SAN FRANCISCO / JAKARTA — A new investigation released today reveals that Japanese megabank Mitsubishi UFJ Financial Group has continued financing Royal Golden Eagle (RGE)—the pulp and paper conglomerate controlled by billionaire Sukanto Tanoto—despite clear, ongoing evidence that RGE-linked suppliers are driving extensive rainforest destruction in Indonesia. Rainforest Action Network (RAN) says the scandal underscores how global banks and corporate giants with commitments to end deforestation continue to drive ecological collapse. Deforestation has been cited as a major contributor to the deadly floods that swept across parts of Indonesia in recent weeks, and prompted the Indonesian government to order a halt to the operations of an RGE pulp company – Toba Pulp Lestari – in North Sumatra.
Satellite imagery, government datasets, and supply-chain records show that a woodchip mill supplying RGE’s largest pulp facility in China has been sourcing timber from plantations that cleared more than 5,500 hectares of natural forest between 2020 and 2024 in East Kalimantan. This research leveraged the latest update from supply chain transparency platform Trase on Indonesian pulpwood sector. These findings contradict RGE’s highly publicized 2016 commitment to eliminate deforestation from its supply chain and raise serious concerns about the credibility of MUFG’s own commitment to “no -deforestation”. RGE has responded that its preliminary analysis has concluded that “landcover change” did occur in its supplier concessions, and that this is likely in violation of its policies.
Deforestation Scandal Emerges as Floods Devastate Indonesian Communities
The revelations come as Indonesia confronts the aftermath of severe floods that devastated entire communities across Kalimantan and Sumatra—disasters government agencies and scientists have directly linked to upstream forest loss. Intact rainforests that once buffered rainfall and stabilized landscapes have been replaced with industrial plantations, worsening erosion and magnifying the speed and scale of flash flooding. Following the floods, the Indonesian government has ordered another RGE pulp company Toba Pulp Lestari to halt operations while it conducts an audit.
“The clearance documented is not marginal, it represents a significant chunk of RGE’s global wood fiber supply. It’s also not an isolated occurrence. The very same companies were meant to be under enhanced supervision following forest clearance a few years earlier. This case clearly shows that RGE’s claim to have ‘zero tolerance’ for deforestation is bogus. RGE’s escalating demand for wood fiber continues to present one of the single largest threats to Borneo’s remaining rainforests,” said Robin Averbeck, Forest Program Director at Rainforest Action Network.
FSC Rules Confirm RGE’s Link to Shadow Operations Still Clearing Forest
The investigation identifies PT Balikpapan Chip Lestari (PT.BCL) as the woodchip mill exclusively supplying Asia Symbol, RGE’s mega-sized pulp mill in China. Updated Forest Stewardship Council (FSC) guidelines now deem PT.BCL to be under RGE’s financial control, meaning the ongoing forest destruction linked to PT.BCL is a direct breach of FSC policies—and of RGE’s own No Deforestation pledge.
RGE denies ownership of PT.BCL, but overlapping corporate structures, shared industrial facilities, and exclusive supply flows reveal a pattern of “shadow companies” that function as extensions of RGE’s pulp and paper empire. This system allows the Tanoto family’s conglomerate to profit from forest clearance while distancing its flagship brands from the destruction.
RGE responded that Asia Symbol and other downstream pulp companies within the RGE group will cease all supply from PT BCL. However, PT BCL itself remains part of RGE’s corporate group.
“RGE is pushing to regain its label as a FSC-certified company to secure access to markets and finance. To do this, it’s assessing the scale of its past environmental destruction. Yet at the same time, its demand for wood fiber keeps driving the destruction of new areas of Borneon rainforest,” said Averbeck.
In related news, today RAN has also announced the resignation of its founding membership in FSC, citing long term frustratiosn regarding the loss of credibility of the certification body.
MUFG Continues to Back RGE Despite Clear Evidence
Despite the mounting documentation of RGE’s deforestation, MUFG provided at least US $222 million in financing to RGE’s pulp division APRIL from 2020 to July 2025, including a $95 million contribution to a syndicated loan in 2024. MUFG advertises itself as a sustainability leader but has failed to demonstrate how it comprehensively applies its “No Deforestation, No Peatland, No Exploitation” commitments or how it conducts due diligence on clients with opaque corporate structures and shadow entities.
RAN presented MUFG with the new evidence in advance of publication. Citing client confidentiality, MUFG declined to comment on the findings of this investigation.
Call for Immediate Action
Rainforest Action Network is calling for:
- An extension of the suspension of RGE’s reassociation with the Forest Stewardship Council (FSC) until all deforestation across its full corporate group is halted and remediated.
- FSC follow its guidelines and explicitly include PT Balikpapan Chip Lestari, Tarakan Mill (PT Phoenix Resources International) and other RGE shadow companies in its corporate group.
- An immediate freeze on all new MUFG financing for the Royal Golden Eagle group
- Suspension of all sourcing from RGE by global brands until verified, group-wide deforestation-free operations are in place.
“RGE is actively driving deforestation across Borneo while MUFG provides the financial fuel,” Averbeck added. “Communities will inevitably suffer the consequences, including landslides and catastrophic flooding. The Tanoto family’s business empire and the banks enabling it need to be held accountable.”