Malaysian palm oil firm denies clearing rainforests

Posted on March 26, 2010. Filed under: Forestry/Wetlands |

(Reuters) – Malaysia’s second-largest planter IOI Corp (IOIB.KL) dismissed claims by a green group that it cleared rainforests on Borneo island to expand oil palm estates, saying the report was inaccurate.

IOI Corp said on Friday it conducted its own investigations and held a dialogue with Friends of the Earth group, which published a report last week looking at how the planter was expanding estates on the Indonesian side of the island.

The report alleged the planter was enroaching into rainforests, draining peatlands and practicing open burning, which leads to vast amounts of global warming emissions getting released.

That prompted one of IOI’s key customers, Neste Oil (NES1V.HE) to say it will carry out its own investigations on the planter that supplies Finnish refiner’s biofuel plants in Europe. [ID:[nSGE62N01P]

“It has been established that Friends of the Earth’s field research had been highly selective and limited, and that several incidents on which allegations were based were incorrectly reported,” IOI said in a statement on its website.

“IOI Corporation is also not involved in any open burning activities and as part of its zero-burning policy, it is monitoring and preventing third-party burning activities on its concessions.”

The planter also said, without going into the details, that it had set up a clear action list and timeframe to address Friends of the Earth’s remaining concerns.

IOI owns 80,000 hectares of land in Indonesia, mostly in Kalimantan province in Borneo.

Green groups are scrutinising Indonesian and Malaysian planters on their expansion activities and pressurising top palm oil buyers to halt contracts with errant suppliers as food and fuel demand for the vegetable oil grows this year.

Buyers like Unilever (UNc.AS) (ULVR.L) and Nestle have cut ties with Indonesia’s top planter Sinar Mas after a Greenpeace report said the firm felled forests.

Agribusiness giant Cargill could be the next to censure the Indonesian planter

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