Independent auditors, hired by the Sinar Mas group to investigate Greenpeace claims that its palm oil unit PT Smart had cleared deep peatland and forest without permits, said the giant conglomerate “misreported” elements of its audit when it declared its unit was largely free from wrongdoings.

“It has come to the attention of the BSI Group that following the publication of the report BSI-CUC verifying greenpeace claim case: PT Smart Tbk on Aug 10, there have been elements of the report that have been misreported as it had been published and presented,” said BSI in a statement posted on its website on Thursday.

The BSI Group and Control Union Certification (CUC) are independent auditors paid by Smart and approved by the Roundtable on Sustainable Palm Oil (RSPO), an industry body of planters, consumers and green groups.

“We therefore wish to restate the key findings of the report ... ,” said BSI.

The statement prompted Greenpeace to call upon the Singapore Exchange, in writing, to investigate Smart’s parent company, Golden Agri Resources (GAR), for deliberately providing misleading information.

Last week, Smart said the independent BSI-CUC audit had largely cleared the company of any wrongdoing and that Greenpeace’s allegations were either “exaggerated or wrong”.

“Today’s announcement shows that Sinar Mas has manipulated the audit’s findings to try to convince shareholders and customers that they are a responsible and sustainable company,” said Greenpeace South-East Asia Forest Team leader Bustar Maitar.

“Now the truth is out. The audit shows Sinar Mas repeatedly broke Indonesian law, RSPO rules and its own sustainability commitments and that this information was hidden through spin and misreporting,” Maitar added.

Among the key points highlighted by BSI-CUC were Greenpeace claims that Smart had performed forest land clearance/logging without prior approval of government permits – Timber Utilisation Permit and Environmental Impact Assessment (EIA).

BSI’s independent verification exercise (IVEX) team found that in Central Kalimantan, all of Smart’s concessions examined were found to have carried out land clearance before the EIA was approved.

In West Kalimantan, all except two concessions examined had the necessary EIA prior to land clearance activities.

Greenpeace’s claims that Smart was destroying Indonesia’s forests and peatlands has led Nestle SA, the world’s largest nutrition and food company, and Unilever, the world’s second largest consumer goods company, to stop buying palm oil from the company.

Greenpeace also claimed Smart had cleared and planted on peatland with a depth of more than three metres and therefore deemed to have violated Indonesian law.

“Planting on peatlands which had deep peat were found but not as extensively as claimed in the (Greenpeace) reports,” said BSI-CUV IVEX.

“There was planting on deep peat (more than three metres) in two estates from 2005-2008 which is in breach of the Presidential decree with regards to deep peat issued in 1990. This also contravened Smart’s own operating instructions,” the auditors added.

BSI-CUC also concurred with Greenpeace claims the Sinar Mas group had tried to “greenwash” its credentials by claiming RSPO membership for GAR’s subsidiaries, Smart and PT Ivo Mas Tunggal, to create an impression GAR is committed to sustainability through RSPO.

“It would appear that the literal reading of the RSPO membership rules may not sufficiently address organisations with complex legal and management structures who may use this loophole to “greenwash,” said BSI-CUC IVEX.

“In GAR’s case, it is clear that GAR is not a RSPO member and therefore it cannot claim or give the impression that GAR and all its subsidiaries are in the process of obtaining RSPO certification,” the auditors added.

GAR is listed in Singapore and is part of the Sinar Mas group, one of Indonesia’s largest conglomerate with interest in pulp and paper, agri business, palm oil, coal and finance.

Smart rejected Greenpeace claims it had misled its stakeholders as the BSI-CUC IVEX report was published in full on the company’s website and on the website of the relevant Stock Exchanges.

“The IVEX report was published in full to the public, leaving no room for our stakeholders to be misled,” said Smart president director Daud Dharsono.

“We have done everything in strict accordance with the listing rules of the relevant stock exchanges,” he added.

Dharsono said the company had admitted clearly and publicly to mistakes which had been committed and necessary action had been taken to ensure it would not be repeated.

“The latest issue raised by Greenpeace include clearing on peatland and land permits. These must be put in context. They occurred but not to the extent as Greenpeace has made it to be,” said Dharsono.

“Furthermore, as part of Smart’s standard operating procedure, the company is committed not to develop on any peat land.” THE END