Processing Magazine

Indonesia''s Palm Oil Giant Faces Industry Sanction

September 23, 2010

An industry body for sustainable palm oil accused Indonesian agricultural giant Sinar Mas of breaching its principles, and warned that it could face expulsion, reports the Associated Foreign Press. Sinar Mas Agro Resources and Technology (SMART) has been struggling to repair its image after Greenpeace alleged the Indonesian firm was devastating rainforests and habitats for endangered species like orangutans. The campaign by the environmental group has led several foreign buyers to cancel major contracts, but SMART said last month that an audit it had commissioned had cleared it of the charges. The Roundtable of Sustainable Palm Oil (RSPO) -- an industry group of producers, environmental groups and food companies -- said it had found "serious non-compliance" on the firm''s part. "The Roundtable on Sustainable Palm Oil takes all infringements of its Code of Conduct and Principles and Criteria very seriously," the Kuala Lumpur-based RSPO said in a statement on its website. "Members who have been found to not be in compliance and who continue to be in non-compliance with the RSPO regulations could ultimately face sanctions, including the suspension and, eventually, the termination of their membership of the RSPO." The environmental watchdog accuses SMART of widespread forest destruction, including clearing primary forests and peatland. SMART has said it should not be blamed for the destruction of Borneo''s forests and that the allegations are "largely unfounded". Indonesia is the biggest producer of palm oil, which is used in everything from biscuits to cosmetics, but environmentalists say plantations are driving deforestation blamed for habitat loss and producing greenhouse gases.