Exposed: Notorious rainforest destroyer Sinar Mas misled stock exchange and customers

Palm oil audit proves group breached Indonesian law

Press release - 19 August, 2010
Jakarta, Indonesia, 19 August 2010 – Sinar Mas has been forced into a humiliating climb down as its independent auditors published a statement on their website saying that the audit had been misreported as it has been published and presented. The auditor’s statement reconfirmed that Sinar Mas has been operating in breach of Indonesian law by clearing deep peat and forests without the required permits. The statement vindicates Greenpeace’s claims that the group is destroying rainforests and peatlands. (1) The auditors have also demanded that their clarification is published on the Sinar Mas website.

The statement, published today on the BSI group website, also shows that the company’s statements, including those made to the Singapore Stock exchange, misled shareholders and customers. Greenpeace has written to the stock exchange asking for Golden Agri Resources, SMART’s parent company, to be investigated for providing deliberately misleading information.

“Today’s announcement shows that Sinar Mas has manipulated the audit’s findings to try to convince shareholders and customers that they are a responsible and sustainable company. Now the truth is out. The audit shows that Sinar Mas repeatedly broke Indonesian law, RSPO rules and its own sustainability commitments,” said Bustar Maitar, Greenpeace South East Asia Forest Team Leader.

Sinar Mas was asked to publish a clarification statement informing stakeholders, including shareholders, customers, Indonesian government officials and the media, of the audit’s actual findings.

The statement shows how SMART, the Sinar Mas group’s Indonesian palm oil arm, wrongly claimed that they ‘operate responsibly and within the laws.’ (2) It confirms that in eight out of 11 concessions audited, forest clearance was conducted without the necessary environmental permits (3). And that deep peat forest was cleared in breach of Indonesian law. (4) Further, the auditors acknowledge that despite claims by Sinar Mas to the contrary, in defence of their operations, ‘Greenpeace reports had not stated that the Sinar Mas group destroyed primary forests’. (5)

The audit also clearly shows that Sinar Mas has been engaged in widespread forest clearance without independent high conservation value assessments, in breach of Roundtable on Sustainable Palm Oil (RSPO) rules. (6)

Greenpeace has repeatedly shown that Sinar Mas is destroying carbon-rich peatland and Indonesia’s last remaining rainforests, including orang-utan habitat, often violating Indonesian law, RSPO rules and Sinar Mas’s own sustainability commitments (7).

“Sinar Mas has no credibility and Greenpeace continues to call on its customers to stop trading with it until it stops all peatland and forest destruction. Using smoke and mirrors and pretending be a responsible company is nothing more than greenwash,” said Maitar.

“Not only did Sinar Mas need to backtrack on its false claims about Greenpeace reports, but this statement confirms that it broke Indonesian law and cleared many forest areas before assessing their conservation value, including potential orang-utan habitat.”

Corporate consumers, including Cargill, must follow Nestle, Kraft and Unilever, and stop supporting rainforest and peatland destruction by removing Sinar Mas's products from their shelves and supply chains. The Indonesian Government must stop groups like Sinar Mas wrecking forests and driving climate change by ensuring the proposed moratorium includes a halt to all forest clearance, including within existing concessions, and ensure immediate protection of all peat lands.

Read more in the blog post: "Sinar Mas caught with pants on fire, fibbing to stock markets"

Contacts:

In Jakarta, Indonesia:

Bustar Maitar, Greenpeace Southeast Asia Forest Team Leader, tel: +62 813 446 66 135

In London, UK:

Andy Tait, Greenpeace UK Senior Campaign Advisor, tel: + 44 (0) 7801 212 980

Beth Herzfeld, Greenpeace International, tel: +44 (0)7717 802 891

Photos and video available:

Emma Stoner, Greenpeace International picture desk, +44 7554 934 750

Maarten van Rouveroy van Nieuwaal, Greenpeace International video desk +31 646197322

Notes to editors:

(1) The statement is available at http://www.bsigroup.com/en/About-BSI/News-Room/BSI-News-Content/General/Verifying-Greenpeace-Claims-report-BSI-Group-issues-clarification-and-summary-statement/ The audit was conducted by BSI and Control Union, supported by Professors from Bogor University. It is available at: http://www.goldenagri.com.sg/newsroom_verification.php. The Sinar Mas group refers to a number of companies under the Widjaja family’s control. These include Singapore-listed Golden Agri Resources (GAR) and its subsidiary PT SMART, listed in Jakarta, Indonesia.

(2) Sinar Mas’s claims were made in their press release of 10 August. Firstly: ‘SMART is not responsible for deforestation of primary forests…. as claimed by Greenpeace’. Secondly: ‘SMART operates responsibly and within the laws and regulations set out by the Indonesian government.’

(3) Audit Executive summary finding 5.3.2. In Central Kalimantan all six concessions began clearance without permits. In West Kalimantan two out of five concessions did the same.

(4) BSI clarification statement, page one, point 1: ‘There was planting on deep peat (> 3 m) in two estates from 2005-2008 which is in breach of the Presidential Decree with regards to deep peat issued in 1990.’

(5) BSI clarification statement, ‘IVEX team clarification statement’ point 1, ‘we acknowledge that the Greenpeace REPORTS had not stated that the Sinar Mas Group destroyed primary forest.’

(6) Audit executive summary 5.2 ‘7 out of the 11 concessions contravene RSPO P &C regarding HCV as planting was done prior to independent HCV assessment after November 2007’

(7) Greenpeace’s reports on Sinar Mas: http://www.greenpeace.org/international/en/campaigns/forests/asia-pacific/Palm-oil-reports/