A number of companies stopped purchasing palm oil from Sinar Mas after allegations by Greenpeace of rainforest destruction. (JG Photo/Safir Makki) |
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Swiss food
giant Nestle will resume purchases of palm oil from Sinar Mas Agro Resources
and Technology following an 18-month halt after Smart made improvements to
abide by Nestle’s guidelines for responsible environmental practices.
The parent
company of the palm oil producer known as Smart, Golden Agri Resources, has
been working with environmental group The Forest Trust on the implementation of
a Forest Conservation Policy. The plan would ensure that GAR has no
deforestation footprint and also seeks sustainable growth.
Based on
results of TFT assessments and GAR’s work in progress, “we have decided to
place an order with Golden Agri for our factory in Indonesia,” Nestle
Indonesia’s spokesman Brata T. Hardjosubroto said in a statement on Friday.
He said
that Smart, Indonesia’s second-biggest listed plantation operator, and GAR had
been making continuous progress and demonstrated clear action to meet Nestle’s
responsible sourcing guidelines.
Brata
lauded GAR’s new conservation policy, but he said that purchasing palm oil
would remain conditional on GAR and Smart’s commitment to sustainable
rainforest development.
The
spokesman added that a segregated supply chain has been established, ensuring
traceability of shipments from GAR plantations to the Nestle factory in Indonesia.
The full traceability of this supply chain has been checked by an independent
third-party auditing body, the TUV Rheinland Group.
Smart
president director Daud Dharsono confirmed that Nestle has placed an order to
resume palm oil purchases.
“We welcome
Nestle’s decision, which is an acknowledgement of our sustainability efforts,”
he said.
“This
represents an important milestone in our journey toward the continuous
production of sustainable palm oil.”
Nestle,
which started construction on its $200 million factory in West Java on Monday,
had dropped Smart as a supplier in March 2010. The company reinforced its
commitment to sustainable rainforests by stating in July that it was committed
to stop using products that contributed to the destruction of rainforests, and
entered a partnership with TFT.
The
decision came following campaigns by Greenpeace highlighting Nestle’s purchase
of crude palm oil from Sinar Mas Group, which Greenpeace accuses of destruction
of rainforests and peatlands to make way for new plantations.
Smart said
in its statement that it began complying with Nestle’s standards in late 2010,
when GAR developed a joint action plan with TFT to help GAR ensure that palm
oil delivered to Nestle would meet all requirements according to the guideline.
“We believe
the FCP is a strong platform in which all stakeholders can collaborate to find
solutions for sustainable palm oil,” Daud said.
Bustar
Maitar, the head of Greenpeace Indonesia’s forests campaign, said that
Greenpeace would give Smart a chance to show whether it would carry out its
stated FCP commitment.
“This is a
test of how serious GAR and Smart are in implementing the FCP. We will wait and
see,” Bustar said.
Other
companies that had stopped purchasing from Smart include Burger King, Unilever,
and Kraft.
These
companies had yet to announce whether they would resume purchases, but Bustar
said he expected that the other companies would follow suit.
“The other
buyers would monitor GAR’s and Smart’s commitment to the FCP before deciding on
resuming purchases. If GAR can meet its commitment, the others will likely join
Nestle,” he said.
Smart’s
shares rose 2.3 percent to Rp 6,650 on the Indonesia Stock Exchange on Friday.
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