Explosive Reports Expose Illegal Logging and Human Rights Abuses by Forestry Giant Korindo Group; Tokyo 2020 Olympics Implicated in Sourcing Tainted Wood
Protesters rally at Korindo Jakarta HQ after investigation reveals land grabbing and widespread breaches of timber laws; Japanese and Indonesian banks found financing rainforest destruction
Jakarta – In-depth investigations into the Korean-Indonesian conglomerate Korindo Group have produced two reports documenting widespread evidence of illegality, environmental destruction and community rights violations across the company’s operations. Korindo’s expansion into Indonesia’s frontier forests has involved primary forest clearance, burning, land grabbing and police harassment and arbitrary arrest of local people, says the damning report titled Perilous: Korindo, Land Grabbing and Banks, issued today by Rainforest Action Network (RAN), Walhi, Tuk-Indonesia and Profundo. These abuses have resulted in Korindo supplying unsustainable and likely illegal timber for the construction of Tokyo 2020 Olympics venues, as outlined in a second, related report also released today, titled Broken Promises.
A group of Indonesian protesters, including Walhi North Maluku, gathered at Korindo’s Jakarta headquarters today, as well at the headquarters of Korindo’s principal bank Bank Negara Indonesia (BNI), to demand Korindo stop destroying forests in North Maluku, leave community territories, and demanded that BNI stop financing the company.
In North Maluku, community landowners are fighting Korindo to retain control of their traditional lands and forests. Evidence and testimonies included in today’s report demonstrate Korindo has forcibly taken community lands without their consent, illegally used fire to clear land, planted oil palm without required permits, and criminalized communities who resist the company’s operations, including arbitrary arrest and violence.
"Korindo is abusing and exploiting North Maluku and the Indonesian people," said Ismet Soelaiman, Director of Walhi North Maluku. "From stealing community lands, harassing small scale farmers, to destroying local biodiversity with the monoculture plantation system, ordinary people are paying the price. Right now, Korindo is trying to grab more community forests in North Maluku to sell the timber and plant oil palm. The communities are resisting but they need the help of government and police to stop aiding illegal operations, and instead protect the people, their farms and forests."
Research into Korindo’s finances, corporate structure and offshore shell companies uncovered further instances of unethical and illegal practices, including misreporting loan arrangements and financial statements through its Singapore shell companies. The reports also highlight the culpability of banks and investors that finance and profit from Korindo’s illegal operations. Korindo’s financiers and business partners – principally Bank Negara Indonesia (BNI), SMBC Group, Hyosung Corporation, Sumitomo Forestry and Oji Holdings – have all played a critical role in Korindo’s expansion.
“BNI has committed to be a pioneer in sustainable finance,” said Edi Sutrisno from TuK-Indonesia. “To truly implement this commitment, it must first stop bankrolling companies like Korindo, operating without adequate permits and stealing community land and forests. Financing Korindo is in clear contradiction with BNI’s own standards, and is counter to new financial sector regulations from Indonesia’s Financial Services Authority. BNI should tighten its policies, drop companies like Korindo, and be a sustainable bank for the needs of ordinary Indonesians instead of tycoons.”
Evidence contained in the report also confirms Korindo has been sourcing illegal and unsustainable timber for its mills, and supplying plywood from those mills for the construction of Tokyo 2020 Olympics venues. Photographic evidence, company supply chain data and trade export records show that Korindo plywood used for Olympics venue construction has likely included illegal timber from North Maluku as well as timber cleared from orangutan habitat in East Kalimantan, supplied via the Japanese trading company Sumitomo Forestry.
“The Tokyo 2020 Olympic organizers promised to deliver a sustainable Olympics,” said Hana Heineken from RAN. “Instead, it has used over 110,000 sheets of tropical plywood from Indonesia that is linked to rainforest destruction, land-grabbing and clearance of endangered orangutan habitat, much of it to make way for oil palm plantations. The Olympics is supposed to celebrate human achievement and global solidarity, not be built on top of human rights violations and environmental destruction from remote corners of the world.”
The findings contained in these reports demand urgent and robust action, including investigations by the relevant Indonesian and Japanese authorities. The Tokyo 2020 Olympics and the Indonesian and Japanese banks and customers connected to these scandalous actions should immediately cut ties with Korindo.
The findings of this report were put to Korindo for their comment and response, between June and November 2018. Korindo insists that it operates in full accordance with all laws and regulations and that it is a leader in sustainability. Additional responses by Korindo and other named companies are contained in the reports.
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