There is strong evidence that the Salim Group has been acquiring and starting to develop oil palm concessions in West Papua province, which could result in the conversion of 117,000 hectares of forest and grassland to oil palm.

The Salim Group is one of Indonesia’s biggest business conglomerates and it’s main agribusiness division, Indofood Agri Resources, is the third largest private producer of crude palm oil. (( https://d3n8a8pro7vhmx.cloudfront.net/rainforestactionnetwork/pages/14786/attachments/original/1442856231/Full_Report_Palm_Oil_Sustainability_Assessment_of_Indofood_Agri_Resources.pdf?1442856231 )) Although many other major producers such as Musim Mas, Wilmar and Sinar Mas have all cancelled expansion plans in Papua after signing up to commitments to avoid deforestation and peatland development, the Salim Group has made no such pledge.

Four plantations in West Papua province are thought to be linked to the Salim Group, some of which are already operational. Work started on PT Rimbun Sawit Papua towards the end of 2015 and environmental groups also believe that another company PT Subur Karunia Raya has established an oil palm nursery. A third concession, PT Bintuni Agro Prima Perkasa, has reportedly planted an area of food crops to win the support of local indigenous people. The last company, PT Menara Wasior, is still engaged in the permit process.

Examining the deeds for these four companies shows they are all registered to addresses associated with the Salim Group, and many of their directors have experience working for other Salim Group companies. However, none of them have been incorporated as subsidiaries of Indofood Agri Resources (Indo Agri) which is listed on the Singapore stock exchange, nor any other publicly-traded Salim Group company (Jakarta-listed IndoAgri subsidiaries Salim Ivomas Pratama or London Sumatra, or Hong Kong-listed parent company First Resources).

A strong possibility is that these plantation companies are held by shell companies under the ultimate control of Salim Group boss, Antoni Salim. The group is known to hold plantation assets outside the publicly-listed companies, which have previously been incorporated into the main company.

Indo Agri is less exposed to international market pressure to cut deforestation out of supply chains than many other companies as it has a strong domestic market in Indonesia through its link to Salim Group food and supermarket businesses. Nevertheless, Indo Agri makes an attempt to maintain an image of being a responsible company: it has joined the Roundtable on Sustainable Palm Oil (RSPO) and publishes detailed sustainability reports. However, if the same corporate group uses an non-transparent ownership structure to shield a set of plantations which would not meet the RSPO’s environmental and social criteria, then these initiatives are clearly just greenwashing.

Here’s a short description of each of the plantations and a summary of the evidence linking their ownership to the Salim Group:

Rimbun Sawit Papua.

Profile:

Work is believed to have started at some point in 2015 on this concession around the Bomberay transmigration area in Fakfak Regency. ((Based on satellite imagery and photographs in job adverts showing extensive land clearing: http://www.sinarutama.com/lowongan-kerja-ke-papua-2016/ )) By February 2016 the road structure could be clearly seen on satellite photographs, already extending over much of the south-west of the concession. Although part of the concession is forested, the majority is made up of savannah, or grassland, one of the few such areas in West Papua. Some deep peat is thought to exist along the Otaweri River and nearby swamps in the northern part of the concession.

South-west corner of PT Rimbun Sawit Papua on 23/02/2016 shows that the roads have been cut to demarcate plantation blocks

No problems between local indigenous groups and the company have been reported. However the company has hired a recruitment agency, Sinar Utama, to source 1200 male workers from Java to work on the new plantation, (( http://www.sinarutama.com/lowongan-kerja-ke-papua-2016/ ))  and the result of these demographic changes are yet to be seen.

Link to Salim Group:

PT Rimbun Sawit Papua was set up in 2010 by Jeff Setiawan Winata, a businessman from Bandung with experience running businesses in West Papua. In 2011, two companies bought into the business, PT Palmandiri Plantation taking 30% of the shares and PT Sawit Timur Nusantara taking 50%.

