Golden Agri says halts buys from haze-implicated supplier

Golden Agri-Resources (GAR) , the world’s second-largest listed palm planter by acreage, has stopped buying from a supplier sanctioned this week for allegedly causing forest fires in Indonesia, it said in a statement on Wednesday.

The Indonesian government has launched investigations of more than 200 companies as it scrambles to control fires on Sumatra and Kalimantan islands by the end of November, amid complaints from Singapore and Malaysia about smoke from the fires or the so-called “haze”.

The haze has blanketed parts of Southeast Asia in recent weeks, pushing pollution levels to unhealthy levels in Singapore, Malaysia and northern Indonesia.

Earlier this week, Indonesia ordered four companies to suspend operations, including unlisted palm company PT Langgam Inti Hibrindo (LIH). LIH is owned by small, Jakarta-listed PT Provident Agro, which did not respond to requests for comment on Wednesday.

“Due to recent developments we have currently halted purchases from PT Langgam Inti Hibrindo, pending further clarification from them regarding the status of their operating licence,” Singapore-listed GAR said in a statement emailed to Reuters.

Provident Agro told Reuters on Tuesday that LIH had not received notice of its operational license being suspended or revoked.

An Indonesian Palm Oil Association official said on Wednesday the industry group was discussing whether to expel LIH from its membership rolls.

Indonesia has been trying for at least two decades to end the seasonal fires caused by slash-and-burn clearances on the islands of Sumatra and Kalimantan, where large areas of forest concessions are held by pulp and paper and palm oil companies.

GAR is monitoring known hotspots against third-party suppliers’ locations, the statement said, and will work with suppliers in high-risk areas to help them in fire management, prevention and suppression.

Indonesia’s current focus is on companies involved in starting fires but sanctions against buyers implicated are also a possibility, Eka Widodo Soegiri, spokesman at the Indonesian environment and forestry ministry told Reuters.

Any punishment for companies based overseas would be dealt with by the foreign ministry through government to government talks, Soegiri said.

President Joko Widodo is due to visit hotspots and haze areas in both Sumatra and Kalimantan this week.

Widodo has ordered thousands of security personnel backed by helicopters to help fight the fires, and has threatened to revoke land permits from any companies found responsible.

GAR is the parent of Indonesian palm company PT Sinar Mas Agro Resources and Technology, the target of an anti-deforestation campaign by Greenpeace in 2009-2010 that led to a boycott of its palm products by leading buyers.

GAR produced 2.95 million tonnes of palm oil in 2014 from plantations mostly in Sumatra and Kalimantan.

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