Open Letter: Grave Concerns with Financing of Companies Link to Forest, Peat and Land Fires in Indonesia

PrintJakarta, 30th October 2015






Grave Concerns with Financing of Companies Link to Forest, Peat and Land Fires in Indonesia


Chairperson, Financial Services Authority, Indonesia

Chairperson, Financial Services Authority, Members of the European Union

Chairperson, Financial Services Authority, Members of the OECD

At respective offices

Dear Sirs/Madams,

Tuk INDONESIA expresses its our deepest sympathy to Indonesians who have suffered and become victims of worst air pollution due to ongoing burning of forests and land. Burning of forests, land and peat in 2015 continued in Acehi, North Sumatraii, Riauiii, Jambiiv, South Sumatrav, Bengkuluvi, West Kalimantanvii, Central Kalimantanviii, East Kalimantanix, South Kalimantanx, Central Sulawesixi, Moluccasxii, Papuaxiii and West Papua Papuaxiv.

TuK INDONESIA examines and scrutinises at losses due to public health especially vulnerable groups in particular infants, children, women, the elderly and citizens with special needs forced to breathe dirtiest air – the smoke from the fires of burnt forests, land and peat areas can no longer be acceptable for any reasons either in the name of economic development, employment generation, poverty alleviation and State revenues.xv

Smoke and air pollution from land and forest fires are not only polluting Malaysia and Singapore but also loss of life (19)xvi, respiratory infectous diseases (ARD), the closure of public and private schools, public facilities, disruption of domestic, regional and international flights, etc. Greenhouse gas emissions due to fires from burnt forest and peat land that make Indonesia have exceeded the average of the daily carbon emissions of the United States for 26 days from 44 days since the beginning of September 2015.xvii

Tuk INDONESIA supports the Government of Republic of Indonesia (GoI) efforts to impose a moratorium on new permits Indonesiaxviii in primary forests and peatlands, law enforcement, and fire fighting efforts and a reduction in smoke from forest, peat and land fires. It is noticeable that the government has been successfully listed up 413 companies indicated light fires burning forest areas up to 1.7 million hectares.xix

Over 18 Years of Dire Lessons with Fires

Indonesia Environmental Forum (WALHI), Friends of the Earth Indonesiaxx released names of the group of forests and land based companies in Central Kalimantan three (3) subsidiareies of Sinar Mas; and 14 subsidaries of Wilmar. In Riau, 6 subsidiaries of Asia Pulp and Paper (APP), and other subsidiaries of Sinar Mas (6), APRIL (6), Simederby (1), First Resources/Surya Dumai (1) and Provident (1). Fires detected in South Sumatera within Sinar Mas (8) and Wilmar (11), Sampoerna (4), PTPN (3), Simederby (1), Cargill (1) and Marubeni (3). In West Kalimantan fires detected in subsidiaries of Sinar Mas (6), RGM/APRIL (6). In Jambi, Sinar Mas (2) and Wilmar (2).

In addition to WALHI data, the World Resources Institute has been monitoring the fires in 2014xxi and even Greenpeace had also released data on forest and land fires where since 2013 active concessions of RSPO members were responsible for 39% of the total fire spots in oil palm plantations in Riau province.

Active Loans by Financial Institutions and Banksxxii

Between 2009-2013, TuK INDONESIA identified approximately US$ 17.8 billion in loans granted to only 25 tycoons-controlled palm oil groups. These loans are generated from HSBC (UK), OCBC (Singapore), CIMB (Malaysia), Mitsubishi UFJ Financial Group (Japan), DBS (Singapore), Sumitomo Group (Japan), Bank Mandiri (Indonesia), ANZ (Australia), United Overseas Bank (Singapore), Mizuho Financial Group (Japan), Commonwealth Bank of Australia (Australia), Rabobank (Netherlands), BNI 46 (Indonesia), BNP Paribas (France), BRI (Indonesia), Citibank (USA) , Credit Suisse (Switzerland), National Bank of Australia (Australia), Westpac Banking Corporation (Australia), and the Industrial and Commercial Bank of China (China).

Active Underwriters of Palm Oil Sectorxxiii

Total collateral in forms of bank underwriting of shares and bond issuances for 25 palm oil groups to have reached US$ 10.6 billion. Major financing via underwriting schemes in the form of shares and bonds are generated from investment banks, among others RHB Banking Group (Malaysia), Morgan Stanley (USA), Goldman Sachs (United States), Bank of Communications (China), Danatama Makmur (Indonesia), CIMB Group (Malaysia ), Credit Suisse (Switzerland), HSBC (UK), Citibank (USA), AMMB Holdings (Malaysia), BNP Paribas (France), DBS (Singapore), Malayan Banking (Malaysia), Danareksa (Indonesia), Mitsubishi UFJ Financial Group (Japan), Bank Mandiri (Indonesia), Deutsche Bank (Germany), UBS (Switzerland), Bahana Group (Indonesia), and Indo Premier Securities (Indonesia).

Strategic Roles of Otoritas Jasa Keuangan and Financial Institutions

TuK INDONESIA supports the Financial Services Authority of the Republic of Indonesia and international financial services authorities to take strategic steps to prevent and take long term strategic policy measures to prevent financial institutions, State banks and private commercial domestic and international banks engage directly, or either indirectly through second subsidiaries or third party supplier operations involved in burning forest and land in Indonesia.

TuK INDONESIA urges financial institutions and commercial banks especially domestic and international banks to take immediate steps to review and revoke active contracts of loans and other investment facilities for oil palm plantation companies involved in forest and land fires in Indonesia.

Best regards,

Norman Jiwan

Executive Director


People of Indonesia

iv Kebakaran Hutan dan Lahan di Jambi Masih Membara. Akses di

v Satu juta hektar lahan gambut Sumsel terbakar. Akses di

viAktivis Lingkungan Bengkulu Sebut Malaysia dan Singapura Biang Kebakaran Hutan. Akses di

xJokowi Mendadak Cek Ulang Lokasi Kebakaran Lahan Gambut di Kalsel. Akses di

xiiiKebakaran hutan mencapai Sulawesi, Maluku dan Papua. Akses di

xvRomo Magnis: Semua Kepala Daerah di Wilayah Kebakaran Hutan Harus Dipecat.; lihat juga Ada korupsi di balik kabut asap Indonesia. Akses di

xvi 5 died in Central Kalimantan, 5 in South Sumatera, and 5 in Riau, 1 in Jambi, and 3 South Kalimantan. (

xviiGara-gara kabut asap, Indonesia kalahkan AS soal emisi karbon. Akses di

xix Penyebab Kebakaran Hutan Terungkap?. Akses di

xxiTabel titik api 2014 HTI, Sawit, HPH. Akses di

xxiiTuK INDONESIA 2015. Executive Summary: Tycoon-controlled oil palm groups in Indonesia. Access at

xxiiiTuK INDONESIA 2015. Executive Summary: Tycoon-controlled oil palm groups in Indonesia. Access at

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