http://www.thejakartaglobe.com/business/audit-says-smart-did-not-clear-indonesian-forests/390571
Audit Says Smart Did Not Clear Indonesian Forests Reuters & Eny Wulandari | August 11, 2010 Jakarta. Indonesian palm oil giant Sinar Mas Agro Resources and Technology on Tuesday got a mixed report from an independent environmental audit of its forestry practices, leaving in doubt whether key buyers would 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 determined Smart had not destroyed primary forest but had planted in greenhouse gas-rich peatlands. The bitter dispute shows the difficulties Indonesia faces as it tries to spur economic growth and simultaneously slash emissions. As the world's top palm producer, Indonesia is attempting to serve hungry Asian consumers and eco-conscious Westerners with 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, an analyst at Morgan Stanley. The dispute started last year when Greenpeace began releasing a series of reports accusing the firm of clearing peatland and high conservation-value forests, which shelter endangered species like orangutans and trap vast amounts of climate-warming gases. The claims led to major palm oil buyers such as Nestle and Unilever cutting their contracts with Smart. In response, Smart paid Control Union Certification and the BSI Group, as well as two experts from the Bogor Agriculture Institute (IPB), to investigate Greenpeace's claims. CUC and the BSI Group are both approved by the Round Table on Sustainable Palm Oil, an industry body of planters, consumers and green groups. On Tuesday, the team said it had discovered no evidence of Greenpeace's claims that Smart had burned forests to make way for palm oil plantations. While Smart said the report proved Greenpeace's allegations were exaggerated or wrong, it wasn't all good news. The audit found that 1.8 percent of the 11 cleared areas had been peatlands. The remaining 98 percent were degraded areas, it added. "Planting on peatlands and deep peat was found, but not as extensively as claimed," the audit said, adding the violations were mainly incidental, but broke Indonesian law and Smart's own rules. Daud Dharsono, Smart's president director, maintained that his company had unintentionally used peatlands. "The peatlands were few and scattered, making it difficult to detect them," he said, pledging his firm would not plant on peatlands in the future. Greenpeace campaigner Bustar Maitar said the report confirmed suspicions that Smart had violated regulation forbidding planting on peatlands. "I urge the government to start reviewing licenses for companies that are proven to have breached local laws," Bustar said. The audit, which was conducted from May 17 to June 8, covered only 40 percent of Smart's total planted area of 430,000 hectares, a figure which doesn't include its plantations in Papua. The audit team also found determined that Smart's palm oil business did not create conflict with indigenous populations, who reportedly welcomed income from the company. Unilever, the world's top palm oil buyer, welcomed the audit results. But Sher Mazari, Unilever's corporate relations director for Asia, said Smart needed to obtain an RSPO certification before Unilever would resume purchasing from it. Agribusiness giant Cargill said on Tuesday that it would study the report to decide how to proceed. "We've been monitoring this process closely and encouraging both Smart and the RSPO to be transparent in the process. We have not yet had the opportunity to review these audit results in detail," Cargill spokeswoman Marethe Sambe told Reuters. Indonesia has promised to cut greenhouse emissions by as much as 41 percent from business-as-usual levels by 2020 by curbing deforestation. Related articles Indonesian Sinar Mas-Linked Firms Cutting Virgin Rain Forest: Greenpeace 9:59am Jul 29, 2010 Greenpeace Names and Shames Companies over Indonesia Paper 12:24pm Jul 6, 2010 Greenpeace Protest Camp Destroyed in Suspicious Fire 11:44pm Apr 11, 2010 Greenpeace Rejects Sinar Mas Rainforest Claims of Innocence 4:53pm Aug 10, 2010 Nestle Shows its Sweet Side to Greenpeace, Sinar Mas in Indonesian Palm Oil Fight 9:42pm May 17, 2010 [Non-text portions of this message have been removed]
