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Indonesia Palm Oil Giant Defends Environmental Record — Again
August 20, 2010

Sinar Mas Agro Resources and Technology (SMART) has again claimed that it is innocent of illegal deforestation after British auditors complained that elements of an independent probe that SMART commissioned to verify the legality of its activities had been misrepresented to the public. (AFP Photo) Sinar Mas Agro Resources and Technology (SMART) has again claimed that it is innocent of illegal deforestation after British auditors complained that elements of an independent probe that SMART commissioned to verify the legality of its activities had been misrepresented to the public. (AFP Photo)
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Jakarta. Indonesia’s biggest palm oil producer on Friday rejected fresh allegations of illegal forest clearing after foreign auditors suggested it had misrepresented the findings of an independent investigation.

Sinar Mas Agro Resources and Technology (SMART), part of the Sinar Mas group, has been struggling to repair its image after a Greenpeace name-and-shame campaign led several foreign buyers to cancel major contracts.

Its credibility took another blow Thursday when British auditors the BSI Group complained that elements of an independent probe which SMART commissioned to verify the legality of its activities had been misrepresented to the public.

SMART had trumpeted the auditors’ report as evidence that Greenpeace’s allegations were false, but BSI said the probe’s “key findings” included that the company had violated Indonesian law on forest management.

It also found that the company had launched operations on almost 38,000 hectares (94,000 acres) of land on Borneo before mandatory environmental studies had been completed.
The company was also found to have planted palm oil crops in high-value deep peatland, but not to the extent claimed by Greenpeace.

SMART president director Daud Dharsono rejected any suggestion it was trying to dodge the findings of its own audit or mislead shareholders.

“We’ve always emphasised that the independent verification exercise report be shared in an open and transparent manner and that is exactly what we have done,” Dharsono said, adding it was published in full on the firm’s Web site.

“Palm oil is a strategic economic product for the alleviation of poverty in Indonesia. We care for our people, the environment and all biodiversity including the important orangutan.”

Peat forests are massive stores of carbon and their destruction for timber or agriculture is a major contributor to emissions of gases blamed for global warming.

Indonesia is the world’s biggest producer of palm oil, used in everything from soap to cosmetics.


Agence France-Presse