The direct owners of both these companies appear to be shell companies. PT Palmandiri Plantation is owned by PT Cahaya Agro Pratama and is registered at Jalan Ahmad Yani kavling 23 no. 15 in Jakarta, an address associated with Salim Group plywood business PT Kayu Lapis Asli Murni (Kalamur). (( PT Kalumur operates a plywood factory in Samarinda, East Kalimantan.. The Jalan Ahmad Yani address is given in several online directories although it is not the official address of PT Kalamur. )) PT Sawit Timur Indonesia is 90% owned by PT Mulia Abadi Lestari. Although the owner of PT Mulia Abadi Lestari is unknown, both companies are registered in the Duta Merlin Office Complex in Jakarta where Salim Group businesses use a range of addresses. Salim Ivomas Pratama also bought a Kalimantan-based oil palm plantation called PT Mitra Inti Sejati from PT Mulia Abadi Lestari in 2007. (( http://indofoodagri.listedcompany.com/newsroom/CompletionofMISP021007.pdf ))

PT Rimbun Sawit Papua’s board of directors is comprised of individuals who have held posts in Salim Group companies. Wiandi Halisantoso has worked for a Salim Group furniture company, PT Rimba Mutiara Kusuma, ((Wiandi Halisantoso’s linkedin page: https://id.linkedin.com/in/wiandi-halisantoso-1136927b )) while Rapman Hutabarat was previously director of PT Palmulya Selaras Abadi, a company registered at a Salim Group address which previously had a permit in Jayapura. (( Information obtained from this court report: http://putusan.mahkamahagung.go.id/putusan/downloadpdf/927d80a7cda35d53244dae163f317a30/pdf PT Palmulya Selaras Abadi’s permit was revoked and the concession given to Musim Mas group companies in 2011. Musim Mas eventually dropped its plans to develop the area. ))

PT Bintuni Agro Prima Perkasa

Profile:

PT Bintuni Agro Prima Perkasa has owned a concession in the Kebar valley west of Manokwari since at least 2009, when it was issued with an initial in-principle permit to release land from the forest estate. The company fell into a period of inactivity for several years, but then was bought by new owners in July 2014. On 29th September that year, on Zukifli Hassan’s last day in office as the outgoing forestry minister in the previous cabinet, he signed the final permit to release 19,369 hectares of land to the company.

Local forest activists have spoken to company employees and report that the company is active around Jandurau village. In the last year it has reportedly planted around 20 hectares of corn, soya and peanuts as an incentive to persuade local indigenous people who hold customary land rights to accept the company’s oil palm plans.

The Kebar valley is located around 100 kilometres West of Manokwari city, along the route of the Sorong-Manokwari road. The valley bottom is known for its grasslands, which are known for a medicinal plant (Biophytum petersianum Klotzsch) which is common in the area.

Link To Salim Group:

Since the 2014 purchase, 99.6% of the shares have been held by PT Cahaya Agro Pratama, which also controls a significant stake in PT Rimbun Sawit Papua. The man named as President Director, Gunawan Sumantri, was Operational Director of a Salim-linked plantation PT Gunta Samba Jaya in 2014, ((  http://kaltim.prokal.co/read/news/52074-pt-gsj-resmikan-pabrik-di-merapun )) and another director, Daud, was previously a commissioner of PT Mega Citra Perdana, PT Gunta Samba and PT Multi Pacific International which were eventually incorporated into PT Salim Ivomas Pratama. (( http://www.firstpacific.com/media/normal/16358_ea060915.pdf)) A commissioner, Wiandi Halisantoso, is also President Director of PT Rimbun Sawit Papua.

PT Subur Karunia Raya

Profile:

PT Subur Karunia Raya’s concession, located on forested land to the north of Bintuni town, had obtained an in-principle permit to degazette state forest land in 2011, but then there were no further reports until a definitive permit to release 38700 hectares of land from the forest estate was granted in May 2014. There are unconfirmed reports that work started on the oil palm nursery on the concession towards the end of 2015, but no specific information is available on the current situation.

Link to Salim Group:

In 2010 the company was bought by PT Mulia Abadi Lestari (see PT Rimbun Sawit Papua above), which now holds a 99.6% share. The remaining stake is held by Director Rapman Hutabarat, who is also on the board of PT Rimbun Sawit Papua. Gunawan Sumantri, President Director of PT Bintuni Agro Prima Perkasa, holds the same role in PT Subur Karunia Raya. On the board of comissioners, Hanan Lukitanto has been President Director of PT Sawit Murni Sejahtera (( http://putusan.mahkamahagung.go.id/putusan/downloadpdf/ee3e8230a2f3589e7036872701dbe027/pdf )) which is registered to another Salim Group address in the Duta Merlin complex, and Daniel Harianto has worked for SIMP subsidiary PT Gunta Samba. (( http://www.iti.ac.id/kemahasiswaan/cdc-iti/vacancy/364-vacancy-at-pt-gunta-samba-perusahaan-perkebunan-kelapa-sawit.html ))

