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The Chain: Salim Group reportedly acquires four concessions in West Papua

June 13, 2016

Indofoods’ parent Salim Group has reportedly acquired four palm oil concessions in West Papua. These four plantations are currently clearing forests and setting up nurseries on 117,000 hectares. The four plantations are: PT Rimbun Sawit Papua, PT Subur Karunia Raya, PT Bintuni Agro Prima Perkasa and PT Menara Wasior.

The four contested plantations have the same business addresses owned by the Salim Group, according to deeds reviewed by the Indonesian NGO awas MIFEE and as reported in Mongabay. In fact, many of the directors of the four plantation companies have worked in senior management previously for the Salim Group.

Awas MIFEE found that the Salim Group owns these four plantations through a complex network of interlocking directorships and shell companies.

This is how it works:

  • First, Anthoni Salim directly and indirectly controls First Pacific Company Limited (142:HK). The company is publicly listed company on the Hong Kong Stock Exchange. First Pacific has not disclosed ownership of these four plantations through its securities filings as required by the Hong Kong Stock Exchange.
  • Second, First Pacific Company Limited owns an indirect subsidiary called CAB Holdings Limited. CAB Holdings, in turn, owns 50.07% of the Indonesian food production business PT Indofood Sukses Makmur. PT Indofood Sukses Makmur trades on the Indonesian Stock Exchange (INDF:IJ), but has not disclosed ownership of these four plantations through its securities filings there. PT Indofood Sukses Makmur is a major Indonesian company whose brands include the following licenses: Pepsi, 7Up, Asahi, Tropicana Twister, Indomilk, Cheetos, Lay’s, Maggi, Indomie instant noodles, and many others.
  • Third, the Salim Group also lists its subsidiary agribusiness plantation and producer business, Indofood Agri Resources (FAR:SP) on the Singapore Exchange – but Indofood Agri Resources has not disclosed ownership of these four plantations through its securities filings there. As reported by awas MIFEE and Mongabay, the Salim Group appears to be violating its own sustainability guidelines for Indofood Agri Resources, which includes a “ban on converting ecologically important High Conservation Value areas.”

It is unclear how the Salim Group’s deforestation activities on 117,000 hectares in West Papua will impact their licensing deals with major corporations who have existing zero-deforestation commitments. For example, PepsiCo has an existing commitment to source exclusively 100% RSPO certified sustainable palm oil confirmed to have originated from responsible and sustainable, sources, and exclusively through suppliers who are members of the RSPO; among several other standards. Many of the other brands licensed by the Salim Group and its subsidiaries have their own responsible sourcing standards, as well.

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