Meet the Real Sukanto Tanoto


Sukanto Tanoto, Lim Sioe Liong & Suharto

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Sukanto Tanoto continues peat clearance despite fire threat

Jakarta, 8 July 2014 – International customers are suspending contracts with Indonesia’s second largest pulp and paper company APRIL, which is part of the RGE Group, as photographic evidence from Greenpeace International shows clearance of rainforests and fire-prone peatland. The Greenpeace evidence comes just a week after a new study shows Indonesia’s forests are disappearing faster than anywhere else in the world.

Office supplies chain Staples recently confirmed that it no longer stocks APRIL products globally, after Greenpeace International identified links to the company in China. Antalis has also confirmed that it will not resume business with APRIL until it implements a Forest Conservation Policy. Greenpeace urges customers of RGE /APRIL such as the world’s largest paper company International Paper, 3M and US retailer Costco to urgently follow their lead.

“APRIL, a member of the Royal Golden Eagle group, has been caught telling its customers it has support from governments and NGOs at the exact same time its bulldozers are out trashing Indonesia’s rainforests and peatlands. Will these customers continue to fall for RGE/APRIL’s PR spin or follow Staples’ lead and suspend contracts with the company?” said forest campaigner at Greenpeace Southeast Asia, Zulfahmi.

A Greenpeace ‘flyover’ in late May documented ongoing clearance of dense forest, and the drainage of peatlands at the site of an APRIL supplier on Padang Island off the coast of Riau. APRIL’s policy claims that the company does not develop land that is of “high conservation value” based on assessments that have been independently peer reviewed by the High Conservation Value Resource Network (HCVRN).  However, Greenpeace International confirmed with the HCVRN that it has peer reviewed assessments for just two, out of 50 concessions that are estimated to supply APRIL. HCVRN has requested that APRIL correct its misleading claim.

Despite these findings, APRIL continues to claim, in documents leaked to Greenpeace, that it has “strong support” from WWF and that the Norwegian Government has endorsed its  “Sustainable Forest Management Policy”. Both WWF and the Norwegian Ambassador to Indonesia have confirmed that these statements are incorrect and that they do not endorse the policy.

“Apparently RGE/APRIL doesn’t consider the clearance of rainforest on areas of deep peat to be in conflict with its conservation commitments. But Indonesia’s forests are disappearing faster than anywhere else in the world precisely because of practices such as these,” said Zulfahmi.

Greenpeace also documented evidence of extensive fires in another of its supplier pulpwood plantations, inside the PT Sumatra Riang Lestari (PT SRL) concession on Rupat Island in Riau Province. According to Greenpeace analysis, fire hotspots are 3.5 times more frequent on deforested peatland than on peatland that has not been cleared by companies like APRIL.

“RGE/APRIL has been quick to blame others, but clearing and draining peatlands are a significant reason for the fires. It’s like dousing your house in petrol and blaming a passing smoker when it all goes up in flames. Until all forests and peatland are fully protected, the fires will continue to take hold,” said Zulfahmi.

APRIL is one of a number of pulp companies related to the Sukanto Tanoto controlled RGE group. The others are Asia Symbol, Sateri, Bahia Speciality Cellulose and Toba Pulp Lestari. RGE’s palm oil subsidiary, Asian Agri, has been embroiled in Indonesia’s biggest tax evasion case and named in a joint UNEP/Interpol report for its links to environmental crimes.

Despite recent major progress from other big plantation companies like Golden Agri Resources, Wilmar, and Asia Pulp & Paper, RGE/APRIL is refusing to immediately stop forest clearance. Greenpeace urges all customers of the group, and its financers which are reported to include Santander and ABN Amro, to suspend business with RGE/APRIL until it implements credible commitments to end its role in deforestation.