PT Menara Wasior

Profile:

PT Menara Wasior has permits for a 28,280 oil palm plantation in a forested area of Naikere and Kuriwamesa sub-districts of Teluk Wondama Regency in West Papua. It is at a less-advanced stage than the other three concessions as the Forestry and Environment Ministry has not yet granted release of forest estate land for the plantation. Civil Society Organisations have not yet been able to obtain accurate data about concession boundaries.

People from the Mairasi and Miere tribes stated their opposition to the company’s plans in a public consultation in Apri l2015. (( http://pusaka.or.id/suku-mairasi-dan-miere-tanah-tidak-kami-jual/ ))

Many are still traumatised from the ‘Bloody Wasior’ events of 2001, where a wave of violent reprisals against the entire community from the military and police following a kidnapping by an armed has been designated a gross human rights violation by Indonesia’s national human rights commission. ((  Ringkasan Eksekutif – Hasik penyeledikan tim ad hoc penyeledikan pelanggaran HAM yang berat di Papua, Komnas HAM, 07/2004, http://www.komnasham.go.id/sites/default/files/dok-publikasi/Eksum%20Peristiwa%20Wasior%20Wamena.pdf ))  Many people in the area still show the signs of trauma from that time, and more recent incidents involving the logging industry. (( http://pusaka.or.id/seramnya-bisnis-pembalakan-kayu-arta-graha-di-teluk-wondama/ ))

Link to Salim Group:

As with the PT Rimbun Sawit Papua, PT Menara Wasior was set up by businessman Jeff Setiawan Winata, but in December 2014 and January 2015, the company address changed to PT Kayu Lapis Asli Murni’s premises in Jakarta, and the principal shareholder became Borneo-based construction company PT Bumi Surya Kencana. Although no information has been obtained regarding PT Bumi Surya Kencana’s owners, the Board of Directors and Commissioners once again provides a list of names previously linked to presumed Salim Group companies. President Director Rapman Hutabarat and Director Fransiskus Xaverius Purwanto have been directors of companies which previously held permits in the Jayapura area of Papua, PT Palmulya Selaras Abadi and PT Putra Palma Cemerlang respectively. ((  http://putusan.mahkamahagung.go.id/putusan/downloadpdf/2e98ae3647a5af4328b00d978c3d98ba/pdf , http://putusan.mahkamahagung.go.id/putusan/downloadpdf/ee3e8230a2f3589e7036872701dbe027/pdf )) Commissioner Paul Agus Christianto, who says on his Facebook profile (( https://www.facebook.com/paul.a.christianto )) that he works for PT Kayu Lapis Asli Murni, also was connected to another company which previously owned a permit in Jayapura, PT Surya Palma Cemerlang. ((  http://putusan.mahkamahagung.go.id/putusan/downloadpdf/7bbb403a6d48e1d5553348d0b442dab2/pdf ))

Summary and analysis of the Salim Group links:

Although the evidence presented here is not absolute proof that the four companies are directly owned by Antoni Salim or members of his family, there is strong evidence of a connection.

• Three of the four companies are owned by companies which appear to be shell companies, as their names arise infrequently in internet searches. The last is owned by a building contractor which appears to have no existing oil palm plantations.

• Key personnel for all of the plantations have links to Salim Group companies. Some have worked for PT Kayu Lapis Asli Murni, which is known to be a Salim Group company, others for to PT Gunta Samba and other Salim Group plantation assets in Kalimantan, or have been directors of a set of plantation concessions in Jayapura and Sarmi Districts for which the permits were revoked in 2011 due to overlapping claims.

• The registered addresses of the four companies and their principle shareholders are mostly addresses which appear to be linked to the Salim Group. Several can be traced back to the Duta Merlin office complex in downtown Jakarta, where many Salim Group companies are based. Others are at a Jakarta timber yard belonging to PT Kayu Lapis Asli Murni.

