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Copenhagen special: Tuva and Indonesia

23 December 2009

The chainsaw massacre

by Cedric Gouverneur

The Indonesian conglomerates behind the rush for palm oil are well known for their collusion with the dictatorship of General Suharto (1965-98). The Raja Garuda Mas group belongs to Sukanto Tanoto, the richest man in the country.Greenpeace has accused its subsidiary Asian Agri of destroying the orangutans’ habitat in Borneo. Its competitor, Sinar Mas is run by Eka Tjipta Widjaja, who was also close to Suharto and is now the third-richest person in the country. His subsidiary, Asia Pulp & Paper, was blacklisted for its indiscriminate deforestation in Indonesia, China and Cambodia, leading the US office supply chains Office Depot and Staples to switch suppliers.

Lapindo Brantas, a subsidiary of the Bakrie & Brothers conglomerate, was responsible for the drilling which in May 2006 led to a mudslide in Porong, Java. Boiling mud poured from a fracture at a rate of 125,000 m3 a day, covering hundreds of hectares of land. Thousands of villagers lost everything. Bakrie’s response was to dispose of its subsidiary to an offshore company. Lapindo Brantas stopped its aid to the victims without explanation. Astonishingly, the head of the company, Aburizal Bakrie, is the minister for social affairs. Other big shots in the palm oil business include the Malaysian William Kuok Khoon Hong and the Indonesian Martua Sitorus, who founded the Wilmar group, which has been accused of forest burning in order to increase its land holdings as cheaply as possible.

In order to green up their image, all these companies became members of the Roundtable on Sustainable Palm Oil (RSPO). This organisation was founded in 2004 and has 300 members, and brings together producers, banks, clients and some NGOs. As its name suggests, its aim is to promote sustainable development. Unilever, Nestlé, Cargill, the British biofuel company Greenergy and the Dutch BioX Group BV pride themselves on only sourcing from RSPO members. BNP Paribas, Deutsche Bank and the Royal Bank of Scotland all claim that their Indonesian clients respect the environment. (Crédit Suisse and the Dutch banks Rabo Bank and ABN Amro declined to comment.) HSBC said it planned to terminate its relationship with some of its Indonesian clients in 2009 on environmental grounds.

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