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Major palm oil companies failed to secure proper permits in Indonesian Borneo

Some of Indonesia’s biggest and most powerful palm oil companies appear to have failed to initially secure the proper permits to convert rainforests to oil palm plantations in Central Kalimantan, reports Greenomics, an Indonesian activist group.

Companies owned by the Sinar Mas Group, Wilmar Group, BGA/IOI, Musim Mas, and Astra Lestari, among others, do not appear on a list of firms that possess the Forest Area Relinquishment Licenses (IPKH) in Central Kalimantan, a province in Indonesian Borneo.

Elfian Effendi, Greenomics Indonesia’s Executive Director, said the lack of IPKH licenses suggests the companies also failed to obtain required Timber Exploitation Licenses (IPK) when they established their plantations.

“In general, the subsidiaries of these big palm oil groups do not have IPKH, which gives us good grounds for believing that they also do not have IPK,” he said in a statement. “There are also companies that do have IPKH but which we strongly suspect of not having secured IPK.”

“The failure to secure both an IPKH and an IPK clearly indicates that illegal operations are going on, which will of course result in losses to the state.”

The list was developed by the Ministry of Forestry under a directive by President Susilo Bambang Yudhoyono, which aims to assess the economic losses caused by illegal mining and plantation development. That assessment found that less than 20 percent of plantation companies and less than 1.5 percent of mining firms had the proper permits operate in Central Kalimantan. The Ministry of Forestry estimated potential losses to the state at 158.5 trillion rupiah ($17.6 billion) in the province alone.

It is unclear from the Ministry of Forestry list whether these operators subsequently acquired the proper permits.

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