Web of shadow companies controlled by RGE allows billionaire tycoon Sukanto Tanoto to avoid accountability for forest destruction and community conflicts over Indigenous land rights
San Francisco, CA – March 18, 2024 – Rainforest Action Network (RAN) has released an investigative report today uncovering the ongoing environmental violations of the Royal Golden Eagle Group (RGE), a multi-billion dollar conglomerate with a history of massive deforestation and accusations of human rights abuses in Indonesia. The report, titled “Exposing Royal Golden Eagle Group’s Sprawling Empire of Destruction,” highlights the failure of major brands and banks to sever ties with RGE despite its destructive practices.
RGE, owned and controlled by Indonesian tycoon Sukanto Tanoto, is one of Indonesia’s largest pulp & paper producers and a significant player in the palm oil industry. The report builds on wide ranging allegations concerning corruption, environmental destruction, human rights violations, and the use of shell companies and offshore corporate ownership structures by RGE, making it a prime example of irresponsible corporate behavior.
“Despite promises to end deforestation, major brands and banks continue to do business with the Royal Golden Eagle Group, turning a blind eye to its destructive practices,” said Fitri Arianti, Senior Forest Campaigner with Rainforest Action Network and a primary author of the report. “RGE’s actions have had devastating impacts on Indigenous communities, tropical rainforests, biodiversity, and the climate.”
The report highlights how RGE, through its shadow company PT. Toba Pulp Lestari (PT. TPL), has continued to clear forests after its stated cut-off date for deforestation in 2015. Satellite imagery analysis commissioned by RAN shows that significant natural forests were cleared within PT. TPL concessions after the cut-off date, violating commitments made by the company, RGE Group, and its customers like Procter & Gamble and Nestlé.
“Local communities have protested PT. Toba Pulp Lestari’s environmental impact and Indigenous rights violations in North Sumatra for decades. This latest evidence of natural forest clearing continues to show the company’s disregard for rights and the environment.” said Delima Silalahi, Director of Kelompok Studi Penguatan Prakarsa Masyarakat (KSPPM), a land rights advocacy group based in North Sumatra.
Furthermore, the report presents an example of the complex network of shadow companies and opaque ownership structures through which RGE operates, enabling it to continue driving deforestation while evading accountability. The evidence presented in the report calls into question RGE’s claims of sustainability and transparency and warns brands and banks that they should not trust the deforestation-free claims made by RGE.
Over a decade ago, RGE’s pulp & paper division APRIL was dropped from the supply chains of Disney and other major publishers after its impacts on Indonesia’s rainforests and Indigenous communities were exposed through global campaigns by RAN. APRIL was dissociated from the Forest Stewardship Council (FSC) and to this day APRIL––and others in the RGE Group––remains on the ‘no-buy’ lists for major consumers of the products it produces. In 2015, the RGE Group and its flagship companies published sustainability policies that committed to no further deforestation after July 2015 and to remedying its many land conflicts. Since then, APRIL has begun working to end its disassociation with the FSC––which will require it to remedy the harm it has caused and demonstrate that no deforestation has taken place since December 2020 across its entire corporate group (defined as the full extent of companies under its control).
The deforestation documented since December 2020 should not only prohibit APRIL’s and PT. TPL’s association with FSC, it should also preclude PT. TPL products from being imported into the EU market under new European Union Deforestation Free Regulation (EUDR), which aims to prevent import of commodities that resulted in deforestation after December 2020.
RAN is calling on brands and banks, including Procter & Gamble, Mondelēz, Colgate-Palmolive, Unilever, Kao, PepsiCo, Nestlé, Nissin Foods, and Mitsubishi UFJ Financial Group (MUFG), to publicly announce immediate suspensions of their relationships with the Royal Golden Eagle Group. The organization urges these actors and the Forest Stewardship Council to thoroughly investigate our findings and ensure that they are no longer complicit in environmental destruction and human rights abuses.
“We cannot allow companies like RGE to continue wreaking havoc on our planet while profiting from unsustainable practices,” Arianti emphasized. “It is time for brands and banks to take a stand for the environment and forest-dependent communities on the frontlines of commodity expansion.”
The RGE Group was contacted for comment on the findings of the report, and a summary of a response received from PT. TPL is included in the publication. PT. TPL denied any deforestation in its operations and violations of the 2015 and 2020 deforestation cut-off dates. Without responding to the detail of findings concerning satellite analysis of locations of deforestation, they stated that PT. TPL did not clear any natural forests and that any land cover change appears to be related to legal and compliant plantation management activities.
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