Notes to Editor:
1.  Photos of ongoing clearance at PT. Riau Andalan Pulp & Paper (PT RAPP) pulpwood concession on Pulau Pedang, in Riau Province. PT RAPP is a subsidiary of APRIL. Link to images here.
2.  Photos of forest fire scars at PT Sumatra Riang Lestari (PT SRL) pulpwood concession in Rupat Island, in Riau Province. PT SRL is a supplier to APRIL. Link to images here.
3. The Norwegian Embassy in Indonesia, WWF and the High Conservation Value Resource Network confirmations have been communicated directly to Greenpeace International campaigners.
4. The leaked APRIL customer presentation can be viewed here.


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Sukanto Tanoto and Suharto Connection

It is a well known ‘secret’ that Sukanto Tanoto is connected in business with the Suharto family and also Lim Sioe Liong.
How does it started?
Sukanto Tanoto was a business partner of Lim Lioe Liong.
In the 1960s Japan financed pine plantations in the Lake Toba area with an
understanding that a joint venture company would be established to export pulp
to Japan. A decade later, Indonesia’s President Soeharto contacted Liem Sioe
Liong, head of the Salim Group, to find an entrepreneur willing to undertake
the venture. Liem recommended his friend, Sukanto Tanoto, ‘king of the
plywood industry’. Tanoto’s younger brother, Polar, ‘was an engineer [with]
experience in the pulp industry’ (Polar Tanoto got an engineering degree from Taiwan). The Tanotos’ PT Raja Garuda
Mas, became holding company for the new PT Inti Indorayon Utama (and
later, its new sister company, PT Riau Andalan Pulp and Paper, discussed
Indorayon was originally a ‘joint venture of Canadian, Korean, and Indonesian partners backed by the president’s oldest son’. In 1992, Indorayon’s 405 million shares were held as follows:
PT Adimitra Rayapratama 102 million shares (25%)
Sukanto Tanoto 98 million shares (24%)
PT Indorayonesia Lestari 75 million shares (19%)
Other public corporations 43 million shares (11%)
Scan Fiber Co., SA 37.5 million shares (9%)
Cellulosa Int. SA 25 million shares (6%)
Polar Yanto Tanoto 23.5 million shares (6%)
Tanoto has close connection with, Tirtamas (Hashim Djojohadikusumo, brother of Prabowo,  and his sister-in-law, Titiek Prabowo), Marison Nusantara (Akbar Tanjung).
All the shares in Tantono companies are overlapped with Salim and Suharto Family’s
Probosutedjo, a younger stepbrother of Soeharto was known in the late 1970s
to be close to the Raja Garuda Mas (RGM) Group, a business conglomerate
active in forestry, paper & pulp, palm oil manufacturing and coal mining in
Indonesia (North Sumatra, Riau & South Kalimantan) and Malaysia (Riau).
RGM also has several overlapping companies with the Salim Group, in which
the Suharto family are represented by Sudwikatmono, Suharto’s cousin, and
two of the Suharto siblings, Sigit Harjojudanto and Siti Haryanti Rukmana
(Tutut), who are both co-shareholders of Salim’s financial flagship, Bank
Central Asia. It also has some overlapping shares with the family of Golkar
chairman, Akbar Tanjung, through the Tanjung family’s business vehicle, PT
Marison Nusantara.
Sandwell, from Canada, and Jaakko Po¨yry, from Finland, conducted initial
engineering studies for Indorayon in 1983–84. The Government of Indonesia
arranged funding through national banks. Road construction began in 1986, as
did establishment of timber plantations on 236,000 ha of forestry concessions
(HPH). These actions were taken ‘without prior consultation with the
community or any local groups’ (Tanjung 1992). Soon after, a landslide,
blamed on Indorayon’s poor engineering of logging roads, buried a village.
Construction proceeded with government protection.6
Trial operations began at the Indorayon mill in May 1988. Three months
later, the mill’s aeration lagoon burst, sending raw chemical waste into the
Asahan River (Sungai Asahan), and into the water supply for villages and
industries downstream. In December, WALHI, and YLBH sued Indorayon and
government officials, alleging the company’s failure to conduct an
environmental impact assessment and the government’s failure to enforce
