A new trend of "South-South colonialism" has emerged, where Southern companies are making heavy investments in the forestry sector of more backward Thirld World countries. In Denis Gray's article, "How Asia's logging companies are stripping the world's forests" (Sydney Morning Herald, August 31, 1996), several examples of this new trend was mentioned.
One Indonesian company mentioned is MUSA, which has a 60,700- hectare concession in Suriname. As far as Indonesian companies concerned, this is an understatement, since many other Indonesian companies have began logging, plantation, and paper and pulp operations in other "Southern" countries.
It is also an understatement by not exposing the high-power backing which MUSA enjoys in Suriname and in Indonesia, because it is owned by a foundation linked to President Suharto's relatives in his home village in Yogyakarta, with branch offices in Suriname, Hong Kong, and Singapore.
The following article briefly outlines the numerous overseas forestry-related industries owned by Suharto's extended family and their cronies, and the major patterns that emerge from the metamorphoses of those Suharto-linked forestry interests.
ASEAN as the Suharto siblings forestry's 'playground'
Some of the Suharto siblings have treated the members and prospective members of the Association of South East Asian Nations (ASEAN), as their "forestry playground." The first Indonesian investor in Burma's forestry sector is PT Rante Mario, one of the numerous companies under the Humpuss Group, controlled by President Suharto's youngest son, Hutomo Mandala Putra, also known as Tommy Suharto.
Through a joint venture with a Burmese state company, Myanmar Timber Enterprise (MTI), PT Rante Mario is planning to build a wood processing industry with an investment of US$ 75 million (Bt 1.8 billion). In the first five years (since 1994), this joint venture will only produce logs and lumber. After that, it will go into plywood production.
"Rante Mario will become a test case in involving foreign investors in Myanmar in forest management," said Herry Sunardi, general director of PT Rante Mario in an interview with an Indonesian business magazine, Swasembada, in December 1994. "If this projects succeeds, then other investors will be attracted, and that is when Myanmar will be a challenge to Indonesia's timber export market," adds the Humpuss Group executive.
Sunardi bases his argument on his data of Burma's excellent forestry potentials. According to him, from Burma's total forest of 66 million hectares, 32.4 million consists of high-density forest. The Humpuss executive's data, however, contradicts some other sources. According to WWF data, Burma's natural environment is already worse off than Indonesia. Burma has already lost 71per cent of its natural habitat, compared with 49 per cent in the case of Indonesia.
Area wise, Indonesia still has nearly 750,000 Km2 of natural habitat, while Burma only has nearly 226,000 Km2. So, one can say that to conserve Indonesia's own natural forest, President Suharto is allowing his beloved youngest son to destroy a friendly nation's forest.
In the spirit of capitalist competition and the notorious spirit of Suharto sibling rivalry, Tommy's sister Siti Hediyati Haryadi, also known as Titiek Prabowo, has opened her own timber concession in Cambodia. Her joint venture partner there is a Sino-Indonesian businessman, Jopie Widjaja, who shares several other joint ventures with the Suharto children back home in Indonesia.
Hence, it is no wonder that Suharto so vehemently opposes any "Western interference" in ASEAN (Association of South East Asian Nations)'s "domestic affairs", especially after Burma, Cambodia, and Laos have been accepted into the ASEAN fold, rounding up the "ASEAN 7" – Indonesia, Malaysia, Thailand, Singapore, and the Philippines – into "ASEAN 10".
Other global forestry interests, linked to Suharto's children and their in-laws
While Tommy and Titiek operate directly in the global forestry sector, two of their siblings, Bambang Trihatmojo and Siti Hardiyanti Rukmana, or Tutut, operate more indirectly in this field. Bambang, who controls his own business empire, the Bimantara Group, is a major shareholder in another conglomerate, the Barito Pacific Group. This group is led by a Sino-Indonesian businessman, Prajogo Pangestu. In the group's bank, Andromeda Bank, Bambang owns 25 per cent shares, Prajogo 50 per cent, and another Sino-Indonesian businessman, Henry Pribadi, also per cent.
Meanwhile, Tutut, who controls another business empire, the Citra Lamtorogung Persada Group, has stakes in a partnership of the Barito Pacific Group with Marubeni and Nippon Paper in South Sumatra, PT Tanjung Enim Lestari Pulp & Paper (TEL). The US$ 1 billion venture plans to open half a million hectare of forest, which will be planted with eucalyptus for pulp production, thereby evicting hundreds of indigenous people from their ancestral land.
