Asian palm oil giants take action over green group's rainforest probe

• Palm oil is the world's most widely used edible oil, found in everything from margarine to soap, but has faced scrutiny in recent years from green activists and consumers.
• "No new business with either of these mills will be possible until they are compliant with our sustainability requirements,"

KUALA LUMPUR: Two Asian palm oil traders that supply to a list of major consumer brands are investigating two mills accused this week of buying from an illegal plantation in Indonesian rainforest that is home to endangered orangutans.

A Rainforest Action Network (RAN) expose, released on Monday, found Golden Agri-Resources (GAR) and Musim Mas Group purchased palm oil from two mills that sourced palm fruit from a small, privately-owned plantation on Sumatra island.

RAN investigators used satellite images to show an area in Aceh's Rawa Singkil Wildlife Reserve, a conservation area dubbed the "orangutan capital of the world", was cleared in 2013 and illegally replanted with oil palm supplied to nearby mills.

Indonesia-based Musim Mas said in a statement on Tuesday that the two mills named would now enter its "grievance mechanism", which investigates and aims to address complaints through an action plan and monitoring.

"No new business with either of these mills will be possible until they are compliant with our sustainability requirements," the company added.

GAR spokeswoman Anita Neville told the Thomson Reuters Foundation that both the mills named in the RAN report had been contacted and "grievance teams" would conduct on-site field investigations into the claims next week.

"Decisions will be made pending the outcomes of those visits," she said, adding that one of the mills had already agreed to be audited by GAR that reserved the right to take further action, which may include suspending the mills.

The mills and owners could not be reached for comment.

Palm oil is the world's most widely used edible oil, found in everything from margarine to soap, but has faced scrutiny in recent years from green activists and consumers, who have blamed its production for forest loss, fires and worker exploitation.

The RAN investigation is the latest expose to put pressure on companies to prove pledges that they are not fuelling clearing of forest land for plantations and contributing to the impact shrinking forests are having on climate change.

GAR has a target of 85pc of the palm fruit in its supply chain being traced to the plantation it comes from by the end of 2019, rising to 100pc by the end of 2020.

Singapore-listed GAR and Musim Mas supply - either directly, or indirectly - to a list of consumer brands including Unilever, Nestle, PepsiCo, Mondelez International, General Mills, Kellogg's, Mars and the Hershey Co., RAN said in its report.

All the companies involved have vowed to investigate, monitor or keep track of suppliers to ensure palm oil from protected forest areas does not feed into their supply chains.