Thursday, 8 April 2010

Audit result on SMART due in June

Audit result on SMART due in June

Mustaqim Adamrah , The Jakarta Post , Jakarta Thu, 04/08/2010

Crude palm oil producer PT Sinar Mas Agro Resources and Technology (SMART) expects the verification work on allegations that it illegally destroyed forests would be finished by the end of this June.

“We have delivered the terms of reference [for the verification] to the two consulting firms … we still need to arrange some details,” SMART president director Daud Dharsono told reporters on Wednesday following a meeting with Trade Ministry officials and executives of the Netherlands-based consumer goods producer Unilever.

“Therefore, we hope the verification will be completed within the next eight to 12 weeks — by the end of June,” he added.

For the verification process, SMART has appointed two independent consultants, Control Union Certification (CUC) of the Netherlands and the British Standards Institute Group (BSI) through their representative offices in Kuala Lumpur, Malaysia, and in Singapore, respectively.
Results of the verification are expected, as SMART says, to help “clarify” environmental issues raised by the environmental group Greenpeace.

In a 2008 Greenpeace report, the organization indicated that CPO producers had converted peat lands, natural forests and habitats of Indonesia’s indigenous orangutan into oil palm plantations. The report was later supported by a field investigation and satellite data.
Greenpeace has since urged CPO buyers, such as Switzerland-based food producer NestlĂ©, the Unilever group and the US-based company Cargill — producer and marketer of food, agricultural, financial and industrial products and services — to stop buying CPO from producers disregarding sustainable plantation practices required by the Roundtable on Sustainable Palm Oil (RSPO) sponsored by producers and buyers.

After this report Unilever suspended in December last year all future purchases of 47,000 tons of CPO per year worth approximately US$33 million from SMART and decided two months later to no longer source palm oil from Indonesian supplier Duta Palma.

Following the decision of Unilever, Nestle, which consumes 4,000 tons of CPO a year, joined the move last month, deciding also to stop buying CPO from SMART.

Local producers now fear other large international CPO buyers such as Cargill, Loders Croklaan, Kraft and Shell could also terminate their contracts with SMART.

Meanwhile, Unilever Indonesia corporate secretary Sancoyo Antarikso said Unilever would wait for the results before deciding whether to resume buying CPO from SMART.

Indonesia is the world’s largest CPO producer and exporter, with total production reaching 20.2 million tons last year.