Sinar Mas Group

Sinar Mas Group
Private
Founder Eka Tjipta Widjaja
Singgih Wahab Kwik (Kowik)
Headquarters Jakarta, Indonesia
Website www.sinarmas.com/en/

Sinar Mas Group, (simplified Chinese: 金光集团; traditional Chinese: 金光集團; pinyin: Jīnguāng Jítuán) is one of the largest conglomerates in Indonesia. It was formed in 1962. It has numerous subsidiaries including Asia Pulp & Paper and palm oil producer PT SMART.

Sinar Mas Group was founded by a Chinese Indonesian tycoon, Eka Tjipta Widjaja (黄亦聪), with the help of Singgih Wahab Kwik (Kowik) or Christophorus Kowik Singhap. The company set up a subsidiary in India in the 1990s, but sold it to Ballarpur Industries Limited in 2001.

Sinarmas businesses operate in different sectors such as pulp & paper, real estate, financial services, agribusiness, telecommunications, and mining. The businesses are listed in the Indonesian and Singapore stock exchanges.

Business units

Criticism and controversies

Environmental concerns

Smart Tbk, the palm-oil producing subsidiary of Sinarmas Group, has been accused by Greenpeace of causing deforestation of Indonesian rainforests.[3] To investigate this accusation, Smart Tbk has appointed Control Union Certification and BSI Group,[4] assisted by two researchers from the Bogor Agricultural Institute.[5]

Haze in Singapore and Malaysia

Main article: Southeast Asian haze

Sinar Mas is one of the eight companies responsible for sending hazardous level of smog to Singapore and Malaysia. [6]

Unilever

In December 2009, Unilever suspended purchases of palm oil from Smart Tbk citing concerns that Smart Tbk had not provided sufficient evidence that they are not involved in unacceptable environmental practices.[7] However, Unilever plan to resume Palm Oil purchases if independent auditors, formed by Sinar Mas and Unilever, disprove allegations of forest destruction.[8]

Nestle

In March 2010, Nestle faced a public reputation crisis over its procurement of palm oil from Sinar Mas whose plantations are reported to be the cause of widespread rainforest and orangutan habitat destruction.[9] To avert the public reputation disaster, Nestle quickly moved to stop its palm oil procurement from Sinar Mas. After Sinar Mas appointed independent auditors to investigate the issue, Nestle joined the committee and may resume palm oil procurement from Sinar Mas if they are cleared of the allegations.[10] In August 2010 the Nestle chairman Peter Brabeck-Letmathe stated that the focus on his company is misguided. "You know very well that it's not Nestle's 350,000 tons of palm oil that brought about deforestation in Indonesia," he said, "but a political decision to use food as a source for biofuels." The United Kingdom and Germany alone have consumed 500,000 tons of palm oil for biofuels between them, he said.

Abengoa

In May 2010, Abengoa Bioenergy asked its raw material suppliers to boycott palm oil from any company in the Indonesian group of Sinar Mas, until it can demonstrate that it fully complies with Abengoa’s environmental and social sustainability policy. [11]

HSBC

In May 2010, focus of the Greenpeace campaign moved to HSBC,[12] calling for them to sell their stocks in Sinar Mas. HSBC had admitted it held shares in Golden Agri-Resources Ltd, the palm oil arm of the Sinar Mas Group, via asset management funds including its Climate Change Fund.[13] Although according to the bank's ethical forestry policy, the bank would not finance plantations converted from natural forest since June 2004, the rule then did not apply to its asset management funds. [14]

By July 2010, HSBC had written to Greenpeace to inform them that the shares had been sold.[13]

Carrefour

In July 2010, Carrefour has dropped Sinar Mas as its supplier.[15] “Carrefour is committed to sustainable development and has decided to cease sourcing of APP supplies for private label products from mid-year this year until further notice.” Carrefour Indonesia external communication manager Hendri Satrio told The Jakarta Post in a letter.[16]

Burger King

In September 2010, Burger King announced that they would no longer source Palm Oil from Sinar Mas. They published a statement announcing: "After completing a thorough review of the independent verification report conducted by Control Union Certification (CUC) and BSI Group, we believe the report has raised valid concerns about some of the sustainability practices of Sinar Mas' palm oil production and its impact on the rainforest. These practices are inconsistent with our corporate responsibility commitments"[17]

