(Repeats to additional Reuters subscribers)
LONDON Dec 11 Consumer goods company Unilever
(ULVR.L) (UNc.AS), the world's largest user of palm oil, has
suspended purchases of edible oil from Indonesian group Sinar
Mas on concerns over rain forest destruction.
Unilever, which uses palm oil in such products as Dove soap,
Ben & Jerry ice cream, and margarines like Stork, cancelled its
annual 20 million pound ($32.6 million) contract with Sinar Mas
after a critical report by environmental group Greenpeace.
Anglo-Dutch Unilever said on Friday it was suspending
purchases from PT SMART (SMAR.JK), which is part of Sinar Mas,
until the Indonesian group could give proof that none of its
plantations was contributing to the destruction of rain forests.
Greenpeace alleges that Sinar Mas, Indonesia's biggest palm
oil producer and the second biggest in the world, has been
responsible for widespread deforestation and peatland clearance,
practices which release vast amounts of carbon dioxide.
Sinar Mas was not immediately available for comment. In the
past, it has denied accusations its activities were damaging the
"The Greenpeace claims are of a nature that we can't ignore.
Unilever is committed to sustainable sourcing. Therefore,
we have notified PT SMART that we have no choice but to suspend
our future purchasing of palm oil," said Unilever's Chief
Procurement Officer Marc Engel said in a statement.
Unilever said an independent audit of palm oil suppliers in
early 2009 had highlighted areas of concern which were being
addressed on an individual basis, but the Greenpeace report had
prompted the group into immediate action.
"Unilever's decision could represent a defining moment for
the palm oil industry. What we're seeing here is the world's
larger buyer of palm oil using its financial muscle to sanction
suppliers who are destroying rain forests and clearing
peatlands, said Greenpeace director John Sauven in a statement.
Unilever consumes around 1.3 million tonnes of palm oil each
year and has pledged to buy only from certified sustainable
plantations from 2015, while around 90 percent of worldwide
supply comes from Indonesia and neighbouring Malaysia.
(Reporting by David Jones; editing by Karen Foster)