Sinar Mas Group

Sinar Mas Group (typically spelled Sinarmas in Indonesian) 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, 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.

Criticism and controversies

Environmental concerns

A palm-oil producing subsidiary of Sinarmas Group Smart Tbk has been accused by Greenpeace of causing deforestation of Indonesian rainforests.^[1] To investigate this accusation, Smart Tbk has appointed Control Union Certification and BSI Group,^[2] assisted by two researchers from the Bogor Agricultural Institute.^[3]

Haze in Singapore and Malaysia

According to Indonesian government officials, Sinar Mas is one of the eight companies responsible for sending hazardous level of smog to Singapore and Malaysia. ^[4]

Unilever

In December 2009, Unilever suspended purchases of palm oil from PT Smart, a Sinar Mas subsidiary, citing concerns that PT Smart had not provided sufficient evidence that they are not involved in unacceptable environmental practices.^[5] However, Unilever plan to resume Palm Oil purchases if independent auditors, formed by Sinar Mas and Unilever, disprove allegations of forest destruction.^[6]

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.^[7] 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.^[8] 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. ^[9]

HSBC

In May 2010, focus of the Greenpeace campaign moved to HSBC,^[10] calling for them to sell their stocks in Sinar Mas. By July 2010, HSBC had written to Greenpeace to inform them that the shares had been sold.^[11]

Carrefour

July 7: Carrefour has dropped Sinar Mas as its supplier.^[12] “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.^[13]

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"^[14]

Mattel

In 7 June 2011, Greenpeace launched "Barbie, It's Over", a global campaign to bring awareness and encourage Mattel to switch pulp and paper producers.^[15][16] 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.^[17]

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 .^[18]

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".^[19]

References

External links

• Sinar Mas Group (official site)
• Sinar Mas Financial Services (official site)
• APP (Chinese official site)
• Sinar Mas Group companies grouped at OpenCorporates