Sinar Mas Group

In its early days, Sinar Mas was first started as a small grocery shop in 1938 in Makassar, Dutch East Indies by Eka Tjipta Widjaja. After the end of the Indonesian national revolution, Eka started to expand his business into copra, palm oil, and paper production. After the failure of his copra business, Eka later established CV Sinar Mas in Surabaya and established a cooking oil factory along with a paper mill in the city.

In 2010, Smartfren was founded as a result of a merger with a telecommunications provider, Fren.

Since 2003, Sinar Mas no longer calls itself the Sinar Mas Group because after restructuring Sinar Mas no longer has a holding company, but rather a President's office that facilitates/assist in implementing its business pillars.

Criticism and controversies

Asia Pulp & Paper

In 2001, Asia Pulp & Paper (APP), the subsidiary of Sinar Mas, called a standstill on $14 billion worth of bonds and loans and stopped repaying its debt, including interest payments, in what is still the largest default to foreign investors in Asian market history. On August 15, 2018, the Anti Forest Mafia Coalition, published a report revealing that two APP suppliers in East Kalimantan had cleared nearly 32,000 hectares of natural forest, in violation of APP’s no-deforestation commitment in February 2013. Prior to this, APP and its pulpwood suppliers had a history of almost 30 years of deforestation and related destruction in the region. APP has hence remained one of only three companies in the world that the Forest Stewardship Council has disassociated from since October 2007. On September 7, 2018, the World Wide Fund for Nature (WWF) openly recommended that companies and financial investors end their business relationships with APP and its affiliates.

Berau Coal

In 2015, Berau Capital Resources Pte Ltd (Singapore) issued US$450 million worth of 12.5% guaranteed senior secured notes. In 2017, PT Berau Coal Energy (Indonesia) also issued US$500 million worth of 7.25% guaranteed senior notes. Both the 2015 and 2017 notes went into default. As of July 2015, the Berau Group brought 4 separate rounds of scheme of arrangement / moratorium proceedings, with terms which have been described as “frankly insulting” at a time when global coal prices had doubled. None of the schemes has succeeded.

Environmental concerns

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

Haze in Singapore and Malaysia

Sinar Mas is one of the eight companies responsible for sending hazardous level of smog to Singapore and Malaysia. Yet, company said forest fires within concession areas did not mean that it was the company that had started the fire. Sinar Mas had not been involved in any deforestation since 2013 and have zero burning policy since 1997.

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. However, Unilever plan to resume Palm Oil purchases if independent auditors, formed by Sinar Mas and Unilever, disprove allegations of forest destruction.

Nestlé

In March 2010, Nestlé 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. To avert the public reputation disaster, Nestlé quickly moved to stop its palm oil procurement from Sinar Mas. After Sinar Mas appointed independent auditors to investigate the issue, Nestlé joined the committee and may resume palm oil procurement from Sinar Mas if they are cleared of the allegations. In August 2010 the Nestlé 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."