6/5/24, 1:19 PM The Chain: Continued Deforestation and Ownership Confusion in Fangiono Family-linked Groups - Chain Reaction Research

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GEOGRAPHY

Africa

The Chain: Continued Latin America

Deforestation and
Southeast Asia

Ownership Confusion in ARCHIVES

Fangiono Family-linked July 2023

June 2023

Groups December 2022

October 2022
September 2022
 Palm Oil • Southeast Asia
August 2022
 December 11, 2020
July 2022
May 2022
A new report by Forest Peoples Programme (FPP) sheds light on the ownership overlap between three
April 2022
Indonesian companies, First Resources, FAP Agri (FAP), and Ciliandry Angky Abadi (CAA). The three
March 2022
companies are all linked to Indonesia’s Fangiono family, have been among the largest deforesters in the
January 2022
last few years, and supply several buyers with NDPE policies.
December 2021

The Singapore Exchange Limited-listed First Resources is majority owned by the Singaporean company November 2021

Eight Capital Inc. (64.7 percent), an entity wholly owned by three members of the Fangiono family, October 2021

namely Ciliandra Fangiono (CEO First Resources), Sigih Fangiono (Deputy CEO First Resources), and September 2021

Wirashery Fangiono. FAP is 95 percent owned by Prinsep Management Ltd, a trust based in the British August 2021

Virgin Islands. Prinsep is linked to the Fangiono family via its previously owned interests in Surya Dumai June 2021

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Industri Tbk, which is owned by members of the family and part of its Surya Dumai Group. The May 2021
remaining 5 percent interest of FAP is owned by PT Fangiono Perkasa Sejati (PT FPS). PT FPS used to be April 2021
owned by six Fangiono siblings and is currently owned by Wirastuty, Ciliandrew, and Matthew March 2021
Fangiono. CAA is owned by Sima Capital (95 percent), which is registered in the Cayman Islands. The February 2021
remaining 5 percent is owned by Silvia Caroline (the second wife of Martias Fangiono). CAA’s holding January 2021
company, PT Ciliandry Anky Abadi, is owned by Sima Investasi Bersama, whose principal shareholders December 2020
are PT FNG Kapital Investama and PT FNG Boga Nusantara – both of which are majority owned by November 2020
Ciliandry and Wiras Anky Fangiono. CAA used to be owned by Martias Fangiono, Silvia Caroline, and October 2020
their children Ciliandry Fangiono and Wiras Anky Fangiono. September 2020
August 2020
The overlap in ownership between these three companies has been previously documented by Chain
July 2020
Reaction Research in our shadow companies report and by Greenpeace in its high-profile Final
June 2020
Countdown report in 2018. FPP further claims that:
May 2020

First Resources controls tens of other subsidiaries through family members linked to FAP and CAA. April 2020
However, CAA and FAP are not included in First Resources’ Roundtable on Sustainable Palm Oil March 2020
(RSPO) membership. February 2020
First Resources is able to exert influence over FAP Agri and CAA subsidiaries through family, January 2020

management ,and operational control. The three groups share resources and staff. December 2019
Social conflicts have been documented in all but one of CAA’s subsidiaries. Since 2014, CAA-linked November 2019
companies have contributed to over 4,000 hectares (ha) of peat forest destruction. FAP concessions October 2019
have also recorded several social conflicts, and FAP has contributed to over 59,000 ha of forest loss September 2019
since 2008. August 2019
July 2019
First Resources has denied any ownership relationship with CAA. In 2018, the company stated that CAA June 2019
is not a subsidiary, an associated company, or a related party of First Resources. Moreover, the May 2019
company also said that it does not have any financial or operational relationship with CAA, there is no April 2019
management overlap, and it does not buy palm oil from CAA. In 2017, First Resources denied ownership March 2019
links with FAP, saying it “is not a subsidiary or an associated company of First Resources. It is an February 2019
external supplier to First Resources, supplying us crude palm oil for our downstream business.” The January 2019
industry has accepted these denials, and the groups are generally treated as separate groups by palm December 2018
oil buyers. November 2018
October 2018
The three groups’ sustainability issues have received substantial coverage over the years. First
September 2018
Resources was the subject of three high-profile RSPO complaints against its subsidiary PT Limpah
August 2018
Sejahtera in 2010, PT Borneo Surya Mining Jaya in 2012, and PT Swadaya Mukti Prakarsa in 2018. In
July 2018
2018, Greenpeace detailed the ownership links between the groups and CAA’s deforestation in a major
June 2018
report. Deforestation by the three groups has been documented by Mighty Earth in its Rapid Response
May 2018
reports.
April 2018

