London, Dec 11 (IANS) Unilever, the Anglo-Dutch consumer goods multinational, Friday announced it was cutting ties with a major Indonesian supplier of palm oil after a campaigning environmental NGO accused the company of causing climate change.

Unilever suspended all purchases from Sinar Mas, a key supplier of palm oil to India and China, after Greenpeace accused the Indonesian company of widespread illegal deforestation and peatland clearance -- practices that release vast amounts of carbon dioxide into the atmosphere.

Indonesia is the world's third largest greenhouse gas emitter after China and the US.

Unilever, which uses palm oil in soaps, ice cream and margarine, among other products, suspended its 20 million pound ($32.6 million) contract with Sinar Mas subsidiary PT SMART until the Indonesian group could give proof that none of its plantations was contributing to the destruction of rain forests.

"The Greenpeace claims are of a nature that we can't ignore. Unilever is committed to sustainable sourcing. Therefore, we have notified PT SMART that we have no choice but to suspend our future purchasing of palm oil," Unilever Chief Procurement Officer Marc Engel said in a statement.

According to Greenpeace, India and China accounted for nearly half of Sinar Mas' total exports of a million tonnes of palm oil products in 2007.

India is the world's second largest buyer of vegetable oils.

Greenpeace Executive Director John Sauven said: "What we're seeing here is the world's largest buyer of palm oil using its financial muscle to sanction suppliers who are destroying rainforests and clearing peatlands."

"This has set a new standard for others to follow. Major corporations that wish to be seen as environmentally responsible must immediately stop using Sinar Mas products in their household brands."