Jul 02, 2013

    Wilmar to shut out palm oil suppliers behind fires

    WILMAR International, the world's largest palm-oil trader, plans to cut ties with Indonesian suppliers that clear land illegally with fire, after air pollution in Singapore reached a new high due to haze caused by the blazes in Sumatra.

    Wilmar, which bans burning on its own plantations, relies on third parties for more than 90 per cent of crude palm oil for its refineries.

    While Indonesia and Malaysia ban burning to clear or manage acreage, 17 timber concessions and 10 oil-palm plantations had land affected by fires in Indonesia, according to June 24 data from the non-governmental World Resources Institute (WRI).

    Indonesia is investigating a number of companies suspected of involvement in illegal fires and will announce those names once the probe is completed, Environment Minister Balthasar Kambuaya said last week.

    Wilmar deals with some of the companies identified by WRI, on the assurance that they don't resort to burning, the company said in an e-mail message.

    "Should they be found to be involved in burning to clear land for cultivation, we will stop doing business with them," it said.

    The company's policy states that suppliers must comply with all local and national laws and regulations.

    Palm-oil refiners are being pushed to enforce their no-burning policies against suppliers after hundreds of illegal blazes raged last month in Indonesia, the world's top producer of the commodity.

    Kuala Lumpur-based Sime Darby said in a statement last Friday that it had found fires on land at one of its units, though the blazes were in an area where local communities plant crops such as corn and sugar, and not in areas planted by the company.