nestle has only bought from Sinar Mas for manufacturing in Indonesia, and no palm oil bought from Sinar Mas has been used by Nestle for manufacturing in any other country."

Sinar Mas Agro Resources and Technology (SMART) president director Daud Dharsono denied that its palm oil plantations were damaging the environment.

"We are committed to applying responsible land clearing and best practices in our plantations. We've been implementing best practices since the early 1980s," he told AFP.

"We're ready to have a dialogue with Greenpeace to clarify their report. However, we haven't received any official notification from Nestle that it has dropped us as their supplier of palm oil," he added.

Greenpeace Southeast Asia campaigner Bustar Maitar said Nestle must also stop buying Sinar Mas's palmoil from third parties.

"Despite their announcement cancelling their direct orders with Sinar Mas, Nestle will still be using palm oil from Sinar Mas in Kit Kats because they?ll still be getting it from their other suppliers," he said.

"The Greenpeace campaign will continue until Nestle cuts the Sinar Mas group from its supply chain completely."

Indonesia is the world's biggest producer of palm oil, which is used in the manufacture of products including margarine, soups, ice-cream, chocolates and beauty products.

Indonesian officials have said they aim to more than double the country's crude palm oil output to 40 million tonnes by 2020 through increased yields and more plantations.

The plans have been opposed by environmental groups, who say the nation's forests are vital carbon sinks in the fight against climate change and an irreplaceable source of biodiversity.

Of the 45 million tonnes of annual, global crude-palm-oil output, only 2.3 million tonnes has been certified by the palm oil watchgroup Roundtable for Sustainable Palm Oil as having been produced through sustainable methods.

Of the 2.3 million tonnes, Indonesia accounts for only 400 tonnes.