- A surge of deforestation for oil palm plantations in a Sumatran orangutan reserve means top consumer brands may be selling products with illegal oil palm in them, a new report says.
- Rainforest Action Network (RAN) says satellite imagery shows much of the deforestation in Rawa Singkil Wildlife Reserve occurred from 2021 onward.
- That means any palm oil produced from plantations established on land cleared during that time would be banned from entering the European market under the EU’s antideforestation regulation (EUDR).
- Brands such as Procter & Gamble and palm oil traders like Musim Mas have responded to the findings by dropping as suppliers the mills alleged to be processing palm fruit from the deforested areas.
JAKARTA — Illegal deforestation has reportedly surged to record levels in a wildlife reserve at the northern tip of Indonesia’s Sumatra Island that’s known as the “orangutan capital of the world.”
A newly published report by U.S.-based NGO Rainforest Action Network (RAN) says 2,577 hectares (6,368 acres) of forests in Rawa Singkil Wildlife Reserve have been cleared since 2015, with deforestation spiking dramatically between 2021 and 2023.
RAN said these rates of deforestation are unprecedented over the last decade that it’s been monitoring the region.
And since it occurred after the cutoff date for eligibility for an important “no deforestation” framework, it raises concerns about both deforestation-free commitments and the efficacy of global conservation efforts.
Palm oil from trees grown on this illegally deforested land risks entering the supply chains of major consumer brands like Procter & Gamble, Nestlé, Mondelēz, PepsiCo and Nissin Foods, the report warned.
Some of the brands and palm oil traders have acted in response to the report, including by suspending sourcing from illegal plantations and launching investigations into the matter. But observers question whether these actions are enough to halt illegal deforestation in the wildlife reserve.
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< style=”font-size: 8pt;”>Slider showing illegal plantation development inside Rawa Singkil Wildlife Reserve (02°43’39.42″ N 97°41’28.50 E) developed on Nusantara Atlas. This feature may take a few moments to load due to the satellite image resolution <>
Significance of Rawa Singkil Wildlife Reserve
Rawa Singkil Wildlife Reserve is part of the Leuser Ecosystem, a UNESCO World Heritage Site and one of the last refuges for Sumatra’s endemic and critically endangered orangutans (Pongo abelii), tigers (Panthera tigris sumatrae), rhinos (Dicerorhinus sumatrensis) and elephants (Elephas maximus sumatranus).
It’s particularly notable for having the densest population of Sumatran orangutans anywhere on the island.
Its carbon-rich peatlands are also vital for global climate stability, storing immense amounts of greenhouse gases. However, the ongoing deforestation has reduced the reserve’s size by more than a fifth since 2014.
Deforestation surged sharply after December 2020. That’s a key cutoff date for the European Union’s antideforestation regulation, or EUDR; when it comes into force at the end of this year, the EUDR will require that imports into the EU of certain commodities, including palm oil, do not originate from land deforested after Dec. 31, 2020.
Yet between 2021 and 2023, deforestation rates in Rawa Singkil quadrupled, raising the prospect that palm oil produced from the newly cleared land will be barred from the European market.
These findings indicate that the no-deforestation commitments by palm oil companies operating in the area aren’t strong enough to protect the wildlife reserve from being deforested for the commodity, RAN said.
The findings are also particularly significant because they mark the first time that high-resolution images from Airbus satellites have been used to map the true extent of the deforestation in Rawa Singkil, said David Gaveau, the founder of technology consultancy TheTreeMap, which analyzed the images.
“For the first time, timely satellite images — detailed enough to capture individual palm trees, even young saplings — expose the full scale of the palm oil crisis in this protected wildlife reserve,” he said. “With these advanced tools made public, violations previously missed by free satellite data can now be documented.”
Who’s behind the deforestation?
Investigations by RAN indicate that the deforestation within the reserve is driven by local elites, rather than smallholder farmers. The former tend to be locally influential individuals who wield power and have access to the funding needed for heavy machinery to clear large swaths of forest for oil palm plantations, like those found in Rawa Singkil.
RAN’s investigation also revealed that some of these elites act as land speculators or sales agents by selling titles to plots inside Singkil Wildlife Reserve to outside parties.
RAN identified two palm oil processing mills — PT Global Sawit Semesta (GSS) and PT Aceh Trumon Anugerah Kita (ATAK) — as receiving palm fruit from these plantations. These mills, in turn, sell palm oil to major traders such as Apical (part of the Royal Golden Eagle Group), Musim Mas and Permata Hijau, which in turn supply global brands like Procter & Gamble, Nestlé, Mondelēz, PepsiCo and Nissin Foods.
That means consumers might be unknowingly consuming products made with illegal palm oil linked to deforestation in Rawa Singkil, said Gemma Tillack, forest policy director at RAN.
“Products we buy every day like Olay, Milo, Oreos, Lay’s and CupNoodles are being exposed to illegal palm oil in their supply chains, and we have the receipts to prove it,” she said.
Banks with no-deforestation policies, like MUFG, Rabobank, UBS, HSBC and ING, are also complicit in the destruction of the biodiversity haven in Rawa Singkil through their funding of traders that are exposed to the illegal palm oil, Tillack said.
“The ongoing destruction of one of the world’s most critical ecosystems is a wake-up call for brands, banks and consumers alike,” she said.
