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Indonesian officials charged in $1.6m bribes-for-permits scheme

Oil palm plantation in Rawa Singking Wildlife Reserve. Image by Junaidi Hanafiah/Mongabay-Indonesia.

  • Two land agency officials have been charged with taking $1.6 million in bribes in exchange for granting oil palm plantation concessions spanning an area of 200 hectares (500 acres) in Indonesian Borneo.
  • Investigators from the KPK, Indonesia’s anti-graft commission, are also investigating the businesspeople allegedly involved in the deal.
  • KPK deputy chairman Laode Muhammad Syarif says the case highlights the dangers of the government’s continued refusal to allow greater transparency in the permit-issuance process.
  • A watchdog group warns that corruption in the palm oil industry could get worse if the KPK is weakened under the purview of a controversial new law.

JAKARTA — Anti-corruption investigators in Indonesia have charged two government officials for allegedly taking $1.6 million in bribes to grant permits for oil palm plantations spanning just over half the size of New York’s Central Park.

The Corruption Eradication Commission (KPK) announced the charges on Nov. 29 against Gusmin Tuarita, an official at the National Land Agency (BPN), and Siswidodo, from the West Kalimantan provincial land agency.

The pair stand accused of taking 22.23 billion rupiah in bribes in exchange for granting plantation concessions spanning an area of 200 hectares (500 acres) in West Kalimantan, Indonesian Borneo.

The KPK did not identify the parties that allegedly paid the bribes, but spokesman Febri Diansyah told local media that a number of individuals were being investigated. “There are some businesspeople in the palm oil industry whom we have questioned,” he said as quoted by Beritasatu.

The case marks the latest anti-graft bust by the KPK, which has recently focused more of its attention to corruption in Indonesia’s natural resources sector. In 2016, a KPK audit found that the country lacked a credible and accountable system to prevent violations and corruption in the palm oil industry. The commission identified the permit-issuance process for plantations as being particularly rife with corruption.

KPK deputy chairman Laode Muhammad Syarif said this was because of the lack of transparency in the process, which often results in permits being issued that overlap with existing land claims or onto forest areas that are off-limits to plantations.

The BPN has insisted on keeping the plantation permit data, which include maps and boundaries, out of the public’s reach, in defiance of a 2017 order by the Supreme Court for the agency to make the data publicly available.

Sofyan Djalil, the head of the BPN, has refused to follow the order, arguing that the documents are the property of private companies, and that publishing them could reveal confidential financial information.

The government has doubled down on that stance, instructing member companies of the country’s powerful palm oil lobby to not share their plantation data with other parties, including external consultants, NGOs, and multilateral and foreign agencies.

Some palm oil companies have publicly said they have no problem with publishing their concession maps, though others in the industry have expressed the view that local thugs could use the maps to extort them.

The country’s palm oil lobby, known by its Indonesian acronym GAPKI, meanwhile, has repeatedly said that opening up the HGU data would hurt the palm oil industry as the data could be scrutinized by the public, rocking the boat.

NGOs say that’s exactly why they need the maps, to monitor companies’ activities and hold them accountable.

University students heading towards the Indonesian parliament’s building in Jakarta to protest against several controversial bills, including the recently passed KPK law. Image by Hans Nicholas Jong/Mongabay.

‘Naughty’ agencies

The move away from transparency and toward greater opacity has drawn intense criticism, not only from civil society groups but also from other government agencies.

Both the country’s ombudsman and the KPK have recommended the BPN make the plantation permit data available to the public. The agency’s refusal to do so in the interests of preventing corruption prompted Laode to label the BPN one of four “naughty” government agencies. The other three are also involved in regulating the natural resources sector: the Ministry of Energy and Mineral Resources, the Ministry of Agriculture, and the Ministry of Environment and Forestry.

“To be honest, we’re complaining,” Laode told lawmakers during a parliamentary hearing on Nov. 27. “These four agencies have lots of budget but they have the worst management because they’re always closed off to the KPK.”

He cited the West Kalimantan bribery case as an example of the urgency for making the licensing process more transparent.

“Specifically for the BPN, we are hoping that the [plantation permit] data is made transparent, [as] the Supreme Court has already ruled that it should be,” Laode said. “Why is there a need to make it transparent? So that there’s no overlapping [permits]. There are even plantations inside forest areas.”

Khalisah Khalid, the head of politics at the Indonesian Forum for the Environment (Walhi), the country’s biggest green NGO, said making the permit data publicly available would compel the government to be more stringent about regulating the palm oil industry.

“It’s important because the public can scrutinize the data, which will make the government more accountable,” she told Mongabay.

A worker takes a chainsaw to an oil palm on an illegal plantation in Tenggulun. Image by Junaidi Hanafiah for Mongabay.

Weakening the watchdog

Khalisah also stressed the importance of allowing the KPK to retain its far-reaching investigative powers, given the reticence of other government agencies to go after corruption in the natural resources sector.

“That’s why we’re worried about the efforts to weaken the KPK,” she said. “Because other than the mining and coal sectors, the KPK also targets the forestry and plantation sectors.”

Parliament passed a hugely controversial bill in September that severely curtails the KPK’s ability to carry out investigations. Under the bill, which is being challenged at the country’s Constitutional Court, the KPK is no longer an independent state institution. Instead, it becomes a government agency, staffed by the very civil servants it was originally tasked with monitoring, and overseen by a council handpicked by the president and parliament — a body of legislators who have often been the target of anti-corruption investigations.

It has also been stripped of its authority to carry out independent wiretaps of suspects — one of the key weapons in its war on graft that has helped it achieve a near 100 percent conviction rate.

The passage of the bill prompted massive protests by university students in Jakarta and other cities across Indonesia, who called on President Joko Widodo to issue an executive order that would quash the new law. But despite having built his career on a reformist image and making the fight against corruption one of his priority agendas during his campaign, Widodo has made it clear that he will not issue the executive order.

Laode said these developments contradicted the president’s promise to strengthen the KPK.

“We’re still hoping for the president to issue the executive order,” he said. “We’re still very much hoping for that.”

Khalisah warned of corruption thriving in the plantation industry if the KPK was weakened.

“As an institution committed [to fighting corruption], the KPK mustn’t be weakened,” she said. “A strong KPK is needed to monitor the industry.”


Banner image: Oil palm plantation in Rawa Singking Wildlife Reserve. Image by Junaidi Hanafiah/Mongabay-Indonesia.


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