Audit Partially Clears Indonesia SMART On Green Claim

JAKARTA (Reuters) – An audit of Indonesian palm oil giant PT SMART Tbk showed on Tuesday the firm had not destroyed primary forest but had planted on carbon-rich deep peatlands, partially clearing it of accusations by Greenpeace. While SMART said the independent report showed a campaign by Greenpeace was exaggerated or wrong, the audit said the firm’s planting of deep peatlands — which trap greenhouse gases — on two estates contravened Indonesian and SMART’s own rules. Greenpeace has said in a series of reports released since last year that the firm was clearing peatland and high conservation value forests, which shelter endangered species and trap vast amounts of climate-warming greenhouse gases. “The report concluded the allegations made were largely unfounded,” said SMART in a statement. “SMART is not responsible for the destruction of primary forests and the destruction of orangutan habitats in Indonesia as claimed by Greenpeace.” The bitter dispute between the palm oil industry and environmentalists has broader implications for Indonesia, the world’s biggest palm oil producer, which wants to boost economic growth but has also promised to cut greenhouse emissions by as much as 41 percent from business-as-usual levels by 2020 — largely through curbing deforestation. Big palm oil buyers Unilever and Nestle dropped SMART as a supplier following the Greenpeace reports, while industry giant Cargill had threatened to do the same if the accusations proved correct in the audit SMARTcommissioned in response to the Greenpeace claims. Cargill told Reuters on Tuesday it will study the findings of the audit and decide soon on how to proceed.
The auditors, Control Union Certification and BSI Group, were paid for by SMART, after being approved by the Round Table on Sustainable Palm Oil (RSPO), an industry body of planters, consumers and green groups.

The audit covered only 40 percent of SMART’s total planted area of 430,000 hectares, not including the eastern Papua province. It used satellite images, land surveys, soil analysis and interviews with officials for the findings. SMART’s shares traded down 1.4 percent by 0521 GMT, unchanged from before the announcement, versus a broader Jakarta index decline of 0.6 percent. Its stock price has beaten a rally in the index this year, suggesting investors have shrugged off the Greenpeace campaign. SMART told Reuters in an interview this month it will not be affected by the Greenpeace campaign or a planned two-year government moratorium on new permits to clear natural forest, and plans to expand its plantations this year. Following the Greenpeace claims, SMART had vowed not to clear land with high conservation value forest, such as carbon-rich peatland forest, and says it has actually repaired peatlands on its concessions.
SMART runs the Indonesia palm oil operations of its Singapore-listed parent company Golden Agri-Resources (GAR). GAR is controlled by the Widjaja family, whose business empire Sinar Mas has interests in pulp and paper, finance and property. SMART, with a market capitalisation of $1.1 billion, competes with firms such as Astra Agro Lestari and Singapore-listed Wilmar to produce an oil seeing gowing demand to make products from soap and biscuits to biodiesel. Source: The Star


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