In the first six months of 2019, ten companies were responsible for almost 19,000 hectares (ha) of deforestation in Malaysia, Indonesia, and Papua New Guinea. This amount represents approximately 50 percent of the estimated 40,000 ha of forest and peat that has been cleared in these regions in 2019 and which can be attributed to an individual company. The top 10 deforesters in the first nine months of 2018 cleared almost 16,000 ha of forest and peat, a figure that was already surpassed by the main deforesters during the first half of this year. In 2018, approximately 74,000 ha of forest and peat were cleared for palm oil plantation development. If deforestation continues at current rates, this figure may also be surpassed in 2019.
The largest known deforester is a group of concessions owned by a relatively unknown Indonesian businessman called Mr. Sulaidy. As Chain Reaction Research (CRR) previously showed, Mr. Sulaidy’s concessions in East Kalimantan were responsible for the largest amount of deforestation in these regions in 2018.
Mr. Sulaidy’s concessions include PT Citra Palma Pertiwi 2 and PT Borneo Citra Abadi, both of which are owned by PT Bangka Bumi Lestari. Notary acts for the company show Mr. Sulaidy has 99 percent shares in the company. He is also the owner of PT Borneo Citra Persada Abadi. Combined, these plantations are responsible for approximately 4,500 ha of deforestation this year. When the 2018 data is included, Mr. Sulaidy has cleared around 10,000 ha of forest in the last 18 months.
Jhonlin Group was the second largest deforester in 1H19. Jhonlin was founded by businessman Haji Andi Syamsudin Arsyad, commonly known as Haji Isam, a coal entrepreneur from Batulicin, South Kalimantan. The exact holdings of Jhonlin Group are not known, but analysis of notary acts and permit data indicates the group has a total landbank of more than 160,000 ha. These plantations are owned by 18 companies belonging to Jhonlin Group or the wider Isam family. Their plantations are in East, South, and Central Kalimantan. Jhonlin group concessions cleared almost 2,500 ha in 1H19. They appear in the supply chains of a number of traders with NDPE policies, including Sime Darby, Bunge Loders Croklaan, Mondelez, Reckitt Benckiser, Friesland Campina, Mars, and Olam.
The third largest deforester is the Indonusa Group. The Indonusa Group consists of companies owned and controlled by Rosna Tjuatja and family. Rosna Tjuatja is an Indonesian citizen and resident of Singapore. The Group has been tied to the oil palm plantation industry since 2008, when it established PT Indonusa Agromulia in Jambi, Sumatra.
One subsidiary of Indonusa Group is PT Internusa Jaya Sejahtera, which owns an 8,903-ha plantation in Merauke, West Papua and cleared almost 2,000 ha of forest in 1H19. Two other subsidiaries of the Group, namely PT Hamita Utama Karsa and PT Indonusa Agromulia, are in the supply chains of the following companies with NDPE policies: ADM, Apical, Avon, Bunge Loders Croklaan, Cargill, Friesland Campina, Fuji Oil, General Mills, IFFCO, Kellogg’s, L’Oreal, Louis Dreyfus Company, Mondelez, Pacific Inter-Link, and Reckitt Benckiser.
Mulia Sawit Agro Lestari
Mulia Sawit Agro Lestari Group operates five oil palm plantations and one mill in Central Kalimantan. Their supply appears in the supply chains of AAK, Avon, Bunge Loders Croklaan, Fuji Oil, General Mills, IFFCO, Kellogg’s, L’Oreal, Mars, Mondelez, Nestle, and PZ Cussons. The Group’s total landbank amounts to 52,772 ha. Currently, approximately 38,000 ha are planted with palm oil, and 13,000 ha of forest, peat and peat forest remain on the plantations. In 1H19, Mulia Sawit Agro Group deforested almost 1,000 ha of peat and 1,000 ha of peat forest.
Puncak Niaga Holdings
The fifth largest deforester in 2019 is the company Puncak Niaga Holdings, which is clearing on its Danum Sinar Sdn Bhd concession in Belaga, Sarawak. Puncak Niaga Holdings is a relatively new player in the palm oil industry, buying Danum Sinar Sdn Bhd from Shin Yang Holdings Sdn Bhd, the controlling shareholder of Sarawak Oil Palms Bhd, in 2017.
In 1H19, Puncak Niaga cleared over 1,500 ha of forest. Since the company does not have any known mills, there is no information on any supply chain links.
