Nestlé Resumes Palm Oil Purchases from SMART

SMART then implemented innovative processes and supply chain controls to ensure that the delivered oil is fully traceable from the supplying plantations, through processing and transportation to the Nestlé factory in Indonesia.

Sep 19 2011 --- PT SMART Tbk (SMART) has announced that Nestlé has placed an order to resume palm oil purchases from the company. SMART views this order as an acknowledgement of its on-going sustainability commitments and efforts to find solutions to continuously produce palm oil in a sustainable, environmentally and socially responsible manner.

In May 2010, Nestlé, together with international NGO, The Forest Trust (TFT) announced Responsible Sourcing Guidelines  (RSGs), a set of critical requirements to guide the Nestlé procurement process and to ensure compliance with the Nestlé Supplier Code. In late 2010 SMART's parent company Golden Agri-Resources (GAR) developed a joint action plan with TFT to help GAR ensure that its subsidiaries could meet the Nestlé RSG requirements. To ensure that oil delivered to Nestlé meets the RSG requirements, the plantations supplying Nestlé were subject to TFT assessments. SMART then implemented innovative processes and supply chain controls to ensure that the delivered oil is fully traceable from the supplying plantations, through processing and transportation to the Nestlé factory in Indonesia. This full traceability across the supply chain has been further audited by Nestlé-appointed international agency, TÜV Rheinland Group.

Mr Daud Dharsono, President Director of SMART said: We welcome Nestle's decision which is an acknowledgement of our  sustainability efforts. This represents an important milestone in our journey toward the continuous production of sustainable palm oil. Sustainability is an on-going journey and we are committed to managing the environment responsibly and empowering communities. We believe that our achievement of full traceability with this order is another significant milestone.

GAR has also been working with TFT on the implementation of a Forest Conservation Policy (FCP) which aims to ensure that GAR has no deforestation footprint and also seeks to achieve long-term sustainable growth for GAR and the palm oil industry. The FCP focuses on there being no development on High Carbon Stock (HCS) forests, where a provisional definition of exceeding 35 tonnes of carbon per hectare will be used as HCS  forest definition; no development on High Conservation Value (HCV) forest areas; no development on peat lands; to have free, prior and informed consent from indigenous and local communities and compliance with all relevant laws and National Interpretation of Roundtable on Sustainable Palm Oil (RSPO) Principles and Criteria.

Added Mr Dharsono: "We believe the FCP is a strong platform where all stakeholders can collaborate to find solutions for sustainable palm oil. We would like to thank TFT, Greenpeace and all other stakeholders for their positive contributions and collaboration to implement the FCP initiative."

In addition to the FCP and as part of a holistic approach to sustainability, GAR is developing a Yield Improvement Policy to improve its productivity. The company is also developing a Social and Community Engagement Policy to guide its approach to conflict resolution. GAR is collaborating with TFT and is in constructive dialogue with a number of other civil society organisations to ensure that it develops robust policies which represent best practice.