The Green Inferno: The Destructive Viscose Empire Behind Indonesia's Deforestation

An exhaustive Greenpeace investigation reveals Royal Golden Eagle's extensive network of shadow companies linked to massive deforestation in Indonesia. The report exposes the destruction of critical peatlands and endangered species habitats, highlighting significant gaps in corporate sustainability claims and intensifying calls for transparency and stricter due diligence across global supply chains.

Long Story, Cut Short
  • Greenpeace's latest report uncovers 257 companies allegedly linked to Royal Golden Eagle responsible for extensive deforestation across Indonesia.
  • Between 2021 and May 2024, approximately 68,000 hectares of forest were cleared, threatening critical peatlands and orangutan habitats.
  • The Forest Stewardship Council is reviewing its relationship with RGE, while brands and financiers face mounting pressure to strengthen environmental oversight.
A lone rainforest tree stump stands in a forestry concession held by PT Industrial Forest Plantation — logged to make way for a pulpwood monoculture plantation.
The Stump Remains A lone rainforest tree stump stands in a forestry concession held by PT Industrial Forest Plantation — logged to make way for a pulpwood monoculture plantation. The 'Under The Eagle’s Shadow' report sets out strong evidence that a number of companies including this one are ‘shadow’ companies under common control with the RGE/Tanoto group. Greenpeace

Royal Golden Eagle (RGE) is a global resource-based industrial group that includes the viscose fibre producers Sateri and Asia Pacific Rayon (APR). RGE operates in various industries, including pulp, paper, palm oil, and viscose.

APR, a subsidiary of RGE, is the first fully integrated viscose/rayon producer in Asia. It produces viscose staple fibre from wood pulp, used in textiles and other products. Sateri, another RGE company, is also a major viscose producer.

Greenpeace has been investigating the environmental transgressions of one of the world's largest pulp and paper companies—Indonesia's Royal Golden Eagle Group (RGE)—for years now. The non-profit’s latest explosive investigative report, Under the Eagle's Shadow, has just unveiled what researchers describe as one of the most sophisticated corporate structures designed to obscure environmental destruction in Indonesia.

The multi-year investigation reveals that RGE, controlled by Indonesian tycoon Sukanto Tanoto, operates through a labyrinthine network of 257 shadow companies spanning multiple jurisdictions. RGE is the owner of viscose fibre producers Sateri and Asia Pacific Rayon (APR).

This corporate maze includes 194 Indonesian entities and 63 overseas holding companies registered in tax havens such as Singapore, Hong Kong, and the British Virgin Islands. The intricate structure appears to have been deliberately designed to shield RGE from legal accountability and reputational damage associated with ongoing deforestation activities.

Between January 2021 and May 2024, Greenpeace documented approximately 68,000 hectares of forest clearance across concessions believed to be under common control with the RGE group. This destruction has occurred despite RGE's high-profile "No-Deforestation" commitments and sustainability pledges that have earned the company various certifications and international recognition.

The environmental toll extends far beyond mere tree loss. Much of the cleared land encompasses sensitive peatland ecosystems that serve as massive carbon storage reservoirs. When destroyed, these peatlands release enormous quantities of greenhouse gases, undermining both Indonesia's climate commitments and global efforts to combat climate change. The habitat destruction has particularly impacted critically endangered species, including the Sumatran orangutan, whose forest homes continue to shrink under plantation expansion.

Corporate Denials Meet Mounting Evidence

RGE's response to the Greenpeace investigation has been restrained. The conglomerate issued a brief two-page statement denying control over the companies identified in the report, while avoiding detailed engagement with the specific allegations. This measured response contrasts sharply with the comprehensive evidence presented by Greenpeace, which includes satellite imagery, corporate registry analysis, and on-ground documentation of deforestation activities.

The Forest Stewardship Council (FSC), which has certified some RGE operations, too is under pressure to reassess its relationship with the company. Environmental groups allege that FSC certification has been used to greenwash operations that continue to destroy forests through shadow companies. Any potential decertification could significantly impact RGE's market access and reputation, as FSC certification carries substantial commercial value in global markets.

International brands sourcing from RGE-linked suppliers will now have to take into account serious reputational risks. But, the way things stand, the complex corporate structure makes it difficult for downstream purchasers to verify that their supply chains are truly deforestation-free. This challenge highlights the limitations of current due diligence practices and the need for more sophisticated tracking mechanisms across global commodity chains.

Financial institutions are similarly scrutinised for their exposure to RGE-related entities. Banks and investors increasingly face demands to implement stricter environmental, social, and governance (ESG) criteria that would identify and exclude companies engaged in deforestation. The potential for stranded assets and reputational damage has made sustainable finance frameworks more critical than ever.

Implications for Global Supply Chain Accountability

The Greenpeace findings clearly show fundamental weaknesses in how global supply chains monitor and prevent deforestation. RGE's products—including palm oil, pulp, and paper—flow into countless consumer goods worldwide, from food and cosmetics to packaging and textiles. This extensive market penetration means that millions of consumers may unknowingly support deforestation through their purchasing decisions.

