Indonesia 's biggest palm oil producer pledged Wednesday to follow new standards to protect carbon-rich forests and peatlands, in a move cautiously welcomed by environmentalists including Greenpeace.

Golden Agri-Resources Ltd. (E5H.SG), or GAR, and its subsidiary Smart, part of the Sinar Mas group, said it would work with Geneva-based consultancy The Forest Trust, or TFT, to ensure its palm oil is sustainably harvested.

"We will not develop plantations on High Carbon Stock (HCS) forests, High Conservation Value forest areas and peatlands," Smart president director Daud Dharsono told reporters.

He said the partnership with The Forest Trust "aims to ensure that the group has a no deforestation footprint."

Scientists believe the destruction of carbon-storing forests is a lead cause of climate change.

Indonesia is the third biggest emitter of the greenhouse gases blamed for global warming, thanks mainly to deforestation across islands such as Sumatra and Borneo , where illegal logging is rife.

Major palm oil buyers including Nestle S.A. (NSRGY) and Unilever PLC (UL) cancelled contracts with Smart in response to a Greenpeace campaign last year highlighting the company's allegedly unsustainable clearing of forests.

TFT executive director Scott Poynton said better management of the palm oil industry was crucial for the environment. Indonesia is the world's biggest palm oil producer.

"Without better stewardship, the phenomenal growth of the palm oil industry could spell disaster for local communities, biodiversity and climate change as palm plantations encroach further and further into forested areas," he said.

But he added, "We all know that this agreement counts for nothing if its not now implemented."

"We have worked with other companies to clean up their supply chains successfully, and it is our intention to do so again," he said.

Greenpeace Indonesia forest campaigner Bustar Maitar said the group's campaign against GAR would be put on hold to give it a chance to prove that Wednesday's announcement was more than greenwashing.

"On paper, these commitments are really a major step forwards and if GAR implements these changes, it will save large areas of forests," he said.

"But we will watch closely to make sure this happens."

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