Sinar Mas limits no-deforestation policies to flagship companies

Oct 2021

The Sinar Mas group, owned by the Widjaja family, is one of the largest conglomerates in Indonesia. Its flagship companies Asia Pulp & Paper (APP) and Golden Agri-Resources (GAR) have no-deforestation commitments. However, some Sinar Mas companies are not under the scrutiny of such policies. Aidenvironment documents at least 6,000 hectares of forest clearing inside Sinar Mas’ coal mining concession PT Berau Coal since September 2016. Another Sinar Mas company, PT Hutan Rindang Banua, cleared 960 hectares of forests for industrial trees since 2017. Aidenvironment urges Sinar Mas to adopt no-deforestation commitments at a company group level.

Sinar Mas was the largest coal mining company group of Indonesia in 2020, with a total production of 56.7 million tonnes. Its main coal mining companies are the 60%-owned PT Dian Swastatika Sentosa (South Kalimantan) and the 80%-owned PT Berau Coal (East Kalimantan). Forest clearing inside PT Berau Coal’s concession amounted to at least 6,000 hectares since September 2016. The deforestation took place at and around the Binungan blocks 8, 9 and 10 in Berau province.

Figure-1. Deforestation inside Sinar Mas’ PT Berau Coal concession

In South Kalimantan, Sinar Mas has an industrial tree concession of 265,095 hectares: PT Hutan Rindang Banua. The company is part of the IDX-listed PT Dian Swastatika Sentosa. The area of PT Hutan Rindang Banua overlaps with several oil palm planted areas and coal mining operations of other company groups, yet PT Hutan Rindang Banua does also have its own industrial tree operations. In one area PT Hutan Rindang Banua cleared 960 hectares of forests since 2017, with the aim of planting industrial trees. Deforestation in that area continued in 2021. PT Hutan Rindang Banua is not part of Sinar Mas’ pulp and paper giant APP, and also not an APP supplier.

Figure 2. Deforestation for industrial trees by Sinar Mas PT Hutan Rindang Banua

APP, Indonesia’s largest pulp and paper company, does have a no-deforestation commitment. A February 2021 study by Trase noted a 85% deforestation reduction in the period 2015-2019 compared to the period 2010-2012, inside the 91 concessions that supplied wood fibre to the Indonesian pulp mills of Sinar Mas, Royal Golden Eagle and Marubeni. Calculations by Aidenvironment over 2020 and 2021 show that even the three largest deforesting plantation companies supplying APP did together not clear more than 500 hectares of forests in one year. One of these three largest deforesting plantation companies was PT Satria Perkasa Agung, located in Sumatra’s Riau province. It cleared 306 hectares of peatland forests since July 2019.

Figure 3. Clearing of peatland forests by PT Satria Perkasa Agung

APP plans to largely increase its pulp making capacity in Indonesia. NGOs have pointed at existing social conflicts on its present productive land and possible future deforestation due to the expansion. APP has stated that it will stick to its zero-deforestation pledge.

A draft of this news item was sent for review to Sinar Mas, yet Sinar Mas has not responded.

For more information please contact Albert ten Kate