Illegal ‘Orangutan Capital’ Deforestation Scandal Forces Responses from Global Companies
RAN’s recent report, Orangutan Capital Under Siege, documenting illegal palm oil development within Indonesia’s nationally protected Rawa Singkil Wildlife Reserve, presented incontrovertible evidence that major brands like Procter & Gamble, Mondelēz, Nestlé, PepsiCo and Nissin Foods have still not closed the supply chain loopholes allowing tainted Conflict Palm Oil into their global supply chains. Widespread media attention of the November scandal has exposed banks, brands and palm oil traders for their failure to enforce their No deforestation commitments, even after years of repeatedly being presented evidence of their exposure to the destruction.
RAN’s investigation, involving the use of commissioned satellites to capture unprecedented, high-resolution imagery showing the extent of the palm oil-driven crisis in the ‘orangutan capital of the world,’ has pressured several of the major players in the palm oil sector to admit culpability and offer fresh assurances they will finally, meaningfully address this long-exposed issue.
RAN’s report called on all brands and traders to stop sourcing illegal palm oil produced within the protected wildlife reserve and to invest in multi stakeholder programs in the province of Aceh and the wider Singkil-Bengkung Trumon region that take immediate actions to address the crisis in this globally important hotspot for biodiversity and carbon sequestration.
There are some positive developments underway, but it is too early to say if these actions will finally, truly, result in an end to illegal deforestation and destruction of carbon rich peat forests that continues to occur at a worrying rate within the protected Rawa Singkil Wildlife Reserve. Some investigations have begun, and encouraging public responses have been issued by brands and traders exposed in the report. Now the key question is, are the actions taken by global brands–– and the agribusiness traders they source from–– enough to stop palm oil expansion in its tracks or will Conflict Palm Oil continue being used to manufacture products making their way into our homes?
Satellite images of Rawa Singkil Wildlife Reserve from 2016 and 2024 clearly show massive illegal deforestation spreading into the interior of the reserve.
COMPANY RESPONSES TO THE ORANGUTAN CAPITAL DEFORESTATION SCANDAL
Brands
Procter and Gamble responded to the report with an announcement of a suspension of sourcing from PT. Global Sawit Semesta (PT.GSS) and PT. Aceh Trumon Anugerah Kita (PT. ATAK) ––the two mills involved in the scandal.
Unilever has had a suspension in place for PT. GSS since the last RAN scandal that caught the palm oil supplier sourcing illegally produced palm oil from inside the Rawa Singkil Wildlife Reserve, but is yet to place PT. ATAK on its public no buy list. In order for these suspensions to be enforced their suppliers need to stop sourcing from the mills exposed in our report.
Nestlé responded to the press claiming they will investigate our findings but has not yet announced a suspension of the two mills involved in the scandal.
PepsiCo, Mondelēz and Nissin Foods have all failed to respond publicly despite being exposed for sourcing illegally produced palm oil from their suppliers.
Nestlé, PepsiCo, and Mondelēz all lack a public grievance list that discloses the actions they are taking in response to their suppliers violations of their No Deforestation, No Peatland and No Exploitation policies.
Traders
Musim Mas, one of the three traders exposed for sourcing illegal palm oil from the Rawa Singkil Wildlife Reserve, was the first to announce a suspension of sourcing from PT. Global Sawit Semesta. Musim Mas states its suspension is due to the mill not providing adequate evidence to clarify the findings in RAN’s investigations. Musim Mas is the only palm oil trader that has a dedicated landscape strategy for Aceh––the Indonesian province where the Leuser Ecosystem is located. In a first for the traders exposed in the report, Musim Mas also issued a new commitment to ‘join coordinated efforts by local, provincial, and central governments, enforcement agencies, NGOs, processors, local mills, and consumer brands to put an end to illegal deforestation in the Rawa Singkil Wildlife Reserve’. This is a positive development that should be followed by its peers that were also exposed––the Royal Golden Eagle Group and Permata Hijau Group.
The Royal Golden Eagle group––via its palm oil arm Apical–announced a suspension on sourcing from PT. Global Sawit Semesta but continues to refer to a denial that has been issued by the mill claiming that it is not sourcing from the broker UD Daya shown to be sourcing illegal palm in case 1 in the report. Apical has not yet issued a commitment to join collective efforts to stop illegal palm oil expansion in the protected reserve in the district of Aceh Selatan––the epicentre of destruction. Its landscape programs are limited to the neighbouring district of Aceh Singkil.
Permata Hijau Group also issued a response but has failed to suspend either mill. Instead, the company states it has asked its supplier––PT. Able Commodities Indonesia––to engage with PT. GSS. Permata Hijau has no substantial investments in programs in Aceh that aim to protect the threatened forests of the Leuser Ecosystem, nor has it committed to investing in the establishment of new programs to address the crisis exposed in RAN’s report.
Wilmar and Golden Agri Resources are two of the world’s largest palm oil producers and traders and both remain at risk of sourcing illegal palm oil from within the reserve from their network of mills in the region. Both have failed to issue a public response to the report.
Mills
PT. GSS issued denials claiming that it is not sourcing from the broker UD Daya shown to be sourcing illegal palm in case 1 in the report.
PT. ATAK has made a suite of commitments to clear up its act and a condition of remaining a supplier to Permata Hijau Group. This is the second time it has done so after being exposed as a new mill that lacked adequate traceability, monitoring and compliance systems to ensure it was not souring illegal palm oil from the reserve. PT. ATAK states it will require its suppliers to stop sourcing from illegal plantations mentioned in our report and others located within the Rawa Singkil Wildlife Reserve. It has ‘reenforced’ its commitment to not source from plantations involved in deforestation since 2016 or located within the reserve and states it will hold supplier workshops, establish a grievance handling team and deforestation monitoring system to monitor their supply shed and develop a response protocol to address any instances of non-compliance by suppliers.
Banks
Despite media attention, all banks named in the report––Singapore’s DBS, UOB, and OCBC; French Bank BNP Paribas; Malaysian banks Maybank and CIMB; Japanese bank MUFG, Rabobank, HSBC and ING––either declined to comment, citing client confidentiality or did not respond.
PALM OIL COLLABORATION GROUP
The Palm Oil Collaboration Group has failed to issue a public response to the concerns raised in the report on its development of the ‘Minimal Smallholder Deforestation (MSD)’ approach––a new loophole providing a pathway for untraceable ‘independent smallholder’ volumes of palm oil to be included in public reporting on the fulfillment of “No Deforestation’ commitments.
CONCLUSION
The primary rainforest habitat and carbon-rich peatlands protected within the Rawa Singkil Wildlife Reserve are some of the highest priority forests for conservation on earth. Yet a lack of enforcement of No Deforestation, No Peatland and No Exploitation policies, effective monitoring and due diligence systems, and investment by household name brands is allowing for a death by a thousand cuts that is now quickly, existentially threatening this lush, irreplaceable natural treasure. There is simply no more time for half measures and unfulfilled promises.
More action is clearly needed to stop illegal palm oil tainting global supply chains and to stop the deforestation crisis in the Orangutan Capital of the World. While many of the responses and new commitments resulting from RAN’s latest investigation are encouraging and offer steps in the right direction, the reality is that piecemeal actions suspending individual actors will not by itself solve the underlying, systemic problems this report brings to light. What is urgently needed is genuine commitments, backed up by real investments, to close the loopholes identified and to address these failures in a sustained, transparent manner that includes full traceability to the plantation level and true accountability for all suppliers.
RAN will continue to monitor the situation and work with all parties to seek solutions that address the crisis unfolding in the Rawa Singkil Wildlife Reserve.