Posted on August, 18 2010

On August 10, 2010, PT SMART Tbk published an “Independent Verification Report” assessing the claims made by Greenpeace against PT SMART Tbk and its parent company Golden Agri-Resources Limited (GAR) regarding deforestation and the destruction of orang-utan habitats, clearing forests without permits, burning forests, clearing on peat land, and causing social conflict. Sinar Mas is a brand name covering a range of businesses owned by GAR, including SMART. The investigation was conducted by two certification bodies CUC (Control Union Certifications and BSI (BSI Group), along with two academics.

A link to the evaluation report and the related press release from SMART can be found at:
http://www.smart-tbk.com/newsroom_verification.php

Since the report's release, PT SMART has posted two clarification statements on its website dated Aug. 19.

The first statement is by SMART reaffirming its stance that Greenpeace's claims were "exagerrated or wrong."

The second statement is a clarification by auditors BSI and CUC stating that there have "been elements of the report that have been misreported as it has been published and presented."

The report confirms that PT SMART, as the subsidiary of the group that manages all of GAR’s palm oil holdings and as a current member of the Roundtable on Sustainable Palm Oil (RSPO), has contravened the Principles and Criteria (P&Cs) and the Code of Conduct of the RSPO by opening new plantings before high conservation value (HCV) assessments were conducted in some of the concessions assessed.

It also appears from the report that PT SMART may have failed to meet all legal requirements prior to planting in some instances, and has planted on deep peat in some of the sites visited by the auditors. These actions contravene Indonesia law as well as the RSPO standards.

Actions by PT SMART that are found to be direct infringements of the RSPO principles and criteria need to be further evaluated by RSPO:

• Clearances without HCV assessments that happened between 2005 and 2007 need to be compensated for under the Indonesian National Interpretation of the P&Cs.
• Post 2007 clearances without HCV need to not only be compensated for but there needs to be some element of ‘punitive action’ from the RSPO.

The RSPO also needs to evaluate whether PT SMART violated the Code of Conduct of the RSPO.

This requires members to “work towards implementation and certification of the P&Cs” and sanctions that any “Breaches of this Code, or the by-laws and statutes of the RSPO may lead to exclusion from the organization”.

The evidence presented indicates that the RSPO needs to evaluate what is required from the company as restitution and/or punitive action.

To prevent further failings, the RSPO needs to ensure that current PT SMART expansion projects (as well as those of all other members) are registered under the “New Planting Procedure” which requires growers to undertake HCV assessments before opening new areas.

The RSPO needs to urgently resolve the question of which parts of the GAR group are represented by PT SMART as part of its RSPO membership.

Despite the fact that PT Smart manages all GAR’s oil palm operations, GAR maintains that only PT SMART itself and one other subsidiary are members of the RSPO and therefore bound by its rules. WWF urges the RSPO to either resolve what parts of GAR are subject to its standards or conversely make it very clear that GAR cannot make any sustainability claims based on RSPO membership beyond the 11 PTs listed as subsidiaries of PT SMART in the report.

Companies buying palm oil need to be aware that the only way to ensure sustainable sourcing is to buy certified sustainable palm oil from companies that have been assessed against the RSPO standards. Buying from RSPO members is not enough.

Links

Greenpeace response to evaluation:
http://www.greenpeace.org/international/en/news/Blogs/climate/sinar-mas-remains-a-notorious-forest-destroye/blog/26141

Rainforest Action Network response to evaluation:
http://understory.ran.org/2010/08/12/will-cargill-fall-for-the-great-sinar-mas-greenwash/