The deforestation has also raised concerns that the borders of Rawa Singkil Wildlife Reserve will be shrunk to excise the degraded areas. In 2014, Indonesia’s forestry ministry reduced the size of protected area in Rawa Singkil from 102,400 hectares to approximately 80,000 hectares (253,000 to 198,000 acres).
RAN said it’s concerned the same thing will happen again now that more forest has had been converted to illegal plantations.
In 2022, the government of South Aceh district, where the wildlife reserve is located, requested the forestry ministry to downgrade the status of 47,238 hectares (116,728 acres) of forest land in the district to nonforest, which would allow them to be cleared for plantations.
Responses from brands and traders
Some brands have announced actions in response to RAN’s findings.
Procter & Gamble said it had suspended sourcing from the implicated mills, while Nestlé pledged to investigate the allegations; it hasn’t announced any suspensions to date.
Unilever had previously suspended sourcing from GSS but hasn’t added ATAK to its no-buy list. Meanwhile, PepsiCo, Mondelēz and Nissin Foods haven’t publicly responded to the report.
“So we haven’t received adequate responses from most of the brands, with Procter & Gamble being one that’s quite immediate with the announcement of suspension,” Tillack said.
Among the traders, Musim Mas and the Royal Golden Eagle group, via its palm oil arm Apical, have suspended sourcing from GSS. Permata Hijau has requested its supplier to engage with GSS but hasn’t suspended sourcing from either mill, prompting RAN to call for stronger action.
Golden Agri-Resources (GAR) said it hasn’t sourced from GSS since 2019, but acknowledged risks of indirect sourcing through neighboring mills. GAR said it has engaged with GSS’s neighboring supplier mills and is monitoring their compliance through its traceability system, adding that it has achieved full traceability for 99% of its supply chain as of the end of 2023.
But Tillack questioned the accuracy of GAR’s traceability system, and those of other traders and suppliers.
“We have repeatedly found that the traceability claims made by the traders and their suppliers are not accurate,” she said. “This is why we have called for independent verification of the traceability systems. GAR and others continue to refuse to undertake third party verification of their suppliers’ traceability systems. They rely on second-party traceability programs.”
GAR said it has taken steps to ensure the data in its traceability system is accurate and reliable, which includes remote sensing and performing regular in-person inspections and site visits to validate the data.
To mitigate the risk of sourcing illegal palm oil, GAR said it’s also using a reporting tool called the No Deforestation, No Peat and No Exploitation Implementation Reporting Framework (NDPE IRF), which helps companies understand and track progress on their no-deforestation commitments.
But the use of the NDPE IRF is problematic because the tool is based on self-reported data from suppliers, Tillack said.
Singapore-based Wilmar International, the world’s largest palm oil trader, is also at risk of potentially sourcing illegal oil palm from within the wildlife reserve, given the proximity of its operations to the area, even when it doesn’t source directly from the implicated mills.
In response to the report, Wilmar acknowledged the risk. To mitigate it, Wilmar said, it conducts field visits to verify concerns or allegations for suppliers identified as high risk. It said it also engages with suppliers through webinars, workshops and initiatives like the Leuser Supplier Reporting Tool (LSRT) to assess and address sourcing risks.
“Thus far, all our direct suppliers operating within a 50km [30-mile] radius from the Leuser ecosystem have confirmed that they are not sourcing from the identified high-risk companies,” Wilmar said in an email to Mongabay.
The need for a landscape approach
RAN said addressing the crisis requires more than suspensions or isolated actions. A landscape-level intervention is essential, given the interconnected challenges in the Leuser Ecosystem, which spans a vast area and involves multiple stakeholders, including palm oil producers, local communities and government entities.
Musim Mas is the only trader with a dedicated landscape strategy for the entire Aceh province, according to RAN. Its five-year program, launched in 2020, focuses on implementing no-deforestation policies.
In response to RAN’s latest findings, Musim Mas has issued a new commitment to invest in future landscape programs, a first among the traders named in the report.
Other traders, like Apical, have implemented smaller-scale landscape programs that are limited to certain districts, not the entire province of Aceh. Others like GAR and Wilmar are exploring landscape approaches, with the former saying it’s in discussions to contribute to the Sustainable Trade Initiative’s landscape program for Aceh province.
Wilmar said it’s in discussions with various stakeholders to implement a landscape program in the southern Aceh region. But it hasn’t issued any public statement on this specific program.
That leaves Musim Mas as the only palm oil trader with a dedicated landscape strategy for the entire province, RAN said. And none have announced commitments to join collective efforts in tackling the deforestation in Rawa Singkil, it added.
RAN called on the other traders to follow Musim Mas’s example, saying that halting deforestation in Rawa Singkil Wildlife Reserve requires more than isolated actions.
“[T]he reality is that piecemeal actions suspending individual actors will not by itself solve the underlying, systemic problems this report brings to light,” RAN said.
It said brands, traders, banks, local governments and communities need to work together to address the issues at a landscape level, including by investing in full traceability systems and addressing any gaps in their current no-deforestation commitments.
“It really needs coordinated effort to address the crisis given the increasing rate of deforestation,” Tillack said. “We really need to see that joint coordinated effort to put an end to illegal deforestation.”
Banner image: Sumatran orangutan in the Leuser Ecosystem, Aceh, Indonesia. Image by Rhett A. Butler/Mongabay.
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