Swiss-based Nestle followed moves by consumer products firm Unilever, which canceled its $30 million contract with Sinar Mas at the end of last year, and food company Kraft.

"Specifically, Nestle has replaced the Indonesian company Sinar Mas as a supplier of palm oil with another supplier for further shipments," Nestle said in a statement late Wednesday.

In a press conference Thursday in Jakarta, however, Greenpeace in Southeast Asia said Nestle has still not done enough because it has not cleaned up its entire supply chain.

"Despite their announcement canceling their direct orders with Sinar Mas, Nestle will still be using palm oil from Sinar Mas in KitKats (chocolate bars) because they'll still be getting it from their other suppliers," Bustar Maitar, forest team leader of Greenpeace in Southeast Asia, said.

He also called on Nestle to stop trading with companies within the Sinar Mas Group, including the country's largest pulp and paper company Asia Pulp & Paper.

In their statement, Nestle said it will make sure its suppliers, including U.S.-based global commodities giant Cargill, "understand our demands for palm oil which is not sourced from suppliers which destroy rainforests."

Greenpeace claimed it received confidential information saying Cargill was a major customer of Sinar Mas' palm oil exports from Riau Province on Indonesia's Sumatra Island in 2009.

According to Greenpeace, Nestle is a major consumer of palm oil.

In the last three years, its annual use has almost doubled, with 320,000 tons of palm oil going into a range of products, including KitKats.

In the "Caught Red-Handed" report, Greenpeace said Nestle had been using palm oil from destroyed Indonesian rainforests and peat-lands, pushing already-endangered orangutans to the brink of extinction, threatening the livelihood of millions of people dependent on the forests and accelerating climate change.

The Greenpeace report also said there are more than 500 social conflicts in the Indonesian oil palm sector, mainly over land, labor disputes, disharmony in corporate-community partnerships and in high- profile political scandals involving illegal issuance of permits for oil palm concessions within protected areas and national parks.

Greenpeace also estimates that recently there are between 45,000 and 69,000 Bornean and no more 7,300 Sumatran orangutans left in the wild.

The U.N. Environment Program classifies Bornean orangutans as endangered and Sumatran orangutans as critically endangered.

The species lost their forests to palm oil plantations and as they are deprived of their natural source of food, they are forced to eat young palm plants, raising conflict with palm-oil workers.

According to the conservation group Center for Orangutan Protection, at least 1,500 orangutans died in 2006 as a result of deliberate attacks by plantation workers and loss of habitat due to the expansion of oil palm plantations.

"Many palm oil plantations have seen us as an anti-palm oil organization... We are not, because the palm oil industry gives jobs to local people. What we oppose is the behavior of companies in destroying the rainforests," Maitar said.