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Wal-Mart Latest to Step Away From Sinar Mas
Bloomberg & JG | July 07, 2010

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Wal-Mart, the world’s largest retailer, said it has “taken steps to stop” sourcing paper from Sinar Mas unit Asian Pulp & Paper, over allegations of deforestation outlined in a Greenpeace report released on Tuesday.

“Wal-Mart does not support deforestation, and as Greenpeace’s report shows, our largest markets do not source product from APP, and in the remaining markets that do, we have taken the steps to stop development on private-brand products with APP and are looking at what measures can be taken regarding branded products,” company spokesman Kevin Gardner said in an e-mailed statement.

He said the global retail giant had been in discussions with Greenpeace about the allegations against APP before making the decision.

Greenpeace is also pressuring other major international companies, including US fast food chain Yum Brands, British retailer Tesco and US electronics giant Hewlett-Packard to stop purchasing products from Sinar Mas, directly or indirectly.

On Tuesday, French retail giant Carrefour confirmed it would stop sourcing paper from APP, and US-based Kraft Foods said last week it would do so as well.

The Greenpeace report, titled “How Sinar Mas is Pulping the Planet,” says companies including closely held French retailer Groupe Auchan contribute to climate change as well as the destruction of habitat of Sumatran tigers and orangutans by doing business with APP.

“This investigation shows how major international companies like Wal-Mart and Yum are causing Indonesia’s peat land and forests to be slashed and burned for everyday paper products,” Bustar Maitar, Greenpeace Southeast Asia forest campaigner, said in an e-mailed statement on Tuesday.

Yum’s biggest restaurant chain is KFC. Yum and Auchan did not respond to calls.

Pressure from Greenpeace has led some companies to stop buying palm oil from Sinar Mas, which owns businesses ranging from palm plantations and pulp and paper mills to a bank.

Sinar Mas has denied Greenpeace’s charges, saying they are part of a “black campaign” being conducted by the group’s competitors in the global market.

It has appointed two certified verification bodies to study the allegations against its palm oil operations. The results are expected this month.