20/11/2023
For half a decade, one group of companies has cleared more rainforest to cultivate palm oil than any other in Southeast Asia - while the identity of its owners has remained a closely guarded secret.
Today our investigation, Chasing Shadows, presents compelling evidence that this group is secretly controlled by one of the world’s largest palm oil producers, one that claimed to have stopped clearing forests, so it could continue selling to major consumer goods firms across Europe and the US.
Our findings suggest that for more than a decade, while it maintained the facade of a sustainable company, First Resources, majority-owned by the billionaire Fangiono family, operated a vast network of “shadow companies” that ploughed through rainforest in Borneo.
First Resources has been trailed by allegations that it is operating shadow companies since 2018, when Greenpeace highlighted the extensive overlaps between it and two other groups owned by members of the Fangiono family. First Resources has remained steadfast in its denial that it owns or controls the groups.
Our reporters pored over corporate records and interviewed 14 people who worked for First Resources and its alleged shadow companies. While First Resources repudiated or ignored allegations it was linked to the companies, internally — from its training centre, to plantations, to offices — managers made little effort to disguise the fact they were one corporation.
“We thought it was normal, because I knew from the beginning: it’s all First Resources,” said an employee who spent several years working for subsidiaries of First Resources and its shadow groups. “The management is the same, a lot of things are the same. There was nothing strange about it.”
This week, as members of the Roundtable on Sustainable Palm Oil convene in Jakarta for their annual meeting, the case casts a shadow over the organisation. The RSPO has been sitting on a formal complaint that First Resources is controlling shadow companies for two years, without resolution. In that time, forests have fallen and land rights conflicts have simmered in the concessions operated by First Resources’ alleged shadow companies.
The Fangionos may serve as a test case for the efficacy of voluntary sustainability policies for the RSPO and beyond: as our investigation notes, there is mounting evidence that major firms involved in the production and trade of palm oil and timber products have sought to circumvent the restrictions imposed by their own policies by establishing shadow companies.
“In the world of plantations, it seems it's common,” said a former Fangiono company employee. “It's an open secret.”
The investigation is part of Deforestation Inc., a project coordinated by the International Consortium of Investigative Journalists (ICIJ) interrogating the sustainability claims of the forestry and plantation industries worldwide. The results of our investigation will be published by publications across Europe and Asia this week, including Süddeutsche Zeitung, WDR and NDR in Germany, El País in Spain, Follow the Money in the Netherlands, Tempo in Indonesia, and De Tijd, Knack and Le Soir in Belgium.
Extensive evidence suggests corporation selling "sustainable" palm oil hid control of companies destroying rainforest
