- An environmental NGO that flagged deforestation by two pulpwood companies linked to a Forest Stewardship Council member says the FSC has dragged its feet on carrying out a proper investigation.
- The companies and the FSC member, a paper mill, are all controlled directly or indirectly by Robert Budi Hartono, Indonesia’s richest person.
- The complaint was filed last December, but the investigation only began in February this year, and has been put on hold since June because of the COVID-19 pandemic, the FSC says.
- The NGO has questioned the FSC’s delayed response, its non-standard investigation process, and its apparent failure to link the pulpwood companies to the certified paper mill earlier.
JAKARTA — Activists say the Forest Stewardship Council, the world’s leading sustainable forestry certifier, has failed to properly investigate reports of alleged deforestation by companies linked to Indonesia’s wealthiest individual.
In December 2019, the environmental group Auriga Nusantara filed a formal complaint with the FSC, alleging that pulpwood plantation companies PT Fajar Surya Swadaya (FSS) and PT Silva Rimba Lestari (SRL) cleared more than 32,000 hectares (79,000 acres) of forests in the Bornean province of East Kalimantan between 2013 and 2017.
The companies are controlled either directly or indirectly by Robert Budi Hartono, a cigarette and banking billionaire who first made his fortune with the Djarum tobacco company and is now the richest person in Indonesia. And while neither FSS nor SRL are certified by the FSC, another Hartono-controlled company is: PT Bukit Muria Jaya (BMJ), a paper mill. (Other members of the Hartono family also own minority shares in the three companies, according to official documents.)
Under the FSC’s rules, BMJ’s majority shareholder, in this case Robert Hartono, can be deemed “indirectly involved” in the “unacceptable activities” of other companies in which they also hold shares or sit on the board.
So while BMJ itself isn’t implicated in the alleged deforestation, the FSC, under its Policy for Association (PfA) rules, is obligated to investigate the allegations against the other Hartono-controlled companies. And those allegations point to violations of the FSC’s zero-tolerance stance on deforestation, according to Syahrul Fitra, a researcher with Auriga.
Syahrul said that despite his organization and other NGOs having documented the deforestation in a report published in August 2018, with a follow-up in October 2019, the FSC has failed to act on the findings. That prompted Auriga to lodge a complaint with the FSC last year.
In response, the FSC decided to forgo its standard procedure in handling the complaint and hire an external consultant, in a bid to speed up the investigation process. But the council recently announced it had to postpone the investigation “due to the resource and travel restrictions resulting from the COVID-19 crisis.”
Syahrul questioned the FSC’s seriousness in handling the complaint, saying the council has been slow in responding to Auriga’s complaint from the very beginning. He said the NGO filed the complaint on Dec. 4, 2019, but it wasn’t until Feb. 18 this year, more than two months later, that the organization responded — far longer than the customary 10 days that the FSC gives itself to respond to a complaint.
“So the process is already taking longer than usual,” Syahrul said. “If we hadn’t found the connection between BMJ [as a member of the FSC] and FSS and SRL [as the companies allegedly clearing forests], then this case will remain hidden.”
He said the FSC, as a large organization with lots of resources, should have been able to draw the connection between the Hartono-controlled companies on its own, without having to rely on a third-party complaint.
“On its website, SRL says that it’s a part of Djarum Group, so it’s very easy [to see the connection],” Syahrul said. “How can an organization of such a high caliber like the FSC fail to notice the connection? And when FSS and SRL cleared forests, [the FSC] also failed to detect it.”
Supin Yohar, the director of Auriga’s forestry department, echoed the same concerns.
“There’s no way the FSC didn’t know the connection between a company that they certify, BMJ, with the structure of the company’s shareholders,” he said. “If we, as members of the public, can find the connection from published data, then the FSC that issues the certificate should have been able to do the same.”
Non-standard procedure
In its response to Auriga’s complaint, the FSC said that it would hire an external consultant instead of following the council’s standard investigation process, which starts with the establishment of a formal complaints panel.