It is worth focussing in a little more detail on the link with two Kalimantan plantations, PT Gunta Samba and PT Gunta Samba Jaya, as it highlights the close relationship between the publicly-listed and privately held parts of the Salim Group. PT Gunta Samba was bought by Salim Ivomas Pratama in 2007 from Rascal Holdings Limited, a British Virgin Islands registered firm owned by Anthoni Salim. (( http://www.firstpacific.com/media/normal/16358_ea060915.pdf )) PT Gunta Samba Jaya (alongside several other Salim Group companies with nearby concessions in the East Kutai district of East Kalimantan) was not part of that deal. Its immediate owner now is PT Andhika Wahana Putra, and while that company’s deeds were not available to check if there is still a link to Rascal Holdings Limited, Salim’s supermarket group Indomaret is known to have invested in the company. (( Through the purchase of convertible bonds worth 428 billion Rupiah, to be converted into share capital on expiration: http://www.indoritel.co.id/uploads/DRAFT%20Review%20Konsol%20PT%20Indomarco%20Prismatama%20%28Attach%20Parent%20Entity%29.pdf )) Even though PT Gunta Samba is officially part of Salim Ivomas Pratama and PT Gunta Samba Jaya is not, the two companies remain closely aligned. They are both officially registered at the same address in the Duta Merlin office complex. (( According to the AHU website both are registered at Komplek Duta Merlin Blok B No 22, although in a Plantation Directory published by the Central Statistics Agency both companies lists both companies at the address Komplek Duta Merlin Blok C No 56-57, the same address as one of PT Rimbun Sawit Papua’s two shareholders PT Sawit Timur Nusantara. )) Both companies have described themselves in communications such as job adverts as being part of the Gunta Samba Group, or more recently, Indo Gunta Group. In August 2015 adverts for jobs in Kalimantan and West Papua were sent out on PT Gunta Samba headed paper. ((  http://ft.unram.ac.id/wp-content/uploads/2015/08/Lowongan-PT.Gunta-Samba.pdf )) However, no company declared as a SIMP subsidiary has operational plantations in West Papua – almost certainly the work would be located at PT Rimbun Sawit Papua or PT Subur Karunia Raya.

PT Gunta Samba Jaya came under fire in 2013, for clearing orangutan habitat in Kalimantan. (( RAN and RFN report https://d3n8a8pro7vhmx.cloudfront.net/rainforestactionnetwork/pages/14786/attachments/original/1442856231/Full_Report_Palm_Oil_Sustainability_Assessment_of_Indofood_Agri_Resources.pdf?1442856231 )) When the Centre for Orangutan Protection tried to follow up the case through the RSPO mechanism (presuming that PT Gunta Samba Jaya was related to Indofood Agri subsidiary and RSPO member PT Gunta Samba), Indofood Agri boss Mark Wakeford sent a curt email stating that they ” do not have any shareholding in PT Gunta Samba Jaya and it is not part of the IndoAgri or SIMP Group”.  (( There are reports that Indofood Agri did meet with conservationists and promised to stop work while they devised a management plan  http://www.mongabay.co.id/2013/03/20/update-indofood-agri-akhirnya-sepakat-hentikan-penebangan-habitat-orangutan-di-kaltim/ . However, one year later, another ‘non-official subisdiary’ with a adjacent concession to PT Gunta Samba and PT Gunta Samba Jaya was also found to be destroying orangutan habitat: http://old.orangutan.id/indexina.php?menu=show_weblog.php&id=336&lang=ina  )) As  the oil palm industry faces increasing commercial pressure to clean up its act regarding deforestation, peatland development and exploitation of forest-dependent peoples, presenting an ethically responsible image can be vital to avoid losing customers and investors. The Norwegian Government Pension Fund Global has already divested from the Salim Group’s main public umbrella company,First Pacific, on the grounds of Indo Agri’s environmental destruction. (( https://news.mongabay.com/2016/03/worlds-largest-sovereign-wealth-fund-just-dropped-11-companies-over-deforestation/ ))The Salim Group appears to have reacted to this challenge by picking and choosing which of its plantation assets into its publicly-listed businesses, and carefully shielding the more problematic concessions behind layers of shell companies and offshore firms. In Kalimantan where some of these hidden companies are already operating, they have been found to have been bulldozing the habitat of endangered orangutans – the sort of thing which can be highly damaging to a company’s reputation. The four concessions in Papua.where work is just starting now, will also cause major deforestation and potential conflicts with indigenous communities. Indo Agri, First Pacific and the Indofood brand must be seen as responsible for any problems they create.