Following accusations last week that candy-maker Nestle purchases palm oil harvested from depleted Indonesian forests, a concerted online attack against Nestle has begun — and it shows no signs of slowing down.

The situation shines a blinding light on the instant-community-building properties of social media — namely, how a community can use social tools such as Facebook and Twitter to tear down as well as build up.

Nestle’s reactions so far have also shown the wrong way to respond in times of social media crises.

The flap began when Greenpeace launched a guerrilla marketing campaign featuring a viral video of an office worker pulling an orangutan finger out of a Kit Kat bar and eating it on break. Citing copyright, Nestle had the video pulled from YouTube. (Strike One.) Greenpeace responded by moving the video to Vimeo and alerting followers about Nestle’s actions via Twitter.

Soon, Nestle began issuing statements saying it had broken ties with Sinar Mas, the palm-oil supplier linked to rainforest destruction in Indonesia.

But despite the pledges to only use sustainable palm oil, Nestle is still facing a tidal wave of negative feedback. Most of it is churning on the brand’s Facebook page. Since I began writing this, a dozen new comments have appeared on Nestle’s wall — some stridently on point, some in defense of the brand, some meant to playfully distract from the debate.

It’s a storm, and it ain’t made of chocolate.

It didn’t help a few days ago when someone representing Nestle dove into the fray, first warning that comments from people using altered Nestle brands as profile photos (such as the Kit Kat/Killer logo) would be deleted.

Then, the Nestle Facebook admin, responding in an irate tone to comments and eventually apologizing, saying: “This (deleting logos) was one in a series of mistakes for which I would like to apologise. And for being rude. We’ve stopped deleting posts, and I have stopped being rude.”

Jeremiah Owyang points out that “Facebook fan page brand-jacking is the new form of treehugging.” In a crisis-management manual he’s drawn up inspired by the Nestle meltdown, he suggests that companies prepare themselves for organized social media attacks and hire the right people to deal with them (i.e., not twentysomething PR interns).

But beyond having the best team possible lined up to deal with a crisis, it’s hard to know exactly what to do when something like this unfolds.

From blog comment sections to Facebook walls, social forums are highly nuanced realms. They are public, and they’re intensely emotional. The wrong word choice, as Nestle learned, can quickly stoke the flame war.

In showing that it was listening to the public and making changes to its company practices, Nestle did the right thing. But sinking to the level of returning rudeness with rudeness — that should never have happened.

Now, with the cries for boycott on Facebook still raging, what do you think Nestle’s next move should be?