Indonesia palm oil giant says cleared of Greenpeace claims

(AFP) Google News 10 Aug 10;

JAKARTA — Indonesia's biggest palm oil producer said Tuesday it had been cleared of allegations made by environmental group Greenpeace that it had destroyed high conservation-value forests on Borneo.

A report commissioned by SMART, part of the Singapore-listed Sinar Mas agri-business group, found that it was not to blame for widespread destruction of Borneo's forests as repeatedly alleged by Greenpeace, the company said.

"The report concluded that the allegations were largely unfounded and that SMART was not responsible for deforestation of primary forests and the destruction of orangutan habitats," said SMART president Daud Dharsono.

The investigation was carried out by Control Union Certifications and BSI Group.

SMART, the Indonesian palm oil unit of its Singapore-listed parent company Golden Agri Resources (GAR) and part of the Sinar Mas agri-industry empire, commissioned the probe in February after the claims were first made by Greenpeace.

Greenpeace accuses SMART of widespread forest destruction, including clearing primary forests and peatland.

GAR has lost major clients including Unilever, Kraft and Nestle over environmental concerns.

SMART'S Dharsono said Tuesday, "All the land in the 11 concessions examined comprised of secondary forests, degraded and shrub land and were no longer primary forests before SMART started land clearing and planting."

He acknowledged that there were some plantations on peatland but "not as extensively as claimed" by Greenpeace, with just "1.8 percent cultivated on total concessions".

However, Greenpeace Indonesia forest campaigner Bustar Maitar replied that SMART's own audit "largely confirmed Greenpeace's finding" that the company cleared peatland and primary forests.

"They misinterpreted the audit result," he said. "It confirms that the company has been operating without the necessary permits and has been clearing deep peat illegally."

Following the report, SMART "has not yet decided to take a legal action" against Greenpeace, Dharsono added.

Indonesia is considered the world's third-biggest emitter of greenhouse gases, mainly through deforestation, much of which is carried out illegally with the alleged connivance of officials and security forces.

Indonesian SMART Gets Mixed Score In Green Audit
Sunanda Creagh and Fitri Wulandari PlanetArk 11 Aug 10;

Indonesian palm oil giant PT SMART Tbk on Tuesday got a mixed score card in an environmental audit, leaving in doubt whether key buyers including Unilever will renew contracts with the firm.

Both SMART, which is part of Singapore-listed Golden Agri-Resources, and leading critic Greenpeace claimed victory after the audit said SMART had not destroyed primary forest but had planted in greenhouse gas-rich peatlands.

The bitter dispute shows the difficulties for Indonesia of spurring economic growth and slashing emissions as the world's top palm producer eyes hungry Asian consumers and eco-conscious Westerners for an oil used to make biscuits and biodiesel.

"This is a positive result for palm oil firms, especially SMART and Golden Agri, and I think this is going in the right direction for them to convince their EU buyers," said Miang Chuen Koh, a Singapore-based plantation analyst at Morgan Stanley.

Greenpeace has said in a series of reports released since last year that the firm was clearing peatland and high conservation value forests, which shelter endangered species such as orangutans and trap vast amounts of climate-warming gases.

Unilever and Nestle dropped SMART as a supplier following the Greenpeace reports, while Cargill had threatened to do the same if the accusations proved correct in the audit SMART commissioned and paid for in response to Greenpeace claims.

A spokesman for SMART said he was confident the firm would win back Nestle and Unilever. SMART said the two firms represented 4-5 percent of its revenue.

Unilever on Tuesday welcomed the report but said the group needed to obtain certification from the Round Table on Sustainable Palm Oil (RSPO) -- an industry body of planters, green groups and consumers -- before Unilever would start buying from them again.

The auditors, Control Union Certification and BSI Group, were paid for by SMART, after being approved by the RSPO.

The audit covered only 40 percent of SMART's total planted area of 430,000 hectares, not including its plantations in Papua. It used satellite images, land surveys, soil analysis and interviews with officials for the findings.

"Planting on peatlands and deep peat were found but not as extensively as claimed," the audit said, adding such planting was mainly incidental but broke Indonesian law and SMART's own rules.

The firm's share price was little changed after the audit, down 1.4 percent, though the stock has rallied 39 percent this year to beat strong gains in the Jakarta index, showing investors retain confidence in the firm's outlook.

NOT PERFECT

Greenpeace said in a statement that the audit showed SMART was illegally clearing deep peat and operating without permits, and it was now up to the Indonesian government to respond.

"SMART is not perfect," SMART's chief executive Daud Dharsono told reporters after the audit. "It's very difficult to detect deep peat plots that are small and sporadic," adding the firm would repair damaged peatlands.

