Audit report clears Indonesia's palm oil giant SMART of deforestation accusation

14:38, August 11, 2010      

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Reports of audit said that Indonesian palm oil giant PT SMART has been cleared of destruction of rain forest and orangutan habitats in Indonesia as it is accused by Greenpeace.

But, the reports paid for by the firm found that a fraction of the company's plantation areas were located on peatlands, a violation of the law and the company's own best practices.

Launched Tuesday, the audit report showed that 11 concession areas located in Central and West Kalimantan controlled by the company were degraded land and no longer primary forests prior to the conversion of the areas into palm oil plantations.

"The Greenpeace claims are either exaggerated or wrong," SMART president director Daud Dharsono was quoted by the Jakarta Post as saying in Jakarta.

Daud said all the concession areas in Central and West Kalimantan were affected by earlier activities such as logging and slashing and burning by other parties, before the company won government permits for the areas.

The audit report says SMART had completed all required land development permits, including timber utilization permits (IPK) and the environmental impact assessments (Amdal) before obtaining concessions for five areas in West Kalimantan.

Market analysts said the environmental audit would challenge Greenpeace's findings on the company's operations, and thus influence palm oil buyers such as Nestle SA, the world's largest nutrition and food company, Unilever, the world's second-largest consumer goods company, and Spanish energy company Abengoa SA to resume their contracts with SMART.



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