Consumer goods giant Unilever today announced it was suspending purchases of palm oil from a major Indonesian supplier, following allegations by environmentalists the company was engaged in widespread illegal deforestation.
Unilever, which consumes 4 per cent of the total global supply of palm oil for use in products including food spreads, ice cream and toiletries, said it was suspending future purchases from PT Smart, part of the Sinar Mas group over its environmental practices.
The global giant said it would not buy the oil from PT Smart until it could prove its plantations were not contributing the destruction of "high conservation value forests" and expanding onto areas of peatland.
The announcement comes in the wake of a report by Greenpeace alleging that Indonesia's biggest palm oil producer was involved in illegal deforestation and land clearance on deep peatlands.
Palm oil is a major global commodity, used in foods, toiletries and for biofuels, but land for plantations in places such as Indonesia is created by clearing rainforests and drying out and burning the peatlands they stand on.
This causes huge emissions of greenhouse gases into the atmosphere, as well as destruction of habitat for threatened species such as orang-utans.
Deforestation, which is happening at a rate of more than 2 million hectares a year in Indonesia, makes the Asian country the world's third biggest emitter of greenhouse gases after the US and China.
Unilever said an audit launched early this year of its major suppliers had revealed some areas of concern which were being addressed on an individual basis - but Greenpeace's report had prompted them to take immediate action.
Marc Engel, chief procurement officer, said: "The Greenpeace claims are of a nature that we can't ignore. Unilever is committed to sustainable sourcing.
"Therefore we have notified PT Smart that we have no choice but to suspend our future purchasing of palm oil.
"If PT Smart are able to come forward with concrete proof that they are not involved in acceptable environmental practices then we would certainly re-consider our position."
Greenpeace welcomed the news that Unilever was suspending purchases of palm oil from PT Smart, whose parent company also owns a major paper producer which the environmental group is targeting over its policies, and urged other multinational companies to follow suit.
John Sauven, Greenpeace executive director, said: "Unilever's decision could represent a defining moment for the palm oil industry.
"What we're seeing here is the world's largest buyer of palm oil using its financial muscle to sanction suppliers who are destroying rainforests and clearing peatlands.
"This has set a new standard for others to follow. Major corporations that wish to be seen as environmentally responsible must immediately stop using Sinar Mas products in their household brands."
Unilever is a member of the Roundtable on Sustainable Palm Oil, set up in response to concerns over the environmental and social impacts of the production of the oil, but with PT Smart also a member, Greenpeace warned the scheme was no guarantee of sustainable production.