Peatlands release huge amounts of greenhouse gases when cleared or drained, and the deforestation of Indonesia's extensive tropical forests led the World Bank to name it the world's number three emitter in a 2007 report.

Indonesia has promised to cut greenhouse emissions by as much as 41 percent from business-as-usual levels by 2020 from curbing deforestation, but resource exports have driven its economy.

SMART told Reuters in an interview this month it will not be affected by the Greenpeace campaign or a planned two-year government moratorium on new permits to clear natural forest, and plans to expand its plantations this year [ID:nJAK13839].

SMART runs the Indonesia palm oil operations of its Singapore-listed parent company Golden Agri-Resources (GAR). GAR is controlled by the Widjaja family, whose business empire Sinar Mas has interests in pulp and paper, finance and property.

(Editing by Sara Webb and jonathan Thatcher)


Greenpeace's claims 'unfounded'
Grace Chua Straits Times 11 Aug 10;

CLAIMS by Greenpeace that logging in Indonesia by a unit of Singapore-listed Golden Agri-Resources had led to deforestation have been rebutted by an independent study.

According to PT Smart, which operates all oil palm plantations for Golden Agri, a review by certification bodies Control Union Certification and BSI Group plus Indonesian forestry experts has ruled that the environmental group's claims were unfounded.

The certification bodies were hired by the palm oil producer shortly after Greenpeace claimed the company was clearing forests without permits and developing peatlands - an important sink for carbon dioxide, a greenhouse gas - contributing to global warming. The environmental group also said the firm's actions had led to the destruction of orang utan habitats.

The Greenpeace accusations, dating back to 2008, led Unilever and Nestle - who together account for 4 per cent to 5 per cent of PT Smart's revenue - to suspend contracts with PT Smart.

And agricultural giant Cargill threatened to boycott PT Smart if the Greenpeace claims were found to be correct.

Responding to the PT Smart statement yesterday, a Unilever spokesman said the firm would need to study the report before it could decide on further action.

'The verification exercise by PT Smart is a good first step, but the proof of the pudding is in the firm's actions,' said its corporate relations director Sher Mazari.

He added that palm oil companies could take steps to certify their palm oil as sustainable, and boost transparency by publicising the locations of their land concessions.

The review of PT Smart's activities looked at 11 concessions in West and Central Kalimantan, which cover some 180,000ha and were the target of Greenpeace's claims.

It found that forest clearing took place before the unit acquired the concessions and that there was no evidence of forest burning by the firm.

But in the six Central Kalimantan concessions inspected, PT Smart began clearing forests before an environmental impact analysis was completed.

And the report 'could not adequately conclude that there was no negative social impact to local communities' from PT Smart's land acquisition.

The verification team also found about 3,200ha of peatland had been developed, which went against company policy.

PT Smart said it took 'serious action' against policy violations, such as suspending plantation managers.

Greenpeace contested PT Smart's interpretation of the report yesterday, calling its press briefing 'greenwashing' and saying that the verification exercise had in fact confirmed its own findings.

Indonesia APP Says Audit Shows Deforestation Claim Untrue
PlanetArk 12 Aug 10;

Indonesian paper firm Asia Pulp and Paper (APP) on Wednesday released an audit it said showed allegations it destroyed rainforest were baseless and invalid.

The audit marks the latest chapter in an increasingly bitter dispute between environmentalists and the plantation industry over Indonesian forests, which trap huge amounts of climate-warming greenhouse gases.

French retailer Carrefour said last month it would stop buying certain APP products, a day after Greenpeace released a report accusing the paper firm of planning to destroy vast areas of Indonesian rainforest. APP described the allegations as 'ridiculous'.

Following other allegations of forest destruction by another conservationist group, WWF, APP produced a report that it said refuted the claims and had been checked by audit company Mazars.

"The audit conducted by Mazars found that the facts contained in the APP report were accurate and, therefore, the allegations made by the environmental NGOs were indeed baseless, inaccurate and without validity," the report said.

"APP is making efforts to reduce its environmental impact" by undertaking carbon footprint calculations in its mills and preserving tracts of valuable forest," their report said.

Greenpeace forest campaigner, Bustar Maitar, said the audit was "just greenwashing."

APP is part of the Sinar Mas empire founded by the Widjaja family, which also runs Golden Agri-Resources, the parent company of palm oil firm PT SMART Tbk.

SMART, which has been the target of a series of Greenpeace reports accusing it of clearing high conservation forest in Kalimantan, released an audit on Tuesday that partially cleared it of the allegations.

Big palm oil buyers Nestle and Unilever, which stopped buying SMART products after the Greenpeace reports came out, are yet to say if they will renew contracts following the audit's release.

(Editing by Alison Birrane)