On December 4, 2019, Yayasan Auriga Nusantara submitted a complaint to the Forest Stewardship Council (FSC) about PT Bukit Muria Jaya, a paper and packaging processor based in Karawang, West Java, owned by Djarum Group. The complaint indicates that the majority shareholder of PT Bukit Muria Jaya, Mr. Robert Budi Hartono, is a shareholder of two pulpwood plantation companies in East Kalimantan that have cleared over 32,000 hectares of natural forest for conversion to plantations during 2013-2017. This includes more than 17,500 hectares of deforestation between 2015 and 2017, exceeding FSC’s threshold of 10,000 hectares deforestation occuring within the last five years for Policy for Association violations.
According to the FSC’s Policy for Association, an individual with a minimum ownership of 51% in an organization associated with FSC is deemed to have “indirect involvement” if it is “a shareholder or Board of Directors to an organization directly involved in unacceptable activities”. Auriga, as part of the Koalisi Anti Mafia Hutan, documented significant forest loss in PT Fajar Surya Swadaya and PT Silva Rimba Lestari in a report published in August 2018. Mr. Robert Budi Hartono is an indirect shareholder of both concession companies, along with other members of the Hartono family, according to official documents from Indonesia’s Ministry of Law and Human Rights.
As a result of the forest loss in PT Fajar Surya Swadaya, Asia Pulp & Paper, Indonesia’s largest pulp and paper producer, announced in August 2018 that it had cut the company as a supplier to its pulp mill in Sumatra since the forest conversion violated its high-profile commitment to not source wood from High Carbon Stock areas. APRIL Group, Indonesia’s second largest pulp and paper producer, continued to accept large quantities of pulpwood from PT Fajar Surya Swadaya at least through 2018, apparently in violation of its commitment to not source wood from plantations that have converted forest areas after June 2015.
Djarum Group’s subsidiaries, with shareholdings by Mr. Robert Budi Hartono and other members of the Hartono family, own licenses for five industrial pulpwood concessions (hutan tanaman industri, or HTI) inalimantan, including PT Fajar Surya Swadaya and PT Silva Rimba Lestari. Land cover maps from Indonesia’s Ministry of Environment and Forestry indicate that substantial areas of natural forest remain within these concessions, and data from Global Forest Watch indicates that forest conversion has already occurred in several of the concessions. Publicly available records of timber royalty payments indicate that the HTI concession companies have harvested significant volumes of natural forest wood, including protected species like ironwood.
Djarum Group has not yet publicly committed to a policy of No Deforestation, No Peatland development, and No Exploitation of local communities in its forestry operations (i.e. NDPE policy). The Group, through subsidiary PT Agra Bareksa Indonesia, has recently commissioned a wood chip mill in East Kalimantan near Balikpapan, according to the SVLK certification records, and media reports indicate it has plans to build a pulp mill at the site.