Under Prajogo Pangestu's leadership, Barito Pacific has ventured into various forestry operations in Malaysia and Papua New Guinea. Two years ago, Barito Pacific swapped shares with a Malaysian company, CASH (Construction and Supplies Houses Berhad) for M$ 1.3 billion (Bt 13 billion). Funds generated from this share-swapping deal was going to be used, to party finance the South Sumatra paper and pulp operation.
Fortunately, the CASH-Barito Pacific deal was not approved by Malaysia's Securities Commission. So, for the time being, the South Sumatran people have not been evicted totally from the concession area of PT TEL.
Apart from CASH, however, Prajogo Pangestu already owns three other overseas forestry operations, namely Rindaya Wood Processing in Malaysia, Lombda Pty Ltd in Papua New Guinea, and Nantong Plywood Industry in Shanghai, China.
Prajogo Pangestu's Barito Pacific Group is not the only Indonesian conglomerate through which the Suharto family has expanded its forestry-related businesses in the ASEAN region. The kids also own shares and have joint ventures with other top Indonesian conglomerates, such as the Sinar Mas Group and the Raja Garuda Mas (RGM) Group, which are heavily involved in the ASEAN region.
In 1991, a joint venture between Sinar Mas and VegOil Philippines in food processing was approved by the Philippines Board of Investments. It involved an investment of 4.2 million pesos.
In the same year, a Sinar Mas Group member company, PT Global Agronusa Indonesia (GAI) opened a 5,000-hectares banana plantation on the island of Halmahera in North Maluku (Moluccas). This largest Indonesian banana plantation was a joint venture with the Philippine-American fruit giant, Del Monte. However, for various reasons, the joint venture was terminated in 1994, and GAI began to export its bananas by itself to China, via Hong Kong.
RGM has also established a joint venture with a Malaysian-Philippine plantation company. Through its wholy-owned subsidiary in Singapore, Asia Plantation Holdings Pty. Ltd, RGM had acquired 40% shares of NDC-Guthrie Plantation in 1992. This company itself is a joint venture of the National Development Corporation of the Philippines and Kumpulan Guthrie Sendirian Berhad of Malaysia. Apart from that, RGM also acquired 40% shares of NDC-Guthrie Estate. These two companies were involved in palm oil plantations and oil palm milling in Malaysia.
Hence, it was not a big step further for RGM to announce its involvement in the disastrous Bakun dam project in Sarawak, which will displace more than 10,000 indigenous people. In March 1996, it began constructing a US$ 1.3 billion joint-venture with Ekran Berhad in Bintulu. RGM owns 55% of the venture, which in its first phase will produce 750,000 tons of pulp per annum. In the next phase an integrated pulp and paper mill will produce 300,000 tons of uncoated paper per year.
Recently, RGM has decided to become a partner in an Indonesia-Australian-Spanish joint venture in coal mining in South Kalimantan, under the name of PT Adaro. The other Indonesian partner in this joint venture is the Tirtamas Group, owned by Hashim Djojohadikusumo and his sister-in-law, Siti Hediyati Hariyadi, or Titiek Prabowo. Titiek, is Suharto's second daugther, and is married to the rising star in the Indonesian army, Mayor General Prabowo Subianto, the Fort Benning-trained commander of the Indonesian Army special forces, Kopassus. Which means that the PT Adaro joint venture – and Raja Garuda Mas in particular – can rely on the Red Berets' muscles – and M-16 guns – to protect their mining and forestry interests in Indonesia.
Meanwhile, RGM' joint ventures with Ekran Berhad and NDC Guthrie in Malaysia are part of the group's strategy to become a global player in pulp and paper. It has been listed on the Singapore and New York stock markets under the name of Asia Pacific Resources International Holdings Ltd. (APRIL). As it stated in one of its media advertisements, the Raja Garuda Mas Group is now one of the leading industrial groups in the Asia-Pacific region, with assets in excess of US 4.5 billion and a skilled workforce of over 56,000 people.
A similar strategy has been adopted by Sinar Mas, which has listed its paper and pulp division on the Singapore and New York stock markets under the name of Asia Paper & Pulp Co. (APP). With their paper and pulp mills in Indonesia, Singapore, Malaysia, Hong Kong, China, India and the Philippines, these two Indonesian giants have shaken Australian paper producers' hegemony in the region.
With all these business connections between the Indonesian and Malaysian elites, it is also no wonder why Mahathir is as vehemently opposed as Suharto against international criticism of their respective countries' environmental records.
