First Resources' shadow hangs over the Dayak Agabag

In the Palm Oil sector, it is increasingly common for corporate groups owned by an individual or family to conceal control of problematic assets. Concealed ownership helps shield corporations from accountability for operations they control. See short film here

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This Briefing documents the situation of the Dayak Agabag of Indonesian Borneo in the Province of North Kalimantan, whose lands have been taken over by two palm oil companies, PT Karangjuang Hijau Lestari (PT KHL) and PT Bulungan Hijau Perkasa (PT BHP). Both PT KHL and PT BHP are alleged shadow companies of First Resources, a member of the Roundtable for Sustainable Palm Oil (RSPO).

Read the full briefing here 

Key points

Shadow Companies: Evidence suggests that PT Karangjuang Hijau Lestari (PT KHL) and PT Bulungan Hijau Lestari (PT BHP) two subsidiaries of the palm oil group FAP Agri, are shadow companies of RSPO-member First Resources, a group controlled by the Fangiono family.

Common Control: Evidence suggests that FAP Agri and its subsidiaries are under the common control of First Resources, and therefore should be declared as related entities in a corporate group with First Resources for the purposes of RSPO membership.

Land conflicts: PT KHL and PT BHP have been embroiled in a long-standing land conflict with the Dayak Agabag since 2004 when they began to clear the Dayak Agabag’s ancestral lands to develop palm oil plantations.

Criminalization: PT KHL and PT BHP have brought nine separate criminalization cases against members of the Dayak Agabag community with weak evidence since 2010 in an apparent effort to deter community resistance to plantation expansion.

Reputational Risk to RSPO: RSPO certification scheme is undermined by the destructive operations of PT KHL and PT BHP, which continue to persist without consequences because the fact that the same beneficial owners of First Resources which ultimately control and benefit from those operations, are hidden through opaque corporate structures.

Group-level responsibility: RSPO should suspend First Resources certification until the harms caused by PT KHL and PT BHP are remedied and addressed, as the companies are all under common control.

Demanding accountability: Buyers are urged to stop sourcing from FAP Agri and First Resources and the other companies under their common control until the ongoing land conflict between PT KHL and PT BHP and the Dayak Agabag is resolved and rights violations have been remedied.