The world’s second-largest palm oil company has agreed a standard for conservation of Indonesian forests and peatlands, according to non-profit The Forest Trust (TFT).

TFT and Golden Agri-Resources Limited (GAR), part of the Sinar Mas group, a $2.3 billion company that is the largest palm oil producer in Indonesia, have established a Forest Conservation Policy. GAR has pledged to avoid destruction of forests that are particularly valuable in terms of environmental preservation, biodiversity, landscape, or importance to local livelihoods.

But the agreement announced today did not set an exact definition for the areas that GAR cannot touch, and will still leave GAR free to exploit other forest areas, the Guardian says.

Greenpeace is cautiously supportive of the initiative, and will closely monitor GAR’s compliance. The actions should bring substantive change to Indonesian forests by the end of 2011, TFT said.

TFT’s work with food and drinks company Nestle drew GAR to the bargaining table, the non-profit said.