Cargill Dismisses Deforestation Charges By Environmental Group
May 06 2010 - 5:38AM
Dow Jones News
Agribusiness giant Cargill Inc. has denied claims made by
environmental groups that it has cleared rainforest and destroyed
peatlands to develop oil palm plantations in west Kalimantan.
"We want to set the record straight on the false
allegations...We do not operate any undisclosed oil palm
properties," the company said in a statement Thursday, after
environmental group Rainforest Action Network ran a report claiming
it was operating two undisclosed palm oil plantations in the
Indonesian region of the Island of Borneo.
RAN alleged that Cargill's plantations had violated criteria
under the Roundtable on Sustainable Palm Oil (RSPO), a
multi-stakeholder group that is working toward setting sustainable
guidelines for the palm oil industry. Cargill has been a member of
the RSPO since 2004.
The environmental group said the two palm oil estates were
"actively burning and clearing rainforest, causing conflict with
local communities, destroying peatlands and operating in violation
of the RSPO principles and criteria."
"RAN claims Cargill has cleared rainforest and primary forests.
This is categorically untrue. We have not cleared or developed any
land that can be categorized as rainforest or primary forest. The
entire area where our properties are located in Kalimantan were
deforested by loggers over ten years ago, which was before we
acquired the plantations. The land was logged and then converted to
oil palm plantations. There is no rainforest or primary forest in,
or anywhere in the vicinity, of our plantation," the privately held
firm said on its company website.
Cargill, who's key customers include Nestle SA (NESN.VX) and
Kraft Foods Inc. (KFT), also said it would buy 60% of its palm oil
needs from palm oil producers who are members of the RSPO.
The allegations that Cargill has been involved in deforestation
were the latest in a series of environmental issues and supply
suspensions that have hit the palm oil industry.
Just last week another environmental group, Greenpeace, alleged
that Indonesia's biggest palm oil producer, PT Sinar Mas Agro
Resources and Technology Tbk (SMAR.JK), also known as PT SMART, and
the Singapore-listed Golden Agri-Resources Ltd.(E5H.SG) have failed
to follow the sustainable plantation practices required by the
RSPO.
The group alleged that SMART was also widely involved in
clearing rain forests and draining peatlands for palm oil
cultivation, a charge that was denied by the companies.
SMART and Golden Agri, both owned by the Sinar Mas Group, have
said they won't cultivate oil palms on land with high conservation
value, and that they remain committed to following sustainable
practices in the production of palm oil.
Consumer giants Unilever PLC (UL) and Nestle have suspended
their purchases of palm oil from the group, while Cargill said it
may review its supply contract with Sinar Mas if the allegations of
deforestation are confirmed.
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com