Mattel

On 7 June 2011, Greenpeace launched "Barbie, It's Over", a global campaign to bring awareness and encourage Mattel to switch pulp and paper producers.[18][19] Mattel uses paper sourced from Asia Pulp & Paper, one of the subsidiaries of Sinar Mas Group in its product packaging, particularly in packaging in the Barbie line of toys.[20]

Exhibition & Convention Center

Together with Kompas Gramedia Group, Sinar Mas Land will build a 100,000 square meter exhibition & convention center of Indonesia Convention Center (ICE) on 22 hectares of land in Bumi Serpong Damai. The ICE, started in 2012 and should be completed by the end of 2014, will be equipped with 10 exhibition halls, a convention center, and a 300-room hotel on site. The center will be able to accommodate at least 200,000 visitors a day and 10,000 people concert hall .[21]

Philanthropy

Recently the company has created Eka Tjipta Foundation, a philanthropic foundation that focuses on Education, Poverty and Renewable Energy. Jaya Suprana from the Indonesian Museum of Records (MURI) presented a certificate to the Eka Tjipta Foundation, a non-profit organization under one of the country’s largest conglomerates, Sinar Mas Group, for granting “the largest number of scholarships for undergraduate students during certain period".[22]

References

  1. ↑ http://markets.ft.com/research/Markets/Tearsheets/Business-profile?s=SMAR:JKT
  2. ↑ http://www.smart-tbk.com
  3. ↑ "Caught Red-Handed: How Nestlé's Use of Palm Oil is Having a Devastating Impact on Rainforest, The Climate and Orang-utans | Greenpeace International". Greenpeace.org. 2010-03-17. Retrieved 2014-02-26.
  4. ↑ "SMART Appoints Control Union Certification and BSI Group to Verify Greenpeace Reports" (PDF). Smart-tbk.com. 1 April 2010. Retrieved 2014-02-26.
  5. ↑ "SMART Refutes Allegations Made on Greenpeace Website" (PDF). Smart-tbk.com. 5 July 2010. Retrieved 2014-02-26.
  6. ↑ "Indonesia blames eight firms for fires affecting region". Straits Times. 21 June 2013.
  7. ↑ "Unilever takes stance against deforestation | Media centre | Unilever Global". Unilever.com. Retrieved 2014-02-26.
  8. ↑ "Unilever to resume buying CPO if Sinar Mas cleared". Reuters. 7 April 2010.
  9. ↑ Tabacek, Kai (18 March 2010). "MIC: Guardian Sustainable Business,Palm oil (environment)". The Guardian. London.
  10. ↑ "Nestlé committed to traceable sustainable palm oil to ensure no-deforestation | Nestlé Global". Nestle.com. 2010-04-13. Retrieved 2014-02-26.
  11. ↑ "Abengoa :: Press Room :: News :: News Archive :: 2010 :: May". Abengoa.es. 2010-05-10. Retrieved 2014-02-26.
  12. ↑ "HSBC forest policy has loopholes you could drive a bulldozer through | Greenpeace UK". Greenpeace.org.uk. 2013-12-28. Retrieved 2014-02-26.
  13. 1 2 Maung, Zara (8 July 2010). "MIC: Guardian Sustainable Business,Palm oil (environment)". The Guardian. London.
  14. ↑ Maung, Zara (21 May 2010). "Greenpeace links HSBC climate change fund to deforestation". The Guardian. Retrieved 20 April 2016.
  15. ↑ "Carrefour drops products from Indonesia's APP". Reuters. 7 July 2010.
  16. ↑ "Sinar Mas reels from PR woes as Carrefour ends deals". The Jakarta Post. 2010-07-07. Retrieved 2014-02-26.
  17. ↑ "Burger King drops palm oil supplier linked to Borneo rainforest destruction". Mongabay.com. Retrieved 2014-02-26.
  18. ↑ Archived June 10, 2011, at the Wayback Machine.
  19. ↑ Sarah Anne Hughes (2011-06-08). "Greenpeace protests Barbie at Mattel headquarters". The Washington Post.
  20. ↑ "How Sinar Mas is Pulping the Planet" (PDF). Greenpeace.org. Retrieved 2014-02-26.
  21. ↑ Archived October 26, 2011, at the Wayback Machine.
  22. ↑ "Eka Tjipta Foundation receives MURI Award". The Jakarta Post. 2010-07-30.
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