September 2, 2010 / 3:40 PM / in 7 years

Burger King to stop buying palm oil from SMART

* Burger King joins Nestle, Unilever in delisting SMART

* Says valid concerns raised about impact on rainforest

By Sunanda Creagh

JAKARTA, Sept 2 (Reuters) - Burger King Holdings Inc, the No. 2 U.S. hamburger chain, said it would stop buying palm oil from Indonesia’s PT SMART Tbk, citing concerns over environmental sustainability and rainforests.

Greenpeace has accused the palm oil giant of clearing peatland and forests with high conservation value that shelter endangered species.

Burger King is the latest in a series of big buyers, including Nestle and Unilever, to announce they would delist SMART as a supplier of palm oil, which is used in a wide variety of products ranging from make-up to chocolate.

SMART, which is controlled by Indonesia’s Widjaja family, owners of the Sinar Mas conglomerate, recently released an audit of the Greenpeace claims, which found that while the firm had not cleared primary forests, it had, in some cases, failed to fill out environmental impact assessments required by the law.

The report also showed the firm had breached Indonesian regulations by planting in some areas of peatland deeper than three metres, but SMART said this had only happened on a handful of occasions.

Peatlands release enormous amounts of climate-warming greenhouse gases when disturbed.

“We believe the report has raised valid concerns about some of the sustainability practices of Sinar Mas’ palm oil production and its impact on the rainforest. These practices are inconsistent with our corporate responsibility commitments,” Burger King announced on its Facebook page on Thursday.

“As a result, we have decided we will no longer purchase palm oil from Sinar Mas or its subsidiaries.”

SMART said in a statement on its website it was disappointed with Burger King’s decision.

“We hope to welcome them back as customers soon. We are confident that Burger King’s decision does not represent the view of the majority of our customers,” the statement said.

“We have made mistakes, but these are not to the extent that it has been made out to be,” the company said. “We have also made clear that where mistakes were made, we have taken the necessary action to ensure that this is not repeated.”

Editing by Jane Baird

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