Wilmar pushes new green policies

Commodity giant Wilmar International is using its buying clout to push suppliers to be greener, or else - setting up a battle with growers and governments that have profited from their environmentally damaging practices.

Given Singapore-listed Wilmar's muscle - its refineries process nearly half the world's palm oil - it could also drive up prices of the oil, used in products from cooking oil to cosmetics and biofuels, especially in price-sensitive India and China.

"That's the unfortunate consequence of any steps taken to make agriculture more sustainable. It's a cost we must learn to bear," said Dorab Mistry, the head of edible oil trading at Indian conglomerate Godrej Industries, a big Wilmar customer.

Wilmar, valued at US$16.5 billion, has given its growers across Southeast Asia two years to comply with its new environmental policy, which it says is "the right thing to do for the continual viability of the industry, for our children and future generations".

"We need your support and urgent action to delink your operations from deforestation," it wrote last month to suppliers, referring to the practice of clearing rainforests to expand oil plantations, potentially speeding up climate change.

Producers who fail to comply with Wilmar's "No deforestation, no peat, no exploitation" rules risk being cut off from more than 140 refineries that Wilmar and its associates operate around the world.