“Orangutan Capital” Under Siege: New Evidence Shows Illegal Deforestation in Indonesia’s Leuser Ecosystem

In July 2024, RAN commissioned Pléiades Neo satellites to fly above Indonesia’s Rawa Singkil Wildlife Reserve to capture unprecedented 30cm resolution imagery to map the extent of illegal deforestation within the reserve since the deforestation cut-off dates adopted by the palm oil sector’s No Deforestation (NDPE) policy commitments, and the emerging European Union Deforestation-free Regulation (EUDR). The findings are alarming and show the ongoing destruction of some of the highest-priority conservation areas within the Leuser Ecosystem, a renowned hotspot for biological diversity and carbon sequestration. This globally important tropical rainforest reserve is known as the Orangutan Capital of the World due to the presence of the highest density populations of critically endangered Sumatran orangutans known to exist anywhere. The evidence is presented in a new report demonstrating that palm oil remains the main driver of illegal deforestation inside the reserve and that the actors responsible are primarily land speculators, not family-managed smallholder farms.

Orangutan Capital Under Siege report image
Read the full report

Apes from Space: Unprecedented Satellite Resolution Allows for Most Detailed Monitoring Ever of the ‘Orangutan Capital of the World’ 

This is the first time that high-resolution imagery of this level has been published, showing the extent of the palm oil development crisis in this region. This level of analysis is not possible using publicly available satellite imagery. It allows for the age of individual oil palms to be determined, indicating whether illegal plantations have been established outside of the compliance dates for the policies of major brands and banks.

Check out the imagery on Forest Frontlines––RAN’s new dedicated watchdog platform and NusantaraAtlas

The Key Findings from RAN’s Investigation are: 

  • Widespread Illegal Palm Oil Production: 653 hectares (1,613 acres) of illegal palm oil plantations have been established within the Rawa Singkil Wildlife reserve, with 453 hectares (1,117 acres) classified as productive. This suggests that illegal palm oil could already be entering the supply chains of major global brands and traders.
  • Impacted Brands and Banks: Major brands implicated include Procter & Gamble, Nestlé, Mondelēz, PepsiCo, and Nissin Foods, alongside banks such as MUFG, Rabobank, and HSBC. These entities risk exposure to illegal palm oil produced insourced from the reserve through their sourcing from, or financing of, traders caught sourcing illegal palm oil. Other banks exposed to further high-risk traders in the region include Singapore’s DBS, UOB, OCBC, BNP Paribas, and Malaysian banks Maybank and CIMB. 
  • Increasing Deforestation Rates: Despite its status as a legally protected area in Indonesia, the Rawa Singkil Wildlife Reserve saw a fourfold increase in deforestation between 2021 and 2023. An alarming 74% of total deforestation since 2016 occurred after the EUDR cut-off date of December 31, 2020, indicating a systematic disregard for legal protections and regulatory requirements. The unfolding crisis appears to be a systematic attempt to cause degradation in intact peat forest areas before the conclusion of the national government’s field validation of the reserve boundaries to officially reduce the reserve size and normalize the illegally cleared areas.
  • New Loopholes: This investigation documents the rise of a new palm oil ‘laundering’ loophole in which wealthy land speculators use the cover of smallholder farmers to avoid accountability for illegal deforestation.  The evidence presented demonstrates that palm oil remains the main driver of illegal deforestation inside the reserve, and the actors responsible are primarily land speculators, not family-managed smallholder farms.

Global Brands Driving the Palm Oil Deforestation Crisis

Palm oil is being grown illegally inside the nationally protected Rawa Singkil Wildlife Reserve, and previous exposés published by RAN show that oil has been used to manufacture consumer goods products sold across the world by Procter & Gamble, Nestlé, Mondelēz, Colgate-Palmolive, PepsiCo, Unilever, Kao, and Nissin Foods. In 2019 and again in 2022, the brands named here were found purchasing palm oil from multiple mills that have continued to source palm oil resulting from the illegal clearing of lowland rainforests within the nationally protected Rawa Singkil Wildlife Reserve. These mills are located immediately next to areas of illegal encroachment into the reserve and, to this day, lack the necessary procedures to trace the location where the palm oil they sell is grown, an essential requirement for complying with the No Deforestation, No Peatlands, No Exploitation (NDPE) policies to which all of these brands have publicly committed.

RAN’s field investigations in September – October 2024 again found evidence that palm oil grown illegally inside the protected Rawa Singkil Wildlife Reserve is being supplied to a mill repeatedly exposed for sourcing and supplying illegal palm oil. The mill, called PT. Global Sawit Semesta, continues to be listed as a supplier to Procter & Gamble, Nestlé, Mondelēz, PepsiCo, and Nissin Foods. This means these brands are at risk of manufacturing their consumer products using illegal palm oil produced at the expense of the Orangutan Capital of the World.

