Cargill denies its palm estates destroy Asian forests

* Cargill slams a green group for false allegations

* Says does not clear forests, drain peatlands

* Also does not practice open burning

By Niluksi Koswanage

KUALA LUMPUR, May 6 (BestGrowthStock) – Agribusiness giant Cargill
[CARG.UL] on Thursday dismissed claims by a green group that
the firm’s estates expanded at the expense of rainforests and
peatlands on Borneo island.

Cargill said it wanted to “set the record straight on the
false allegations” by Rainforest Action Network (RAN), which
published a report this week looking at how the U.S. firm was
operating its oil palm estates on the Indonesian side of the
island.

The report signals that green groups are increasingly
scrutinising the Minneapolis-based firm, which earlier
threatened to delist Indonesian planter Sinar Mas as a key palm
oil supplier over allegations of illegal logging.

RAN’s latest report now says that Cargill’s plantations
were draining peatlands and practiced open burning to clear
land, which pumps vast amounts of global warning emissions into
the atmosphere.

“RAN claims Cargill has cleared rainforests…this is
categorically untrue,” said Cargill on its website on Thursday.
“The entire area where our properties are located in Kalimantan
were deforested over ten years ago, which was before we
acquired the plantations.”

Cargill owns and operates two plantations in Indonesia and
12 palm oil refineries worldwide.

One of its estates in Kalimantan province on Borneo island
has an acreage of 32,000 hectares or two-thirds the size of
Singapore. Cargill says no peatlands are found on their estates
and no rainforests are in the vicinity.

One of the world’s largest privately owned corporations,
Cargill is a key palm oil importer to the U.S., which annually
consumes over one million tonnes of the vegetable oil, or 2.5
percent of the world’s total palm oil trade.

Its key customers who use palm oil include General Mills
(GIS.N: ), Kraft (KFT.N: ) as well as Nestle (NESN.VX: ), which
wanted to stop buying from Cargill’s supplier Sinar Mas and
directed the U.S. firm to probe its supply chain, green groups
say.

Cargill has pledged by end-2010 to buy 60 percent of its
palm oil from planters who belong to the Roundtable on
Sustainable Palm Oil — an industry driven certification body
that upholds commitments to preserve rainforests and wildlife.

It has stopped buying from another Indonesian planter Duta
Palma since 2008 as the firm did not meet Cargill’s
environmental criteria. Unilever (UNc.AS: ) (ULVR.L: ) followed
suit a year later. [ID:nSGE61N0BN]

Industry sources in Indonesia and Malaysia said Cargill
coming under fire signalled that environmentalists will not
spare any firm regardless of public commitments to produce or
source green palm oil, which may potentially slow expansion.

“The palm oil business is like living in a glass house with
the green groups throwing stones. Cargill was previously
outside but as it got into the plantations it now has to bear
with all the allegations,” said one Malaysian planter.
Stock Market News

(Editing by Michael Urquhart)

Cargill denies its palm estates destroy Asian forests