Now Burger King drops palm oil group Sinar Mas

Now Burger King has dropped Sinar Mas, the palm oil giant which is struggling to cope with a reputational disaster for alleged environmental damage through destroying forests.

Last month, Sinar Mas unsuccessfully tried to use an audit report to clear itself from the allegations. That attempt backfired when BSI, one of the audit firms involved, came out saying that the report was misrepresented.

We did our bit of coverage on this blog and on Ethical Corporation website and also in Ethical Corporation magazine. See here.

Now Burger King has cited the same audit report in its decision to stop buying palm oil from Sinar Mas group companies.

A statement by Burger King reads: "After completing a thorough review of the independent verification report conducted by Control Union Certification (CUC) and BSI Group, we believe the report has raised valid concerns about some of the sustainability practices of Sinar Mas' palm oil production and its impact on the rainforest. These practices are inconsistent with our corporate responsibility commitments."

"As a result, we have decided we will no longer purchase palm oil from Sinar Mas or its subsidiaries."

By the way, Sinar Mas Group walked away with no so coveted title of Greenwasher of the Year at the Ethical Corporation Responsible Business 2010 Awards earlier this year.

The problem with many of the palm oil companies is that they really don't get it. They also continue to rely on half-baked self-certified corporate responsibility consultants and incompetent PR executives to address the issue. It is not working. And will not work. It's time for them to get some sound advice from sound minded professionals.

Have you said "No" to Uzbek cotton yet?

As this year's cotton harvesting season draws near, Environmental Justice Foundation is worrying that the Uzbek regime will once again force the children to pick cotton.

EJF says "contrary to promises by Karimov’s regime not to force children into the fields to pick their billion dollar crop, it sounds like it will be business as usual, unless urgent action is taken."

EJF has long campaigned against the government practice of forced child labour on cotton fields in Uzbekistan. The NGO is seeking international support to boycott cotton from Uzbekistan and put pressure on the rulers of Uzbekistan to take corrective measures.

Should we hope that hundreds of thousands of Uzbek children will be in school this autumn and not toiling in a cotton field?

We have covered the issue in Ethical Corporation several times. See some of them here. And here. Also a podcast here.

Just to mention, EJF was awarded the Highly Commended Effective Campaigner award at Ethical Corporation 2010 Responsible Business Awards.

NGOs trash World Bank framework for palm oil industry

The proposed World Bank/IFC Framework for the Palm Oil Sector is receiving negative comments from the NGOs who say the framework is weak and does not address the real problem.

See also here for the critics are saying.

In an interesting development, the Indonesian government has said that it will reject any loan offers from the World Bank/IFC for the palm oil industry. The government says it does not need loans from the World Bank/IFC. The government officials say the industry should continue to rely on loans from commercial banks.

Are they saying this as they don't want their companies to be subjected to more demanding World Bank/IFC framework?

Industry players on the other hand are hoping for that the World Bank will lift the financing ban and loans will start flowing again.

Sustainability reporting guidelines for Singapore-listed companies

In a significant move, Singapore Stock Exchange has issued a policy statement and a guide on sustainability reporting for its listed companies.

The Exchange is seeking feedback from the public and market players on the policy statement.

The policy statement says the sustainability reporting guidelines are voluntary at the moment. But there is a hint that the reporting may become mandatory in future. The policy statement says: "SGX is of the view that as more companies become inspired to adopt sustainability reporting, it will be natural to take the next step on guidelines and standards leading to rules."

These are the key points of the SGX policy statement and the reporting guidelines:

1. The Board is responsible for matters of sustainability as it leads and directs the company.
2. Environmental, social and governance considerations are important for the long term performance of the company.
3. No single standard is advocated, but the Global Reporting Initiative’s Sustainability Reporting Guidelines which are linked to the UN Compact principles, are among the globally recognised standards.
4. Applying global standards is important for cross-jurisdictional comparability and to give confidence that SGX-listed companies aim to achieve global best practices.
5. The reporting guide says that sustainability reporting is particularly relevant for companies that operate in industries that are susceptible to environmental risks e.g. oil & gas, mining & metals, raw material processing; industries that produce significant environmental pollutants such as chemical and apparel industries; heavy users of natural resources such as palm oil producers, forestry companies, etc.; or part of a supply chain where end customers demand that suppliers behave responsibly.
6. The guideline also emphasises the importance of independent assurance of the report from credible assurance firms.

The SGX policy for encouraging sustainability reporting is likely to result in more Singapore-listed companies reporting on their social and environmental impacts. Currently, Singapore companies lag behind in sustainability performance and disclosure from their peers in other developed countries.

The last date for the submission of feedback is on the 29th Oct 2010.

The full policy statement and the guide are available here.