Nestle drops Indonesian supplier on rainforest concerns

Money, Sharon Singleton, 17, 2010 | 11:42

Nestle on Wednesday followed food giants Unilever and Kraft in cancelling palm oil supply contracts with an Indonesian company accused of destroying rainforest habitats that are home to endangered orangutans.

The maker of KitKat, Rolo and Coffee Crisp said it was taking the action following a review of its palm oil sources to ensure its suppliers are meeting environmental standards.

The company said it replaced Sinar Mas, Indonesia’s biggest palm oil producer, with another supplier for future shipments.

“We will continue to pressure our suppliers to eliminate any sources of palm oil which are related to rainforest destruction and to provide valid guarantees of traceability as quickly as possible,” the company said in a statement on its website.

“We will not portray palm oil as free of such oils unless such guarantees are clear and reliable.”

The action by the consumer product giants came following pressure from environmental group Greenpeace. Activists from the group staged a protest at Nestle’s headquarters and factories in the U.K., Netherlands and Germany on Wednesday to highlight the problem.

Vevey, Switzerland-based Nestle’s annual use of palm oil has almost doubled in the past three years to 320,000 tonnes, Greenpeace said. The company also uses the product in ice cream, baby cereals and infant formula.

Anglo-Dutch consumer products group Unilever ended its 20-million pound annual contract with Sinar Mas in December, while Kraft cut its ties in February.

Unilever, maker of Hellmann’s mayonnaise and Dove soaps, also said it found Sinar Mas subsidiary PT Smart was failing to meet environmental sustainability standards.

“If PT SMART are able to come forward with concrete proof that they are not involved in unacceptable environmental practices then we would certainly re-consider our position,” Unilever Chief Procurement Officer Marc Engel said in a statement at the time.

Greenpeace claims Sinar Mas is breaking Indonesian law and ignoring its commitments as a member of the Round Table of Sustainable Palm Oil by expanding into the rainforests that are home to the apes.

PT Smart wrote to clients in February this year saying it was taking action to improve its environmental practices. The company pledged its commitment to not destroying high value conservation areas and not converting peat-rich soils to cut carbon emissions.

Nestle also confirmed Wednesday that it does not source paper from Sinar Mas unit Asian Pulp and Paper.

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