Over the past decade, Indonesia’s deforestation rate has significantly declined, including in the pulp and palm oil sectors. But now commodity-driven deforestation is making a resurgence in Indonesia according to recent spatial analysis. PT Mayawana Persada which operates a pulpwood concession in West Kalimantan province on the island of Borneo, is leading Indonesia’s new wave of deforestation. The report provides evidence that these companies are linked with Royal Golden Eagle, a corporate group controlled by Sukanto Tanoto that owns the second large paper company in Indonesia: APRIL.
Today, a coalition of leading environmental organizations have released the report Deforestation Anonymous that sheds light on the alarming resurgence of deforestation in Indonesia, driven by PT Mayawana Persada in Indonesian Borneo. The evidence presented in the report documents the largest current case of deforestation among all pulpwood and oil palm plantation companies in Indonesia. In the last three years, PT Mayawana Persada, which operates a forestry concession in Indonesia’s West Kalimantan province on the island of Borneo, has cleared more than 33,000 hectares of rainforest, an area nearly half the size of Singapore.
The report reveals that Mayawana is part of a larger trend where companies are using complex corporate structures involving offshore secrecy jurisdictions to continue clearing tropical forests. This deforestation has destroyed habitat for Bornean orangutans and other endangered species, and has catalyzed a conflict between the company and a local Dayak community.
“Over 55,000 hectares of rainforest remains in the Mayawana concession, making it a critical test case for efforts to control deforestation in Indonesia,” said Hilman Afif of Auriga Nusantara, one of the environmental groups that co-published the investigation. Yet the company’s opaque ownership structure makes it difficult to know who should be held accountable for the company’s destructive activities.
Mayawana is owned by a chain of holding companies that leads to the secrecy jurisdictions of the British Virgin Islands and Samoa, neither of which require the names of shareholders to be disclosed to the public. “This complex corporate structure, in effect, hides the ultimate beneficial owner(s) of the company and can shield them from the legal and reputational risks of destroying such vast tracts of tropical forest,” said Arie Rompas of Greenpeace Indonesia.
In the case of Mayawana, corporate documents, operational management connections, and supply chain links indicate the company is related to the Royal Golden Eagle Group (RGE). RGE is a global producer of pulp, paper, packaging, tissue, viscose and palm oil, and is the parent conglomerate of APRIL, Asia Symbol, Sateri, Apical and Asian Agri. In 2015, RGE – and several of its subsidiaries including APRIL – initiated a policy of “zero deforestation” in its supply chain. Among the buyers of RGE’s products are some of the world’s largest fashion brands, consumer goods manufacturers, and mass retailers, many of which make sustainability claims to customers about not causing rainforest destruction or harming communities. These sustainability claims are now called into question over Mayawana’s continuing deforestation in Borneo.
The organizations publishing this report call on PT Mayawana Persada to immediately halt the deforestation and conversion of peatlands within its concession, to resolve its conflicts with local communities, and to disclose the names of its beneficial owner(s).
Mayawana’s deforestation makes untenable the Forest Stewardship Council’s years-long effort to re-engage with APRIL, the RGE Group’s holding company for its Indonesia pulp and paper operations, after it was disassociated from the organization a decade ago for destructive .forestry practices. The organizations publishing this report call on the FSC to suspend the “remedy” process for APRIL to gain re-entry into the sustainability certification scheme, at the very least until Mayawana’s deforestation stops and the company resolves its conflicts with communities in an equitable and accountable manner.
Through a statement issued by APRIL, the RGE Group denies any association with PT Mayawana Persada. Its full response is included in the report.
The organizations publishing the report Deforestation Anonymous are Auriga Nusantara, Environmental Paper Network, Greenpeace International, Woods & Wayside International, and Rainforest Action Network.