By Krishna N. Das and Mei Mei Chu
CAREY ISLAND, Malaysia, Feb 11 (Reuters) - Sime Darby
Plantation, the world's largest palm oil planter, has suspended
two Malaysian suppliers for failing to meet its environmental
standards and identified 55 others as "high-risk" in recent
months as it fights against deforestation.
Sime Darby is potentially one of the biggest
losers from a European backlash against an industry accused of
clearing vast areas of tropical rainforest to make way for
plantations.
Company officials said this was the first such action taken
since the launch of an online tool last May which allows anyone
to trace the sources of its palm oil and raise complaints if
necessary.
The company, which counts Nestle, McDonald's
, Unilever and Ferrero as customers, refines 4
million tonnes of palm oil a year in Malaysia, 1 million tonnes
of which is sourced from third parties.
The palm industry "still has issues around deforestation, we
don't deny that, but somehow the attention is always on us,"
Rashyid Redza, principal sustainability officer at Sime Darby,
told Reuters.
"We have not been proactive enough in the past to counter
the allegations, and we have not been organised as an industry
in the past."
He did not name the suspended suppliers, who would need to
ensure their plantations did not cause deforestation and that
their workers are not exploited before being considered for
re-inclusion in its supply chain.
The high-risk suppliers have been identified based on their
location near protected forest areas or orangutan ranges, he
said on Jan. 31 at the company's plantation in Carey Island, an
hour's drive southwest of the Malaysian capital Kuala Lumpur.
Sime Darby, which has 590,000 hectares of planted area
across Malaysia, Indonesia, Solomon Island and Papua New Guinea,
was one of four Malaysian palm giants that Indonesia accused of
carrying out slash-and-burn land clearing practices that led to
a cross-border haze crisis in the region in September.
It has denied the accusation, saying that most fires were
started by local communities living within its concession.
In 2018, WWF-Indonesia https://www.reuters.com/article/us-palmoil-indonesia-deforestation/palm-oil-from-indonesias-shrinking-forests-taints-global-brands-report-idUSKBN1K827N
named Sime Darby among several companies that bought "tainted"
palm oil mills - those that source palm oil from plantations
that illegally encroached protected forest areas on Sumatra
island. At that time, Sime Darby said it was working with NGOs
to eradicate deforestation.
Indonesia and Malaysia account for about 85% of palm oil
production and are set to lose the most from EU regulation to
phase it out from renewable fuel by 2030.
(Reporting by Krishna N. Das and Mei Mei Chu; Editing by
Kirsten Donovan)
Unilever (ULVR)