February 19, 2019

Sime Darby reacts to palm oil supply chain cases

( - Sime Darby Plantation (SDP) has posted two responses on its website regarding the linkage between its supply chain and the ongoing clearing of Bornean orangutan habitat, in the wake of two news reports published by in February this year. 

This news report serves to provide an update and relevant information to address the two public responses from SDP.

SDP’s first response

With regard to the Saraswanti group, which continues to destroy Bornean orangutan-inhabited peat forests, as reported by (Feb 1), SDP asserted that “We do not have a standing purchase contract with the company.”

However, pertaining to this same case, Cargill told in late January this year that its supply chain was linked to the Saraswanti group by its sourcing from SDP.

With this in mind, Cargill explained the following in writing to (Jan 31): “Cargill has reached out to Sime Darby to communicate its concerns regarding the matter and has asked for steps Sime Darby has and will be taking moving forward.”

SDP responded by elaborating on several important points on its website, including the assertion that it will initiate further investigation into the matter, will continue to review its own internal processes to further strengthen its due diligence, and will continue to uphold its NDPE commitments.

The Planet Explorer images below, presented by the team, clearly show how a Saraswanti company (PT SAE) is persisting in the clearing and draining of the Bornean orangutan-inhabited peat forests in its concession. 

SDP’s second response

SDP’s second response was aimed at a news report posted by (Feb 4) concerning the ties between Nestlé's supply chain and the relentless removal of peat forests inhabited by the Bornean orangutan by a Pundi group company (PT PWA)

“We wish to clarify that this is inaccurate, and that the Pundi Lahan Khatulistiwa Group does not supply to SDP,” was part of the response posted by SDP on its website.

SDP added, “We would also like to better understand how this inaccurate link has been made and would welcome any input from     on this.”

The editorial team responded in kind by emailing SDP to explain that it had made the link between the company’s supply chain and the Pundi group by referring to Nestlé's mill list, in which SDP is listed as a direct supplier to Nestle which sources palm oil from the Pundi group among other suppliers.

Asked whether Nestle’s supplying mill list is inaccurate, thus backing SDP’s claim that there is no link between its supply chain and the Pundi group, SDP has yet to respond.

As to palm oil supply chains linked to deforestation, Chain Reaction Research stated in early October last year that SDP is one of the main customers of both the Pundi and Triputra groups.

The PT PWA concession, in which Bornean orangutan-inhabited peat forests are being eradicated unabated to make way for new palm oil plantations, previously belonged to the Triputra group before being sold to Pundi.