Major traders Royal Golden Eagle Group (Apical), Musim Mas, Golden Agri Resources (1, 2, 3), Wilmar, and Permata Hijau Group have all confirmed their past sourcing relationships with PT. Global Sawit Semesta (PT. GSS) via published supplier or grievance lists. Apical and Musim Mas have issued reports claiming that PT. GSS has improved its traceability systems and stopped sourcing illegally produced palm oil after being exposed in RAN’s 2022 Carbon Bomb Scandals. PT. GSS also claimed to have put in place a mechanism that traces to the plantation in September 2022. The field investigations, conducted in September – October 2024, outlined in the report show how Royal Golden Eagle Group, Musim Mas, and Permata Hijau are sourcing from PT. Global Sawit Semesta, the same mill previously exposed for sourcing illegal palm oil in 2019 and 2022. This case shows once again that PT. GSS is still sourcing illegal palm oil grown inside the reserve, and the traceability and deforestation-free claims being made by palm oil traders Royal Golden Eagle Group, Musim Mas, and Permata Hijau Group, and global brands like Procter & Gamble, Nestlé, Mondelēz, PepsiCo and Nissin Foods, simply can not be trusted. Permata Hijau was also sourcing from another mill called PT. Aceh Trumon Anugerah Kita, which was caught sourcing illegal palm oil grown in the reserve.

A Way Forward: Collaborative Action Is Needed to Deliver a Solution for the Singkil Bengkung Trumon Region

The global market now demands palm oil free of deforestation, peatland development, and exploitation of communities and workers, especially in global biodiversity hotspots like the Leuser Ecosystem. However, these commitments still need to be adequately implemented on the frontlines of palm oil expansion in the Orangutan Capital of the World in Aceh, Indonesia, where deforestation is increasing. Advancements are needed in the palm oil industry because global brands and their customers remain exposed to illegal sources of Conflict Palm Oil grown by land speculators inside the Rawa Singkil Wildlife Reserve.

Investments are needed in the establishment of multi-stakeholder programs that develop and implement a shared and just vision to protect the lowland rainforests and peatlands of the Singkil-Bengkung region from further destruction. These programs should also diversify economies and drive investments in low-carbon, community-led, small-scale agriculture that respects the rights of communities and smallholder farmers to manage their lands and improve livelihoods. RAN calls on all brands and traders complicit in the Singkil crisis to invest in these programs without delay.

Summary of responses received to our findings 

All banks named in the report either declined to comment, citing client confidentiality or did not respond. Four of the brands, and all five traders, responded regarding their sourcing of illegally produced palm in 2024 from PT. Global Sawit Semesta (PT.GSS) and PT. Aceh Trumon Anugerah Kita (PT. ATAK).

PepsiCo responded saying they have previously logged a case involving PT. GSS via their Agricultural Grievance Mechanism and that the mill is not a direct supplier of PepsiCo. However, the mill is listed in its published palm oil mill list for 2023 and PepsiCo confirmed that RGE (Apical), Musim Mas, and Permata Hijau––the palm oil traders shown to accept illegally produced oil palm from PT. GSS in October 2024––are currently indirect suppliers.

Nestlé responded, saying they would immediately engage with their direct suppliers to investigate the allegations against PT. GSS, and should remedies be needed, they will take the necessary action. Nestle stated that they do not source from PT. ATAK, despite the mill being listed in their most recent palm oil supply disclosure via their sourcing from Wilmar Adani. 

Procter & Gamble responded saying that they have investigated the cases and identified suppliers that were providing palm oil sourced from PT. GSS and PT. ATAK. They stated their suppliers claimed to have already executed suspension on PT. GSS, but given the concerns raised they have issued a suspension of both PT. ATAK and PT GSS from their supply chain, and will soon revise the status of these grievances to reflect the decisions and actions taken. 

Nissin Foods responded, saying they would raise this case with their suppliers, and Mondelēz failed to respond.

Royal Golden Eagle (Apical), Musim Mas, and Permata Hijau have all confirmed their direct or indirect sourcing from PT. GSS and have committed to investigating our allegations further. Apical states that PT. Global Sawit Semesta has taken immediate action to suspend any palm oil sourcing from the broker named in our report–RAM Ud. Iqbal Jaya–until investigations are completed.

Permata Hijau confirmed its direct sourcing from PT. ATAK. Permata Hijua disputes RAN’s claim that they continue to buy from mills that are on the no-buy lists of our peers. They state they have their ‘own no-buy list which has been calibrated with our peers’ and buyers’ and to the best of their knowledge do not buy from mills that are banned by our peers for NDPE non compliance.’

Golden Agri Resources (GAR) and Wilmar confirmed they no longer source from PT. GSS and PT. ATAK. GAR, Wilmar, and Musim Mas all claim to have continued to work with another mill called PT. Runding Putra Persada on corrective actions and that that mill is no longer sourcing illegal palm oil from within the Rawa Singkil Wildlife Reserve. These claims have not been subject to independent verification.

The Palm Oil Collaboration Group responded to the comments made in our report on its development of a new loophole in the implementation of deforestation-free commitments, which it refers to as the ‘Minimal Smallholder Deforestation (MSD)’ approach. This approach seeks to define predetermined geographic regions as de-facto ‘negligible risk’ areas, thereby sidestepping traceability and deforestation-free requirements. The initiative confirmed the development of the Minimal Smallholder Deforestation approach and that it will be trialed in reporting on the implementation of deforestation-free commitments via the NDPE Implementation Reporting Framework (NDPE IRF) in 2025.

The Palm Oil Collaboration Group described the Minimal Smallholder Deforestation Approach as a risk-based approach to traceability for independent smallholders with the objective that this acts as an initial screening process to identify priority forest frontiers where the palm oil industry can direct resources and efforts to shift smallholders to NDPE compliant practices. They referred to initiating an open-source validation process for the spatial data that will be used to identify sourcing areas with ‘negligible risk’ status. RAN continues to raise concerns to the POCG on the MSD approach providing a pathway for untraceable ‘independent smallholder’ volumes of palm oil to be included in public reporting on the fulfillment of “No Deforestation’ commitments.