Nestlé considers resuming ties with Indonesia palm oil firm

2010-06-21

Food giant Nestlé will resume buying palm oil from Indonesian giant Sinar Mas if an independent audit clears the Jakarta-based firm of claims it is devastating rainforest, Nestlé official told news agency.

The world’s largest food company dropped Sinar Mas -- Indonesia’s biggest palm oil firm -- as a supplier in March following protests by environmental group Greenpeace, after Anglo-Dutch Company Unilever also severed ties this year.

Jose Lopez, Nestlé S.A’s executive vice president, said the Swiss company would “take the right decision” after an ongoing independent audit due for completion by the end of next month.

“Of course, I have nothing against the company or anybody else,” he said when asked whether Nestlé will resume buying palm oil from Sinar Mas.

“If, as you say, it’s all baseless, then why should I have any decision against,” Lopez told reporters during a sustainable palm oil forum in Malaysia’s capital.

Palm oil, which is used extensively as biofuel and for making processed food and toiletries, has been vilified by environmentalists for causing deforestation and threatening species such as orangutans and rhinos.

Indonesia and Malaysia are the world’s top two palm oil exporters and account for 85 percent of global production.

Lopez said Nestlé had entered a partnership with non-profit group The Forest Trust (TFT) and others to identify and exclude high risk plantations or farms linked to deforestation. He said this signaled Nestlé’s “strong commitment to ending deforestation of rainforests”.