In this case, the consultant is tasked with conducting an independent deforestation analysis using satellite imagery to assess the scale of land clearing allegedly done by the companies from 2015 to 2019.
“FSC considers satellite imagery and GIS analysis as powerful tools that complement field verifications, particularly when the evaluations conducted look into alleged forest conversion,” the council said in a statement to Mongabay.
Syahrul, however, said GIS, or geographic information system, analysis is a poor alternative to the normal procedure for ground-truthing deforestation complaints. Normally, the FSC has detailed deadlines, decision-making processes, and an appeals process for handling complaints. But a GIS analysis isn’t regulated under the FSC’s rules and thus is not subject to such guidelines, Syahrul said.
As such, the alternative process doesn’t ensure fairness, transparency, or a timely conclusion to the investigation, he said.
“If an organization makes a standard procedure, or a rule, we expect that organization to abide by that rule,” he said. “But if that organization doesn’t follow the rule that it set out on its own, then what can we expect? I’m not saying that the FSC can’t be trusted, but they’re showing inconsistencies.”
Slow progress
According to Syahrul, the FSC told Auriga that the council made the decision for the sake of efficiency.
“If they say that [hiring GIS experts as external consultants] is more effective, then the procedure should have been faster than the standard procedure,” he said.
Instead, the FSC kept asking for more time to conduct the GIS analysis, without giving clear reasons, Syahrul said.
In June, the FSC told Auriga that it had to postpone the investigation, citing the COVID-19 pandemic.
“Auriga is sympathetic to the impact of COVID and ongoing safety concerns that limit normal activity,” Syahrul said. “However, Auriga questions the need for such a lengthy delay.”
He said a GIS analysis can be done safely from home, with no field visits needed.
“As long as the GIS experts have good internet connection, then they can download high-resolution satellite images,” Syahrul said.
He also questioned why the FSC wouldn’t spend a few thousand dollars, the estimated cost of hiring a consultant to analyze deforestation in an area of less than 100,000 hectares (247,000 acres), given that it has a $30 million operations budget.
“I’m not convinced that they don’t have resources, because they’re issuing many certificates, and the companies associated with the council have to pay routine membership fees,” Syahrul said.
The FSC said it had temporarily suspended the investigation not because of budgetary constraints, but because the COVID-19 crisis has forced it to reduce work hours for its employees.
“Unfortunately, due to the COVID-19 crisis, FSC is working temporarily with extraordinarily limited capacity and resources which has an inevitable impact on work planning, such as the need to put the initiation of certain PfA investigations on hold, including the Djarum case,” the council said. “FSC hopes the situation normalizes soon and FSC can return to its usual capacity to process PfA related cases.”
And while GIS analysis can be done remotely, a reliable investigation still requires significant efforts in terms of management and monitoring from the council, according to the FSC.
“It should also be noted that, regardless of COVID circumstances, only a certain number of PfA cases can be processed by FSC at the same time,” the council said. “This can sometimes impact the speed at which cases and investigations are processed, to make sure that the quality of these investigation processes is never compromised.”
Syahrul said the longer the FSC delayed its investigation, the higher the chance that the two pulpwood companies would continue destroying natural forests.
“As of 2018, there was still forest clearing” occurring in their concessions, he said.
Any deforestation allegedly carried out by FSS and SRL within their respective concessions is not technically illegal under Indonesian law. But since the two companies are affiliated with the Djarum Group, and the Djarum Group is associated with the FSC through BMJ, that FSC membership is at stake if the group doesn’t address the alleged deforestation. Losing FSC membership would be a huge blow to the group’s reputation, Syahrul added.
“We’re hoping for Djarum, as one of the biggest companies in Indonesia whose owner is the richest man in the country, to become a role model by protecting the forests,” he said. “Especially at a time when the exploitation of natural resources is being put under the spotlight.”
Banner image: Excavator working an acacia plantation in Riau, Indonesia. Image by Rhett A. Butler/Mongabay.
