According to a report by risk analysis group Chain Reaction Research (CRR), major agribusiness firms are using opaque corporate structures to gain access to palm oil sourced from plantations operating in violation of their sustainability commitments. The report alleges that large conglomerates in Southeast Asia’s plantation sector often deliberately hide the true ownership of controversial assets without relinquishing control. As a result, deforestation takes place at plantations that belong to the same ultimate owners as firms that subscribe to No Deforestation, No Peat, No Exploitation (NDPE) sourcing policies. The CRR report names Sawit Sumbermas Sarana, Gama, Bintang Harapan Desa, and the Fangiono, Tee, and Salim family business groups as some of the culprits. The use of opaque ownership structures in the palm oil sector threatens to “delegitimize the NDPE efforts,” according to CRR, while minority investors and financiers of the companies may also face reputational and market risks if linked to the practice.

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