For multinational corporations, the investigation underscores the inadequacy of surface-level supplier relationships. Effective supply chain management requires deep understanding of ownership structures, operational practices, and environmental impacts throughout the entire production network. The sophisticated nature of RGE's shadow company system demonstrates that determined actors can exploit gaps in corporate due diligence.

Certification schemes face particular scrutiny following these revelations. While those like the FSC provide important standards for responsible forestry, their effectiveness depends on rigorous enforcement and the ability to see through complex corporate structures. The RGE case suggests that certification systems must evolve to address increasingly sophisticated attempts to circumvent environmental commitments.

Government regulators in Indonesia and internationally will now have to take head on the challenge of enforcing environmental laws against entities designed to evade accountability. Cross-border information sharing, beneficial ownership registries, and enhanced penalties for environmental crimes become essential tools in addressing corporate structures that span multiple jurisdictions.

The broader implications extend to ongoing debates about corporate responsibility and the effectiveness of voluntary sustainability commitments. The disconnect between RGE's public pledges and the documented forest destruction suggests that self-regulation alone cannot address systemic environmental challenges.

Sabar Bubu Hill — A ancestral forest protected for generations by the Indigenous community of Meraban Hamlet, Kualan Hilir Village, now impacted by PT Mayawana Persada's operations.
Sabar Bubu Hill — A ancestral forest protected for generations by the Indigenous community of Meraban Hamlet, Kualan Hilir Village, now impacted by PT Mayawana Persada's operations. This area is a critical ecosystem and includes orangutan habitat. Greenpeace
Newly cleared land within PT Usaha Sawit Unggul’s palm oil concession in the mountains of North Sumatra. Adjacent to the clearing is the Laut Tinggal Lake, which appears brown due to sediment runoff.
Cleared Clean Newly cleared land within PT Usaha Sawit Unggul’s palm oil concession in the mountains of North Sumatra. Adjacent to the clearing is the Laut Tinggal Lake, which appears brown due to sediment runoff. Greenpeace

The Path Forward: Transparency and Accountability

The Under the Eagle's Shadow investigation represents more than an exposé of a single company's practices—it brings to light systemic challenges facing efforts to protect the world's remaining forests. The sophisticated corporate structures deployed by RGE reflect broader patterns across extractive industries, where complex ownership arrangements shield operations from scrutiny.

Addressing these challenges requires coordinated action across multiple fronts. Enhanced regulatory frameworks must close loopholes that enable shadow company operations while improving cross-border cooperation on environmental enforcement. Certification systems need stronger independence, more frequent monitoring, and clearer consequences for violations.

Financial markets increasingly recognise deforestation as both an environmental and business risk. Investors and lenders must develop more sophisticated tools for identifying exposure to problematic operations, even when hidden behind complex corporate structures. The integration of satellite monitoring, artificial intelligence, and blockchain technology offers promising avenues for improving supply chain transparency.

Consumer awareness and demand for sustainable products continue to grow, creating market incentives for genuine environmental responsibility. However, the RGE case demonstrates that consumers need better tools and information to make truly informed choices about the environmental impact of their purchases.

Ultimately, protecting Indonesia's remaining forests requires moving beyond voluntary commitments to enforceable standards backed by meaningful consequences. The Greenpeace investigation provides a roadmap for the kinds of investigative work needed to hold powerful corporations accountable, while highlighting the urgent need for systemic reforms across the global economy.

The stakes could not be higher. Indonesia's forests are among the world's most biodiverse and carbon-rich ecosystems. Their continued destruction not only threatens countless species with extinction but also undermines global efforts to address climate change. The time for half-measures and hidden operations has passed—transparency and accountability must become the foundation of sustainable business practices in the 21st century.

This investigation builds on years of reporting by environmental groups including Rainforest Action Network, Mongabay, and the International Consortium of Investigative Journalists, all documenting RGE's continued links to deforestation despite sustainability pledges.

Impact by the Numbers
  • 68,000 hectares of forest cleared between 2021-2024 across RGE-linked concessions.
  • 257 shadow companies identified across multiple jurisdictions to obscure ownership.
  • Peatland destruction releasing massive carbon emissions equivalent to millions of tons of CO2.
  • Orangutan habitat loss accelerating extinction risk for critically endangered populations.
  • Water cycle disruption increasing flood and drought risks across affected regions.
Stakeholder Action
  • Brands and retailers must implement enhanced due diligence including beneficial ownership analysis of suppliers.
  • Financial institutions should divest from RGE-linked entities and strengthen ESG screening processes.
  • Certification bodies need more frequent audits and swift responses to violations of environmental standards.
  • Government regulators must close legal loopholes that enable shadow company operations across borders.
  • Consumers should demand greater supply chain transparency and support truly sustainable alternatives.
 
 
  • Dated posted: 4 June 2025
  • Last modified: 4 June 2025