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Palm oil, logging firms the usual suspects as Indonesia fires flare anew

Peat fires in Suka Damai village, Rokan Hilir district, Riau, Indonesia, have destroyed palm oil plantations, houses, cars and motorcycles. Image by Zamzami/Mongabay Indonesia.

  • Fires have flared up once again on concessions held by palm oil and logging companies in Riau province on the Indonesian island of Sumatra.
  • For many of the companies involved, this isn’t the first time fires have sprung up on their land, prompting activists to question the government’s ability to enforce its own regulations against slash-and-burn forest clearing.
  • Much of the affected area is peat forest, some of it being developed in violation of a ban on exploiting deep peatland, whose burning releases massive amounts of carbon dioxide into the atmosphere.
  • A failure by the government to collect on fines levied against the few companies prosecuted for setting fires on their concessions means there’s little deterrent effect for other companies that see slash-and-burn as the cheapest way to raze forests for plantations.

JAKARTA — Oil palm and logging companies in Indonesia have come into public glare once again as another season of forest fires flares up in Sumatra.

Hotspots have been detected in 12 concessions in Sumatra’s Riau province, a perennial tinderbox where huge swaths of the land have been carved up for palm estates and logging areas. Nine of those concessions belong to palm oil companies, two to oil and gas operators, and one to a logging company, according to the Ministry of Environment and Forestry.

A separate survey by the NGO Forest Watch Indonesia (FWI) has found 58 hotspots in palm concessions and 88 in logging concessions.

Many of these concessions contain areas of peat swamp, which are typically drained ahead of planting, leaving behind a highly combustible layer of mulch that releases huge amounts of carbon dioxide when burned.

The presidentially appointed Peatland Restoration Agency (BRG) says hotspots on peat areas within designated concessions account for up to 40 percent of hotspots across all peatlands.

The government has recorded fires spanning an area the size of 5,000 football fields in Riau since the start of the year, with hotspots in 11 of the 12 districts that make up the province.

Rasio Ridho Sani, the enforcement chief at the environment ministry, said his office had sent warning letters to the companies with fires on their concessions, demanding that they take swift action to end the burning.

“Of course if we see an indication that [the fires] are continuing and that there’s a crime, we will enforce the law,” he told reporters in Jakarta.

Slash-and-burn clearing is widely employed by concession holders as a cost-effective method of preparing the land for planting, and some of the companies with hotspots in their concessions have a history of fires, according to the Riau Forest Rescue Network (Jikalahari), an NGO.

Some were among a group of 17 — 12 logging and five oil palm — subjected to a government-sanctioned audit in 2014 to determine who was responsible for the fires that year in Riau.

The audit measured the companies’ level of compliance with environmental regulations, such as whether they cultivate on deep peatlands that should’ve been protected or not, and whether they have proper infrastructure and equipment in place to prevent and extinguish fires.

None passed the compliance test, which looked at whether they were protecting areas of deep peat as required by law, and whether they had the proper infrastructure and equipment in place to prevent and put out fires. The worst-performing company was found to have complied with just 7 percent of its 122 obligations, while the compliance rate for the others ranged between 26 and 52 percent.

Some of those companies audited five years ago are on the list of companies with fires on their concessions this year, Jikalahari says, citing as repeat offenders PT Bumi Reksa Nusa Sejati, with five hotspots on its land, PT Sumatera Riang Lestari (60 hotspots) and PT Rimba Rokan Lestari (67).

These three companies were among 49 that Jikalahari reported to the Riau police and environment ministry in 2016 over the fires that kept occurring in their concessions.

A scorched peat forest in Riau province, Indonesia. Image by Suryadi/Mongabay Indonesia.

The usual suspects

Weak law enforcement allows the same companies to keep popping up on the list of firms with fires on their concessions, according to Jikalahari deputy coordinator Okto Yugo Setyo.

“Looking at the forest fires that are happening again now, the ministry should have followed up on our report [in 2016],” Okto said. “But for the last three years, there hasn’t been any progress from the ministry’s law enforcement unit.”

There’s also been little movement on the issue on the part of the police. In 2016, the Riau police dropped investigations into 15 of 18 companies allegedly involved in forest fires the previous year, despite indications that some of them had benefited from the fires by planting the land afterward. Among the 15 whose investigations were dropped was PT Sumatera Riang Lestari.

“Companies whose concessions are burning again have shown they’re not afraid of the environment ministry, even though the ministry’s law enforcement has shown some progress compared to the previous administration,” Okto said.

He added that proper deterrence would require more than just a warning letter.

“It’s no longer appropriate for the companies to just be warned,” Okto said. “The ministry should immediately review these companies’ environmental permits and environmental impact assessments.”

Should such a review result in the companies losing their concessions, the land can be given over to be managed by local communities under the government’s social forestry program, Okto said.

Nurul Huda, a criminal law expert from Riau Islamic University (UIR), called on the police to reopen the investigations into the 15 companies, given that many were repeat offenders this year, local media quoted him as saying.

Even Sembiring, head of policy analysis at the Indonesian Forum for the Environment (Walhi), the country’s biggest green NGO, said there needed to be a sweeping review of all permits for concessions located on peatland. Under a 1990 regulation, areas with a peat layer deeper than 3 meters (10 feet) are strictly off-limits and must be protected. A 2016 government peat protection regulation reiterates this point.

