Audit finds Sinar Mas breaks law but requires close reading
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Audit finds Sinar Mas breaks law but requires close reading

Well Sinar Mas is back in the news, or as far as it wants to be. The independent audit of its rainforest clearing activities has been released prompting some intriguing questions of underlying issues. It certainly makes me think a closer eye should be kept on the operations of Golden Agri-Resources (GAR) which now seem to be doing the dirty work for Smart.

The upshot is that, officially, its subsidiary, Sinar Mas Agro Resources and Technology (Smart) has been found guilty of clearing land for palm oil plantations before it had received permits or made conservation assessments. Sure, why make conservation assessments? Sod the orangutans.

On top of that it was found guilty of destroying peat-land which releases CO2 into the atmosphere and contributes to global warming.

In the interest of balance I must report that the audit determined Smart had not destroyed primary forest. However a further examination of the report raises questions about other Sinar Mas companies.

All of this came out in a recent press conference ran by the company’s new PR company Bell Pottinger, according to the Ecologist. A spokesman for Sinar Mas admitted that the company must “do better“ but that it was committed to conservation. Naturally Greenpeace, which has been creating havoc for Sinar Mas among its largest buyers by releasing photos and reports outlining its wholesale destruction of rainforest, called the process a ‘greenwash’.

Already Unilever, Nestlé and Kraft, some of the biggest buyers of palm oil globally, have decided to stop doing business with Sinar Mas. Unfortunately they are considering this report and if the wheat is not separated from the chaff may begin trading again.

What is intriguing are some of the nuances underlying this whole story. Firstly, the employment of PR company Bell Pottinger has been a recent development. It’s a PR company noted for its crisis management abilities and handling clients with shabby images. Former and current clients include Imperial Tobacco, McDonalds and the oil trading company Trafigura, which was convicted recently of illegally exporting toxic waste to Africa.

The boss of Bell Pottinger’s parent company and driving force behind it is Timothy Bell (now Baron Bell) who had the dubious accolade of being behind the image and PR for former British prime minister, Margaret Thatcher’s three successful general elections.

Now, it seems, that the press conference to talk about the audit was delayed for a couple of weeks, leading cynical old hacks like me to conclude that Bell Pottinger’s crisis management gurus needed more time than originally thought to identify angles to make Sinar Mas look better.

The report itself only took three weeks (pretty impressive efficiency considering both the remote areas covered and the fact it was done in Indonesia, not noted for its speedy business process) and looked at only 40% of Smart’s total planted palm oil plantations. It excluded any part of Papua when Sinar Mas executives have already admitted it plans to develop over a million hectares of land.

The audit also said that 98% of the land developed was what is known as ‘degraded’ areas. In reality this means land that had already been cleared of rainforest, which kind of avoids the question of who degraded them in the first place.

Importantly the audit points out (in very small print in the whole 84 page report), that Golden Agri-Resources (GAR) or its subsidiary operating companies, also part of the Sinar Mas brand name, was not a member of Round Table on Sustainable Palm Oil (RSPO). Therefore no validation of its procedures could be given.

At the same time the audit pointed out that SMART did use GAR subsidiaries but did not have legal control over all operating companies controlled by GAR. On the other hand it managed all of GAR’s palm oil operating units.

What exactly this means is open to question. Did GAR subsidiaries which do not fall under the RSPO’s remit slash and burn rainforest, later to hand them to GAR as prospective palm oil plantations later to managed by SMART?

Who knows, it’s a question studiously avoided by the audit.

The independent audit was carried out by Control Union Certification and the BSI Group, as well as two experts from the Bogor Agriculture Institute (IPB). Both CUC and the BSI Group are approved by the RSPO, an industry body which has already been shown to fall short on its aims of producing sustainable sources of palm oil.

Now one cannot say that CUC or the BSI Group are anything other than legitimate and honest verifying groups, but past evidence does show that CUC in particular, is not immune from having the wool pulled over its eyes, or in one case the cotton.

It seems CU india was pulled up by The Agricultural and Processed Food Products Export Development Authority (APEDA) of India over certification of organic cotton. One client which had CU certification, Raj Eco Farming, was found to be using genetically modified cotton (which is not considered organic) and the certificate was withdrawn and pushed CU India into a series of surprise investigations of farmers and suppliers to check that further haky panky was not going on. As CUC said its Indian subsidiary and “one other certification organisation were made responsible for discrepancies at Raj Eco farms”. In other words it relied on misinformation supplied by the client.

Call me cynical but I smell a rat in this whole process and have little doubt that somewhere along the line ecological rape is practised knowingly by some of the groups executives.