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INDONESIA: Palm Oil Producer Unethical, Groups Say

by Toby SterlingThe Associated Press
July 3rd, 2007

A Singapore-based company was involved in slashing and burning Indonesian forests to make way for palm oil plantations that feed the growing market for biofuels, environmental and activist groups claimed Tuesday. The company emphatically denied the allegations.

The Dutch arm of Friends of the Earth and Indonesian rights group Lembaga Gemawan published a 100-page report they said details evidence that subsidiaries of Wilmar International Ltd. dodged environmental rules to plant palm trees in West Kalimantan.

But a Wilmar spokeswoman called the accusations "erroneous, misleading and defamatory."

"As a responsible corporate citizen, the Wilmar Group is fully committed to sustainable palm oil," Carolyn Lim Wan Yu wrote in an e-mailed reaction.

Past studies by environmental groups have - without naming names - found that developers in Malaysia and Indonesia burned vast tracts of rain forest to grow palm oil. The fires unleashed millions of tons of carbon dioxide, defeating the purpose of developing palm-based biodiesel fuel as a renewable source of energy that does not contribute to greenhouse gases.

Tuesday's report attempts to identify Wilmar - one of the world's largest palm-oil producers - as one of those responsible, by focusing on one small part of the company's operations. But Wilmar offered a point-by-point rebuttal of the allegations.

The groups said they had found evidence of "burning with the intention to clear land ... plantation development without approved environmental impact assessments, (and) land rights conflicts resulting from encroachment outside areas allocated" by government concession.

Activist Laili Kharnur of Lembaga Gemawan traveled from Indonesia to Amsterdam for the report's release and to file complaints with several Dutch banks that finance Wilmar. In an interview with The Associated Press, she said she had witnessed first hand the misery caused by illegal deforestation.

"For instance, in the village of Senujuh, in Sejangkung subdistrict, Wilmar cut down the trees or forests, of which 400 hectares (nearly 1,000 acres) (are) not in Wilmar's concession area. This is owned by villagers," Kharnur said.

The villagers "lost their trees, they lost their natural resources, because they depend on the forest for food, for their livelihood also. If you take my trees, it's as if you took my life," she said.

In a response, Wilmar denied outright ever setting fires or failing to acquire proper development permits. It said that "minor disagreements and conflicts among villagers/villages in and around our plantation projects do sometimes arise ... (but) in cases where the communities are not supportive of the project, we will not proceed."

Anne van Schaik, a spokeswoman for Friends of the Earth's Dutch arm, Environmental Defense, said the report was released on Tuesday in part to influence the Dutch government. A parliamentary debate is scheduled for Wednesday on what steps should be taken to ensure crops used to create biofuels as replacements for oil and gas do not do more harm than good.

The Netherlands is Europe's biggest importer of palm oil, used in a wide range of supermarket products as well as an alternative to fossil fuels.

The Dutch guidelines may act as a template for other European nations. A draft version released this year says production of biofuels should not contribute to deforestation, deplete reservoirs of carbon captured in the earth, degrade soil or water supplies, or displace local populations.

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