Tunas Baru Lampung
Tunas Baru Lampung is an integrated palm oil and sugar cane company, part of the Sungai Budi Group. The Group is one of Indonesia’s largest manufacturers and distributers of agricultural consumer products. Tunas Baru Lampung’s oil palm landbank, estimated at 88,660 ha, is located in South Sumatra and West Kalimantan. The company has three mills, two palm oil refineries, three processing facilities for soap and margarine, and one biodiesel plant. They supply to AAK, ADM, Avon, Cargill, Colgate-Palmolive, Friesland Campina, General Mills, Hershey, Johnson & Johnson, Kellogg’s, Mars, Mondelez, Nestle, Upfield, Vandemoortele, P&G and Musim Mas.
CRR has previously covered deforestation on Tunas Baru Lampung’s concessions. In 2019, approximately 1,500 ha have been cleared on the PT Samora Usaha Jaya estate in South Sumatra, making Tunas Baru Lampung the sixth largest deforester so far this year.
The Indonesian Peputra Group includes of companies affiliated with the late Sinmardi Taman and his family. The Group has two subsidiaries, Peputra Supra Jaya and Peputra Masterindo, which are jointly owned by the Singaporean company Heeton Investment Pte. Ltd. The group operates two plantations and two mills in Riau, Sumatra.
The Sinmardi Taman family also owns PT Marita Makmur Jaya, which has developed just over 1,000 ha of forest, peat and peat forest in Riau in 2019. Thirty companies reported buying directly and indirectly from the Peputra Group. These companies include: Fuji Oil, AAK, ADM, Avon, Bunge Loders Croklaan, Colgate-Palmolive, First Resources, Friesland Campina, GAR, General Mills, Hershey, Johnson & Johnson, Kellogg’s, L’Oreal, Mars, Sime Darby , Louis Dreyfus Company, Nestle, Olam, Pacific Inter-Link, P&G, Cargill, Reckitt Benckiser, Astro Agra Lestari, KLK Oleo, Upfield, Vandemoortele , Wilmar, Musim Mas, and Mondelez.
The Best Group is the eighth largest deforester this year with just over 1,000 ha of peat converted by subsidiary PT Berkah Alam Fajarmas in Central Kalimantan. Best Group, founded by the Tjajadi family in 1982, is now fully owned by Rendra Tjajadi and Winarno Tjajadi. The Group is mainly involved in the vegetable oil business with the manufacturing of cooking oils, and it operates four mills and twenty estates representing a landbank of 147,100 ha, through a total of nine subsidiaries. These companies appear in the supply chains of Mondelez, Louis Dreyfus Company, Fuji Oil, Cargill, and Bunge Loders Croklaan.
The Rugao Shuangma Group operates in North Kalimantan where it has cleared around 1,200 ha since the beginning of the year. Founded in 1996, the Chinese manufacturer specializes in the development, production and trade of fatty acids and derivatives. Little is known about PT Palem Segar Lestari and PT Palem Segar Lestari, the group’s subsidiaries. No company with NDPE policies and public supplier lists has been identified among their buyers.
Bewani Oil Palm Plantation
The tenth largest deforester so far this year is the Bewani Oil Palm Plantation in Papua New Guinea. CRR has previously covered this plantation because of its ownership links, via the Malaysian Tee family, to the Prosper Group mills in Peninsular Malaysia. Earlier this year, the Tee family publicly divestedfrom the plantation. Notary Acts for the plantations obtained in March 2019 show that the plantation is now 100 percent owned by Top Leap Holdings Ltd. No registration documents can be found for Top Leap Holdings, so CRR assumes it is registered in a secrecy jurisdiction such as the British Virgin Islands. A mill is now operational on the Bewani Oil Palm Plantation, but it is not known who this mill is supplying to.
Plantations face business risks, NDPE buyers could see reputation risks
Despite growth in the NDPE market, as many as 30 companies with NDPE policies are still buying from six of these 10 companies. Mondelez buys from the highest number of companies on this list, despite the company being a signatory to a December 2018 joint statement, along with Wilmar and Unilever, which commits the company to a “Suspend then Engage” policy with any supplier found to be deforesting after January 1, 2019.
The above-mentioned plantations face increasing business risks as the leakage market shrinks and it is more difficult to find a profitable sales channel for palm oil produced deforested land. Financiers of these palm oil plantations also face investments risks. Finally, NDPE buyers from these plantations face reputation risks with 2020 industry deforestation pledges approaching.