Indonesian Planter Sinar Mas to Seek Review of Greenpeace Accusations of

March 25, 2010
Bloomberg & Jakarta Globe

Indonesian Planter Sinar Mas to Seek Review of Greenpeace Accusations of
Sinar Mas Group, the palm oil producer losing customers amid allegations it has destroyed rain forests, said it plans to appoint independent groups to assess the claims made by Greenpeace.

“We are currently engaging independent external certified bodies to verify the Greenpeace reports,” Fajar Reksoprodjo, corporate communications manager at PT Sinar Mas Agro Resources and Technology, a unit of Sinar Mas, wrote in an e-mail on Thursday.

Nestle, the world’s biggest food group, and Unilever stopped buying palm oil from Sinar Mas after the Greenpeace report, in decisions described as unfair by the Indonesia Palm Oil Association (Gapki). Cargill has also said it may stop buying from Sinar Mas if the environmental claims are correct and Sinar Mas takes no action. Indonesia is the biggest palm oil supplier.

“We have reiterated our commitment not to develop areas” that have “high carbon stock and conservation value,” Reksoprodjo wrote in the e-mail, sent in response to questions. Unilever accounted for about 3 percent of sales, while Nestle bought 0.2 percent, the e-mail said.

In a related development, the Ministry of Agriculture plans to meet with officials from 18 of the country’s palm oil companies to seek ways to deal with the latest campaign against the country’s palm oil producers.

Achmad Mangga Barani, the ministry’s director general of plantations, said on Thursday that the government was concerned that the move by Nestle to stop buying Sinar Mas’ palm oil could have a systemic impact on the local industry.

“We’ll hold the meeting on Monday,” Achmad said, adding that the participants would include PT Bakrie Plantation, PT London Sumatera Plantations, PT Sampoerna Agro, Sinar Mas, PT Wilmar International and state-owned companies PT Perkebunan Nusantara IV, V and XIII.

“Basically we want to discuss what steps need to be taken next to cope with the continuously negative campaign,” Achmad said.

What happened to Sinar Mas could also hit other companies, he warned.

Palm oil is Indonesia’s most reliable export commodity. It is exported worldwide, especially to China, India and Europe, for basic ingredients of food and cosmetic industries. The total plantation area has grown dramatically, from 1.13 million hectares in the late 1980s to about 7.13 million hectares at present.

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