Green group slams Cargill over SMART palm oil

JAKARTA (Reuters) - Environmentalists on Friday criticized a decision by agribusiness giant Cargill Inc to continue buying palm oil from Indonesian firm PT Smart Tbk after SMART received a mixed score in a green audit.

An aerial view shows land, owned by Indonesian palm oil giant PT SMART Tbk, being cleared in Ketapang in Indonesia's West Kalimantan province August 2, 2010. REUTERS/Tommy Ardiansyah

Greenpeace has alleged in its reports that SMART -- which is controlled by Indonesia’s Widjaja family, owners of the Sinar Mas conglomerate -- cleared forests in Kalimantan without completing the proper paperwork and destroyed carbon-rich peatlands.

Big palm oil buyers Nestle and Unilever have already delisted SMART as a supplier and Cargill said in March it would do the same if Greenpeace’s allegations were borne out in an independent audit of SMART’s operations and if the firm did not take corrective action.

The audit, released earlier this month, said SMART had not cleared primary forests but also showed that it had, in some cases, failed to complete necessary environmental impact statements and had planted on some areas of peatland that were deeper than three metres -- a breach of Indonesian law.

SMART said the incidents of deep peatland planting were small and sporadic, that some peatlands had been repaired and that it had since got all the necessary paperwork for its concessions.

Peatlands release vast amounts of greenhouse gases when disturbed and their preservation is seen as crucial to slowing down climate change.

Cargill said on Friday it was satisfied with the audit.

“Cargill has consistently stated that if the allegations were proven correct and PT SMART did not take corrective action we would delist it as a supplier,” it said in an email to Reuters.

“(But) we are encouraged PT SMART has acknowledged areas of non-compliance... (and) that it has committed to taking corrective actions and to strengthening its standard operating procedures to address these,” it said.

U.S-based environmentalist group Rainforest Action Network (RAN) on Friday issued a statement condemning Cargill’s decision to keep buying from SMART.

“It’s now clear that Greenpeace’s evidence against PT SMART was justified, and that Sinar Mas remains a controversial supplier,” said Ashley Schaeffer of RAN.

Editing by Sara Webb and Alex Richardson