MUSA, the Suharto family's major global forestry vehicle
Suharto is indeed a very family-type person, who always wants to please all his family members. Not only his immediate family, but even his relatives in his home village in the province of Yogyakarta. The notorious MUSA (Mitra Usaha Sejati Abadi), which was mentioned in the Sydney Morning Herald article, is owned by Yayasan Kemusuk Somenggalan, a family foundation of Suharto's relatives in his childhood village.
This group has developed its forestry interests by taking over – or merging with – several timber companies, belonging to other Indonesian business conglomerates, which had financial difficulties when they had to develop their own timber processing factories. Two groups in particular merged some of their timber concessions with MUSA: the Porodisa Group, owned by the Sumendap family from North Sulawesi, Indonesia, which also owns the private Bouraq Airlines; and the Meratus Kalimantan Timber Group, which was owned by the Sutrisno family. Irawan Imoek, son of Imoek Sutrisno (Lauw Kong Yen), now works for the MUSA group in Surinam.
MUSA, which first came to Suriname in 1993, has had big ambitions in this country, with a large ethnic Javanese population and corrupt ethnic-Javanese politicians. Despite protests from the indigenous Afro-Maroon people, it soon managed to obtain logging rights of 150,000-hectare in the Apura district in West Suriname, without the approval of Suriname's parliament. MUSA's investment approval was obtained after visits to Indonesia by Suriname's Minister for Social Affairs, Willy Soemita, who is of Javanese origin. A subsequent visit of Suriname's president, Mr Venetiaan, to Indonesia in 1994, had established a 20-years cooperation agreement between Indonesia and Suriname in the field of forestry. Finally, Soeharto himself made a trip to Surinam in October 1995.
All these trips between Jakarta and Paramaribo were made in the name of "South-South cooperation" between fellow members of the Non-Aligned Movement (NAM), which is currently headed by Suharto.
Despite international protests from the world rainforest movement, MUSA continuosly attempted to expand its operations in Central and South America, from Surinam to Guyana, with plans to open its timber operations in Brazil's Amazon forests as well. In many of these operations, MUSA officials knock the doors of local politicians together with the Malaysian Berjaya Group.
The Berjaya Group, by the way, has its own business links with the Suharto family, especially with Bambang Trihatmojo, through a Singapore-based healthcare company, Parkway Holdings, which has built and runs several luxury hospitals in Indonesia. Apart from that, the Berjaya Group is well-connected with Malaysia's ruling UMNO party, and even has its own joint ventures with Malaysian Prime Minister Mahathir's sons, Mokhzani and Mirzan.
Conclusion
From studying the history and the current 'global-trotting expedition' of the Suharto family-related forestry companies, five general patterns emerge. First, these companies initially accumulated their capital from timber concessions inside Indonesia, which were handed out in the first New Order decade to reward business people, military officers and civilian politicians, who had wholeheartly supported Suharto's disguised military coup d'etat in 1966.
Secondly, through Indonesia's leading role in ASEAN, these Suharto-linked companies expanded into the region through various joint ventures with companies linked to the ruling elites of the ASEAN – and soon-to-become ASEAN – countries, especially in Malaysia, Vietnam, and Burma.
Thirdly, with the rising political profile of Suharto as chairperson of the Non-Aligned Movement (NAM), these Suharto-linked companies began their foray into the Central American as well as Central African forests. In the case of Central America, Surinam was targetted as the initial stepping stone of a Suharto-linked forestry conglomerate, MUSA, by banking on Suharto's cultural affinity with Surinam's corrupt ethnic Javanese politicians. Fourthly, these globalization process of the Suharto-linked forestry interests fitted nicely into China's economic boom, pioneered by the late Chinese paramount leader, Deng Ziao Peng, and which has also been strongly supported by Sino-Indonesian business tycoons, whom in turned banked on their cultural affinity with the Chinese ruling elite.
Fifthly, in this globalization process of the Suharto-linked forestry interests, profits and capital accumulation have been the main driving motives, with a minimal consideration in conserving the world's precious rainforests and in respecting the indigenous inhabitants' cultures. This behaviour contradicts completely with the ideals of ASEAN and NAM, which were set up to uplift the welfare of the majority of the ASEAN and NAM peoples, and not simply to enrich their ruling elites.
So, after successfully fighting Dutch and Japanese colonialisms in the Indonesian archipelago, the political and economic elite which grew out of this independence struggle have become a new colonialist regime on a global scale, colonizing other "Southern" countries by irresponsibly harvesting their primary rainforests, in the name of "ASEAN solidarity" as well as "NAM solidarity."