These sustainability issues have continued in 2020. First Resources has a No Deforestation, No Peat, No February 2018

Exploitation (NDPE) policy. However, analysis by Aidenvironment and Earth Equalizer shows around January 2018

100 ha of forest and peat have been cleared on three First Resources concessions this year. In December 2017

September, the RSPO accepted a complaint to the RSPO against First Resources. The complaint claims November 2017

First Resources has cleared High Conservation Value forest within one of its concessions and is October 2017

implicated in the development of a road cutting through a wildlife corridor. The complaint appears to September 2017

be linked to a public petition accusing First Resources’ subsidiary PT Wahana Prima Sejati of clearing August 2017

“several dozen hectares of high-biodiversity secondary forest on the eastern coast of Borneo to build a July 2017

palm oil refinery, a biodiesel plant and related infrastructure.” June 2017
May 2017

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CAA has a landbank of approximately 130,000 ha. Its concessions are mainly located in Central April 2017
Kalimantan, with one in East Kalimantan, one in Riau in Sumatra, and one in Papua. Between January March 2017
and October 2020, CAA Group cleared approximately 3,200 ha of forest and peat on three of its February 2017
concessions: PT Agrindo Green Lestari, PT Citra Agro Abadi, and PT Inti Kebun Sari. CAA was the fourth January 2017
largest deforester in Southeast Asia in 2018 and the third largest during the first six months of 2020. December 2016
November 2016
Graphic 1: Deforestation on CAA’s PT Citra Agro Abadi in Kalimantan totaled
October 2016
approximately 3,000 ha between January and October 2020
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015

Source: Aidenvironment & Earth Equalizer December 2014

November 2014
Despite these known sustainability issues, First Resources supplies several midstream and downstream October 2014
buyers with NDPE policies, including AAK, ADM, Bunge, Cargill , COFCO International, Fuji Oil, HSA September 2014
Group/Pacific Inter-Link, KLK, LDC , Neste Oil, Nisshin, Avon, Colgate-Palmolive, Danone , Friesland August 2014
Campina, General Mills, Johnson & Johnson, Kellogg’s, L’Oréal, Mondelē z, Nestlé, P&G, PepsiCo, PZ July 2014
Cussons, Reckitt Benckiser , Hershey, Upfield and Vandemoortele. Several buyers with NDPE policies, May 2014
including Wilmar, Golden Agri Resources, and Musim Mas, have suspended CAA in the last two years April 2014
because of policy violations. CAA still appear in the supply chains of Itochu Corporation, Avon, L’Oréal, March 2014
and Hershey. February 2014
December 2013
Inconsistency over what constitutes a group, the use of “shadow companies” to circumvent NDPE
November 2013
policy compliance, and the lack of transparency over ultimate beneficial owners are just three of the
challenges impeding full NDPE compliance in the palm oil industry. FPP is calling on the RSPO to bring
clarity to the issue of beneficial ownership, asking the organization to issue a formal complaint against
First Resources and include a beneficial ownership transparency indicator for RSPO membership. This
would include:

Mandating RSPO-member companies and groups to obtain and hold up-to-date information on
their subsidiaries’ beneficial ownership and make such information readily available upon request.
Mandating RSPO-member companies and groups to notify the RSPO when their beneficial
ownership information changes.

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Sanctions for RSPO-member companies and groups that fail to provide accurate and up-to-date
information on beneficial ownership.
Placing the burden of proof to demonstrate beneficial ownership on RSPO-member companies,
groups, and associates.
The RSPO appointing a representative to verify and monitor the accuracy of the information
provided by RSPO-member companies and groups.
The RSPO freezing the permits and certification of companies that do not comply with laws around
beneficial ownership in Indonesia (Under Presidential Regulation No.13/2018 corporations in
Indonesia should declare their beneficial owners).

RSPO action to tackle lack of transparency in ultimate beneficial ownership could significantly
contribute to the transformation of the palm oil industry. It could prevent situations like this, where
three groups are considered separate simply because limited transparency inhibits confirmation of
their ownership links. Any action taken by the RSPO could then be mirrored by action by companies
with NDPE policies.

 NDPE, Palm Oil

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