Friday, 11 December 2009

‘Unacceptable practices’ see Unilever end Sinar Mas deal

‘Unacceptable practices’ see Unilever end Sinar Mas deal

The Jakarta Post , Jakarta | Fri, 12/11/2009 10:22 PM | Business

Anglo-Dutch company Unilever has suspended all future purchases of palm oil from Indonesia’s PT SMART, a subsidiary of the Sinar Mas Group, citing the supplier’s failure to meet the “highest possible” sustainability standards.

The company said in a statement issued Friday that the suspension would remain in place until SMART could provide verifiable proof that none of its plantations contributed to the destruction of high conservation value forests or expanded into peatlands.

Unilever said that over the past 18 months, it had been scrutinizing the activities of its suppliers to verify their compliance with standards set by the Roundtable on Sustainable Palm Oil (RSPO).

The RSPO, which also includes Sinar Mas, is a self-regulating body aimed at preventing illegal forest clearance. Environmental groups have criticized it as toothless and an obstacle to independent scrutiny.

The Times reported Friday that Unilever decided to suspend the annual contract worth £20 million (US$32.5 million) after it had obtained photographic evidence of Sinar Mas clearing protected rainforests, including reserves for Indonesia’s endangered orangutan population.

The environmental NGO Greenpeace published this week a report detailing serious allegations against Sinar Mas’ environmental practices. Following up on the report, Unilever decided to take immediate action.

Sinar Mas managing director Gandhi Sulistyanto condemned Greenpeace for its actions, saying the group was being steered by other stakeholders with vested interests in undermining the company.