The 2014 audit in Riau found some companies had submitted bogus environmental impact analyses in order to exploit areas with peat layers more than 3 meters deep. But there’s been no follow-up to the audit and no review of the permits in question, which in effect means the companies have been allowed to continue operating on the basis of the falsified environmental impact analyses.

“The only way to save our peatland and to keep the carbon below the ground is to evaluate all permits in peat ecosystems,” Walhi’s Even told reporters in Jakarta. “The government should have made this a priority.”

Indonesia’s military and police chiefs visited a burned area in Riau’s Pulau Rupat region in March, but Jikalahari coordinator Made Ali said any promise of strict law enforcement against companies found setting fires was mere lip service.

“Why don’t [the military and police] check the concessions of the companies that are burning in Pulau Rupat?” he said in a statement, adding it was “clear that there are a large number of hotspots in the concessions” there of companies that include PT Sumatera Riang Lestari.

Fires break out behind locals’ houses in the Kembung Baru village, Riau province, Indonesia. Image by Suryadi/Mongabay Indonesia.

Failure to collect

The government has touted significant progress in preventing fires during the annual dry season since massive blazes destroyed huge swaths of forest in Sumatra and Borneo in 2015. But the contribution of government policies toward the decline in fires in 2017 and 2018 is debatable, with experts pointing out that the lack of an El Niño system in the past two years made for milder dry seasons and hence the smaller number of fires. The 2019 dry season is expected to be exacerbated by a return of El Niño, as in 2015.

The government has tried to go after companies that deliberately set fires on their concessions, by taking them to court, says Walhi spokeswoman Khalisah Khalid. Since 2015, it has won lawsuits filed against 10 companies for setting forest fires, who have been ordered to pay a total of 2.7 trillion rupiah ($190 million) in fines. The government also won a record 16.2 trillion ($1.1 billion) fine from a company accused of illegally clearing forests (though not by setting fires).

President Joko Widodo cited these 11 cases during a televised election debate in February as evidence that his administration had intensified its crackdown on offending companies.

What he didn’t mention, though, was that none of the companies have paid anything to date.

“The law enforcement isn’t working because the guilty verdicts can’t even be executed,” Khalisah said. “As a result, these verdicts won’t deter companies. That’s why forest fires keep happening.”

Greenpeace Indonesia forest campaigner Arie Rompas questioned why the government had failed to collect on any of the fines.

“A citizen who doesn’t pay his taxes can be punished under the law,” he said in a statement. “So why aren’t the owners of these big companies forced to pay their fines or have their assets seized?”

Fires engulf a palm oil plantation in Rokan Hilir district, Riau, Indonesia. Image by Zamzami/Mongabay Indonesia.

Bureaucratic barriers

The environment ministry, in its defense, says some of the companies have challenged the court rulings, delaying the collection of fines.

The most high-profile case is that of palm oil firm PT Kallista Alam, which was found guilty in 2015 by a district court in Sumatra’s Aceh province of using fire to clear 10 square kilometers (3.9 square miles) of land in the Tripa peat swamp. The company pursued a series of appeals all the way up to the Supreme Court, which upheld the initial ruling and ordered the company to pay an then-unprecedented 366 billion rupiah, about $26.5 million at the time, in fines and reparations.

Its final ruling came in April 2017, at which point the company should have exhausted all avenues of appeal.

And yet PT Kallista Alam managed to evade this obligation by filing for legal protection from the same district court that had ruled against it in the first place. The company then filed suit against the government on the basis of a typo in the coordinates of the concession as submitted in the environment ministry’s original complaint. In 2018, the district court in Aceh ruled in favor of PT Kallista Alam, effectively shielding it from the Supreme Court-ordered fines on that basis.

Since then, the environment ministry has appealed the decision to the provincial high court, which ruled in its favor. That should have closed off all options for legal redress for PT Kallista Alam. Yet the company still hasn’t ponied up the fine.

Rasio, the ministry’s enforcement chief, said PT Kallista Alam didn’t respond to two letters from the ministry demanding payment. That has prompted the district court to order an auction of the firm’s assets, including its land bank and any buildings or crops on it, as of Jan. 22.

“This marks significant progress,” Rasio said, adding the auction was expected to raise sufficient funds to cover the fine.

Another company facing imminent auction of its assets is PT Merbau Pelalawan Lestari, a logging company that has also ignored payment demands from the ministry, Rasio said.

“Our courts don’t have experience in executing environmental cases that are big in scope,” he said of the protracted process to collect the fines.

Bureaucratic barriers have also made the environment ministry’s job harder, he said. Before it can collect a penalty, the ministry must wait for the official court record of the verdict to become available — something that can take more than a year, as in the case of like the case of PT Surya Panen Subur, a palm oil firm.

And without a centralized depository of court rulings, the ministry can sometimes lose track of the official court verdict. That’s the case for PT Bumi Mekar Hijau, a pulpwood firm that was ordered to pay 78.5 billion rupiah ($5.5 million) for illegally setting fires on its concession in 2014.

The verdict was handed down in 2016, but the environment ministry says it doesn’t know where the official record has been posted. It says the record was delivered to the wrong subdistrict office and subsequently picked up by an unknown party. The ministry has since asked the court that handed down the ruling to issue a copy of the official verdict.


Banner image: Peat fires in Suka Damai village, Rokan Hilir district, Riau, Indonesia, have destroyed palm oil plantations, houses, cars and motorcycles. Image by Zamzami/Mongabay Indonesia. 

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