JAKARTA, July 8 (Kyodo) — U.S. retail giant Walmart is following other major companies in stopping buying products from Indonesian agribusiness giant Sinar Mas Group over charges by environmental group Greenpeace the company continues to destroy Indonesia's rainforests.
"Walmart does not support deforestation and, as Greenpeace's report shows, our largest markets do not source product from APP, and in the remaining markets that do, we have taken the steps to stop development on private brand products with APP and are looking at what measures can be taken regarding branded products," Walmart said in a press statement, referring to Sinar Mas Group's pulp and paper arm Asia Pulp and Paper.
"Globally, we are committed to traceability in the timber supply chain, and we work closely with government, NGOs and supplier partners to build a better, more transparent, and more sustainable supply system," it added.
Earlier this week, the French supermarket chain Carrefour confirmed it has stopped buying from APP for its own brands, while British retailer Tesco said it will do the same by the end of the year unless APP and its suppliers make substantial changes.
Last week, in a letter to Greenpeace, Kraft Foods, the world's second largest food producer, said it is phasing out APP paper and packaging "until the Sinar Mas Group clearly demonstrates its entities comply with local laws and are able to source pulp and paper material sustainably."
Unilever and Nestle, as well as Kraft, have also stopped their palm oil contracts with Sinar Mas Group's palm oil producer PT Smart Tbk for clearing primary forests and peatland to plant oil palms.
In its latest report Tuesday, Greenpeace said APP has no intention to meet a promise to its customers and other stakeholders to source its pulpwood from plantations alone after 2009.
Instead, according to a confidential Sinar Mas document held by Greenpeace International, the country's largest pulp and paper producer plans to acquire new virgin rainforest and peatland and clear them for plantations.
"While the overall capacity of its two pulp mills in Sumatra (Island) was 2.6 million tons per year in 2006, the Sinar Mas document indicates that APP was proposing to raise that to 17.5 million tons per year, a sevenfold increase in APP's pulp capacity in Indonesia," the group said.
Late Wednesday, in an e-mailed statement sent to Kyodo News, APP's Managing Director of Sustainability and Stakeholder Engagement Aida Greenbury denied the charges, calling them "totally false."
"APP's pulpwood suppliers only operate on land that the government has expressly set aside for pulpwood plantation development and they strictly follow the government's allocated rules and regulations that were designed to protect environmentally sensitive areas," Greenbury said.
"Greenpeace's allegation is also illogical since roughly 8 million hectares of gross pulpwood concession area will be needed to support the production of 17.5 million tons of pulp a year. As of today, the land allocated for pulpwood plantations is around 5.7 million hectares or 3 percent of the total land mass of Indonesia," she added.
Greenpeace estimates that Sinar Mas controls 2.9 million hectares of partially forested concessions, some in areas of endangered Sumatran tiger habitats and carbon-rich peatland.
Greenbury stressed, however, that APP's operations are not threatening the habitat of wildlife in Indonesia, saying it is supporting many projects to enhance national parks and high-value conservation forestry areas, including the setting-up of a 110,000-hectare Sumatran tiger sanctuary in Riau Province.
Peatland is regarded as the world's most critical carbon stores and a key defense against climate change. Some studies say they store between a fifth and a third of the total carbon contained in the terrestrial biosphere, including all soils and vegetation.
Indonesia has about 22.5 million hectares of peatland, mostly on Sumatra. Some of them, exploited by the Sinar Mas Group, are more than three meters deep and thus illegal to clear under Indonesian law, Greenpeace said.
The destruction of rainforests and peatland has put Indonesia as the world's third largest greenhouse gas emitter, according to recent government estimates.
