Unilever stops buying palm oil from Indonesian planter

KUALA LUMPUR (Reuters) - Consumer goods giant Unilever has told dealers not to source palm oil from Indonesian planter Duta Palma on concerns over rainforest destruction, an Indonesian industry official said on Wednesday.

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Unilever, the world’s top palm oil buyer, blacklisted Duta Palma just two months after it halted a $33 million supply contract with Indonesia’s largest producer, PT SMART

Green campaigners and consumers have turned up the heat on European firms such as Unilever, saying these companies’ palm oil suppliers are responsible for deforestation and peatland clearance that can speed up climate change.

“It is Unilever’s decision,” Derom Bangun, vice-chairman of the Indonesian Palm Oil Board, told Reuters by telephone.

“Unilever did not have a supply contract with Duta Palma to begin with. They are safeguarding their supply mechanisms by asking their traders not to buy palm oil from this company after that BBC report.”

The BBC documentary aired this week showed footage of Duta Palma staff clearing rainforests for oil palm estates that produce the vegetable oil used in Unilever products such as Dove soap and Stork margarine.

The documentary also cited Unilever as saying it would stop buying palm oil from Duta Palma.

Officials from Duta Palma and Unilever were not immediately available for comment.

Unilever said last year that an independent audit of palm oil suppliers in early 2009 had highlighted areas of concern to be addressed on an individual basis.

Industry watchers say Unilever’s latest action could make it difficult for buyers and planters to work together in the main industry body aimed at improving palm oil’s green standard, the Roundtable on Sustainable Palm oil (RSPO).

Duta Palma and Unilever are both members of RSPO.

“It creates a lot of suspicion between the two groups,” said an RSPO official in Malaysia, who declined to be named due to the sensitivity of the issue.

“But it highlights the difficulty of trying to stay green, especially when the Indonesian government is handing out concessions to develop oil palms.”

Indonesia’s Agriculture Minister Suswono said last year that Indonesia, the world’s top palm oil producer, would still expand estates despite concerns that expansion would contribute to greenhouse gas emissions.

Unilever consumes around 1.3 million metric tons of palm oil each year and has pledged to buy only from certified sustainable plantations from 2015. Indonesia and Malaysia account for at least 80 percent of the world’s palm oil supply.

Additional reporting by Aloysius Bhui; Editing by Clarence Fernandez