UPDATE: Golden Agri Response To Palm Oil Grievance Body 'Acceptable'

A grievance panel of the Roundtable on Sustainable Palm Oil said Friday that a response by plantation operator Golden Agri-Resources Ltd. (E5H.SG) and its units to environmental concerns is "acceptable."

Golden Agri's efforts to comply with RSPO standards could help the company's efforts to win back major palm oil buyers, such as global food giants Nestle SA (NSRGY) and Unilever NV (UN) and U.S.-based fast food chain Burger King Holdings Inc. (BKC), that suspended sourcing of palm oil from a Golden Agri unit in response to claims that the company is involved in deforestation.

Golden Agri-Resources and its units, Indonesia-based PT Sinar Mas Agro Resources & Technology (SMAR.JK) and PT Ivo Mas Tunggal, have submitted detailed plans for compliance with the sustainability body, and the grievance panel will monitor progress on agreed action plans on a quarterly basis, the RSPO and Golden Agri said Friday in a joint statement.

"The panel has evaluated the companies' responses, and considers them acceptable at this stage of the grievance procedure," according to the statement. "An initial progress report (is) scheduled to be received on Jan. 15, 2011."

Golden Agri, which currently isn't a member of the RSPO, has been asked to submit a full application for membership by Nov. 8, it said. Golden Agri's two units are already members of the RSPO, a consortium of palm producers, environmental groups and food companies.

Unilever suspended purchases of palm oil from PT Smart in December following claims of deforestation by Greenpeace. The food giant's palm oil requirements accounted for 3% of Smart's total annual palm oil sales of around US$1 billion. Nestle followed suit in March while Burger King was the latest company to cut purchases in September.

Executives at Unilever, Nestle and Burger King couldn't immediately be contacted for a comment Friday.

Responding to Golden Agri's compliance plan, Indonesia-based Bustar Maitar, Southeast Asia forest campaigner at Greenpeace, said: "Greenpeace will be continuing to press Sinar Mas to implement standards which are strong enough to protect natural forests, biodiversity and the global climate."

"RSPO standards alone do not provide that assurance at this time," Maitar said in an email.

"Working closely with the RSPO to implement the action plan agreed by all parties further demonstrates our commitment towards sustainable palm oil production and to achieving RSPO certification for our plantations and mills," Peter Heng, managing director of communications and sustainability at Golden Agri, said in an email.

-By Gaurav Raghuvanshi and Shie-Lynn Lim; Dow Jones Newswires; [phone]; [e-mail]