The rapid expansion of Indonesian oil palm plantations creates serious environmental and social problems: vast amount of valuable forests are converted into plantations; habitats of protected species are endangered; significant greenhouse gas emissions are caused by peatland development; and many communities lose access to land which is crucial for their subsistence and to which they have held legal or customary rights for generations.
To solve these problems, the driving forces behind the strong growth of the oil palm sector – its owner and financiers – need to take their responsibility. This study therefore analyses the ownership and financing of 25 corporate business groups active in the Indonesian palm oil sector, which account for a large part of the existing plantations and which are developing very sizable landbanks into new plantations.
What there 25 business groups have in common is that each of them is controlled by a tycoon. This word stems from the Japanese word taikun (大物, which literally means “Great Lord”). It is now commonly used to refer to wealthy business magnates who – often together with their family – control groups of companies which are active in various business sector, such as plantations, mining, energy, real estate, finance and services.
The study explores in particular:
- which part of the Indonesian palm oil sector is dominated by tycoon-controlled business groups;
- who the tycoons are who control these groups; and
- which banks are supporting these tycoons to build their palm oil groups.