Today, Greenpeace International is reporting on its multi-year investigation into companies found to have wide-ranging connections to Royal Golden Eagle (RGE), a major international pulp and palm oil group which is acknowledged to be controlled by Indonesian tycoon Sukanto Tanoto. The Under The Eagle's Shadow report sets out strong evidence that the entities investigated are 'shadow' companies under common control with the RGE/Tanoto group, and argues that in the interests of the precautionary principle, they should be treated as such. Shadow companies are unacknowledged assets of a group, often held in offshore secrecy jurisdictions, which can allow the group to dodge accountability for environmental and social harms, including deforestation.
The evidence in the report includes links to numerous companies with deforestation in their concessions during the last few years, including the two largest destroyers of Indonesian forest (including orangutan habitat) for pulp and paper in 2022 and 2023, and the second largest deforester for palm oil in 2023.[1] The report concludes that under a precautionary approach, the 194 Indonesian and 63 overseas holding companies investigated in the report should be considered part of the RGE/Tanoto Group. RGE denies control of these entities, but Greenpeace International nevertheless believes that the RGE/Tanoto Group should be held accountable for any social or environmental harms resulting from the operations of these companies.
After decades of NGO and consumer action, Indonesia's deforestation rate had thankfully been falling. But the past few years has seen a resurgence of forest conversion to plantations, especially for pulpwood, but also for palm oil, and the use of shadow companies by established corporate groups appears to be one of the main factors driving this resurgent destruction. Therefore, Greenpeace International undertook this investigation into one of Indonesia's largest resources companies by applying the 'Shining Light on the Shadows' methodology to show how brands, banks and sustainability certification schemes can - and should - do similar in-depth research into companies linked to environmental destruction themselves.
Kiki Taufik, Head of Greenpeace Indonesia's Forest Campaign said: "The buying public have spoken: they don't want goods made from deforestation. To keep their products on shelves, brands promised to stop buying from corporate groups that clear Indonesia's forests and drain its peatlands. But those groups want to have their cake and eat it too. They must be willing to operate more transparently - not hiding assets in offshore havens, obscuring the risk that deforestation-free supply chains could actually still be connected to deforestation."
When the plantation concessions investigated as shadow companies are also taken into account, a total of 68,000 hectares (ha) of deforestation occurred in all concessions believed to be under common control with the RGE/Tanoto group from the start of 2021 until May 2024. That is an area about the size of Jakarta destroyed in less than four years. This includes nearly 36,000 ha of deforestation on land mapped as peat - a disaster not just for local people but for the global climate.
There is also rapid development of processing infrastructure that can drive new deforestation - new palm oil mills and a massive new pulp mill in North Kalimantan with enough capacity to put a fresh dent in Borneo's forests.
Refki Saputra, Greenpeace Indonesia forest campaigner said: "If they wish to stay clean, brands need to evaluate this evidence and end their involvement in deforestation via RGE. Likewise, since an RGE company is applying to rejoin the Forest Stewardship Council (FSC), the FSC should investigate all the companies identified in the report. If any are confirmed as under the control of RGE/Tanoto group, then the FSC remedy process must be terminated.
"Furthermore, the Indonesian people deserve to know who controls land, and who decides if forests stand or fall. The government must enforce transparency and stamp out the use of shadow companies."