new environmental regulations. Although ultimately losing the suit, WALHI
and YLBH set an important legal precedent, establishing Indonesian NGOs’
standing to sue corporations and government officials (Moniaga, 1993; Fox,
1994; Eldridge, 1995).
The most widely publicised conflict between Indorayon and its neighbours
occurred in 1989, concerning the company’s right to plant eucalyptus seedlings
in its concession area. Angered at Indorayon’s incursion into traditional cattle
grazing areas, Batak villagers ‘systematically [cut] down some 16,000 trees
planted by the company’ (Eldridge, 1995:116–7). The company sought and
obtained military protection for its forest operations. Ten village women were
jailed on charges related to the protest. Legal proceedings ensued (Simbolon,
1991; Sayadi et al., 1992).
In May 1989, students in Medan held a large demonstration in support of the
communities in conflict with Indorayon. Church activists,7 environmentalists
and others called on the Government of Indonesia to force Indorayon to respect
community rights; protesters also called for a halt to further pulp mill
development throughout the country.
Indorayon’s management had different ideas, however. The firm went public
on the Jakarta Stock Exchange in May 1990 to finance expansion. With 10
million Finnmarks from government-run Export Credit Ltd., Jaakko Po¨yry
helped Indorayon develop a new plantation programme (Ulvila, 1994). In
support of the company, the Government of Indonesia cracked down on unrest
in the Lake Toba area. The Study Group for the Development of Community
Initiative (KSPPM),8 a church-organised NGO involved in the Indorayon
conflict, was ordered to cease operations for two months (Jones 1994). A
congress by the ‘trouble-making’ church was cancelled. Lawsuits wended their
way through the courts. Indorayon’s expansion proceeded.
Students and environmentalists persisted in efforts to bring attention to the
Indorayon mill’s social and environmental impacts. Activists in Medan
established a new NGO to examine pulp industry development in Indonesia.
WALHI staff wrote lengthy articles about the company in the Indonesian and
English editions of the network’s magazine (cf. WALHI 1992b; WALHI
1992a).9 Separately, human rights advocates documented government efforts
to silence Batak church activists (see Eldridge, 1995; Jones, 1994).
Then, on November 5, 1993, a boiler exploded at Indorayon, showering the
countryside with chemicals. Scared of ‘another Bhopal’ – of chemicals
contaminating themselves, their children, rice fields, and livestock – ten
thousand people reportedly left the area by any means at their disposal. ‘People
walked until they could walk no more; if they had access to a vehicle, they
drove until they ran out of gas’, one local resident recounted.
Again, community activists and their Medan-based supporters demanded
government action against Indorayon. NGOs documented the company’s
history of industrial accidents and raised serious questions about effects of
chemical exposure (cf. WIM, 1994a). One month later, Sarwono
Kusumaatmadja, new minister of Indonesia’s Environmental Impact
Management Agency (BAPEDAL), shut the mill down until it could be
inspected. After a thorough inspection, Indorayon was allowed to resume
partial operations. The firm was required to submit to an independent
environmental audit, correct any flaws discovered in the audit, and be
reinspected before resuming full operations.10
Attempting to address activists’ more general concerns about pulp industry
development in Indonesia following the Indorayon boiler explosion, Minister
Sarwono went even further. An engineer by training and a former Islamic
student activist, he declared that, henceforth, any new pulp mill built in
Indonesia would have to use the more environmentally friendly elementally
chlorine-free (ECF) pulping technology (World Paper, 1994a).11 ‘We want
your investments’, he told delegates at a UNIDO co-sponsored conference on
clean production, ‘but don’t come to Indonesia expecting to build factories
with anything less [environmentally friendly] than what you are using in your
own countries’ (Kusumaatmadja, 1994).