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Indonesian omnibus law’s ‘whitewash’ of illegal palm oil shocks its architects

  • Indonesian lawmakers appear outraged at a scheme from a law they already passed that grants amnesty to oil palm plantations operating illegally inside forest areas.
  • The amnesty scheme gives the operators a grace period of three years to apply for the proper paperwork, including a redesignation of the forest they’re illegally occupying to a non-forest designation.
  • The lawmakers, who overwhelmingly approved the law last November despite near-universal criticism, have called the scheme “whitewashing” and “eco-terrorism.”
  • One even expressed his own regret at not being a “forest thief” had he only known how lucrative it would be.

JAKARTA — Lawmakers in Indonesia have expressed shock — shock! — that a controversial bill they passed into law last year amid near-universal criticism legitimizes illegal deforestation for oil palm plantations.

The so-called omnibus law on job creation ushered in a wave of deregulation across a range of industries, including rolling back environmental protections and incentivizing extractive industries such as mining and plantations.

Oil palm plantations are prohibited by law from operating in areas designated as forest, but many continue to do so illegally. One of the omnibus law’s key concessions to the industry effectively legalizes this crime: It gives plantation operators a grace period of three years to obtain the proper permits, including the degazetting of the forest designation, and to pay the requisite fines, allowing them to resume their operations.

“This is a whitewashing,” Darori Wonodipuro, a lawmaker with the Gerindra Party, said at a March 30 hearing with environment ministry officials.

Yohanis Fransiskus Lema, a lawmaker from the ruling PDI-P, said illegal plantations are the result of an “organized environmental crime that involves state and non-state actors,” and blamed them for perennial problems such as forest fires.

Therefore, he said, the state should be meting out harsh punishment to deter people from establishing illegal plantations, rather than catering to them with an amnesty.

“It’s appropriate if we call this a form of eco-terrorism,” Yohanis said of the scheme from the law he helped pass. “Fines won’t deter people. Honestly, the law is really weak. [People who commit] crimes like these should be executed.”

An oil palm plantation in Indonesia. Image by Rhett A. Butler/Mongabay.

‘I should have been a thief’

The environment ministry has identified 3.37 million hectares (8.33 million acres) of oil palm plantations inside forest areas throughout Indonesia, or an area the size of the Netherlands. Four-fifths of this total area lies in just four provinces: Central Kalimantan on the island of Borneo, and South Sumatra, North Sumatra and Riau in Sumatra.

Just over a fifth of the illegal plantation area will soon be legal as the operators apply for degazetting of the forest designation. This will still leave 2.61 million hectares (6.45 million acres) of illegal plantations.

Sudin, a PDI-P lawmaker who chairs the parliamentary oversight commission for environmental affairs, questioned the rationale behind the amnesty scheme that he helped pass into law last November.

“Why should people who steal [only] get administrative sanctions?” he said. “[Operators are] hiding behind the omnibus law” — approved overwhelmingly by the PDI-P, Gerindra and their coalition partners — “with only administrative sanctions [imposed on them].”

He added that if he’d known there would be an amnesty scheme, “me and my friends should’ve been forest thieves since a long time ago as we’ll only have to pay administrative fines. What a joy [to live in] this country,” he added.

Darori also took issue with the lack of enforcement of the 2013 law prohibiting plantation operations inside forest areas. He said the government’s inaction in the period since then indicated it was simply waiting for a chance to issue an amnesty — which, again, Darori and his colleagues in parliament duly handed them last year.

He added the amnesty scheme could prompt the few companies and individuals prosecuted under the 2013 law to challenge their convictions.

“There are businesspeople who have had [their assets] seized and been imprisoned for eight years,” Darori said. “So why others are only fined? They’ll be bitter for sure.”

Interior of an oil palm plantation in Indonesia. Photo by Rhett A. Butler.
Interior of an oil palm plantation in Indonesia. Image by Rhett A. Butler/Mongabay.

Generating revenue from deforestation

The environment ministry, for its part, justified the amnesty program on the grounds that imposing fines was much easier, and more lucrative, than pursuing criminal cases.

“There are so many cases [for us to handle],” Rasio Ridho Sani, the ministry’s head of law enforcement, told the parliamentary hearing. “Hopefully with imposing administrative fines, this could speed up the process related to illegal activities, especially mining and plantation.”

He also touted the revenue potential from the ongoing deforestation.

“If there are millions of hectares [of illegal plantations], the amount of fines that we receive will be significant,” Rasio said. “But we don’t know yet [how much]. We have to calculate the appraisal.”

But Darori said the fines, ranging from 5 million to 15 million rupiah (about $350 to $1,000) per hectare of illegally occupied forest, were “laughable” and less than a tenth of what plantation companies can make just from selling the timber they cut prior to planting.

Muhtarom, a lawmaker from the PKB, another ruling coalition party, said the impact of illegal plantations inside forest areas goes beyond financial losses and leads to environmental damage.

“In reality, [the fines] don’t match with [our] hope because forest and environmental degradation will become a heavy burden for the government in the future because the damage versus the government revenue [from fines] are not comparable,” he said.

Lawmakers also expressed doubt that the government could compel the illegal plantation operators to pay the fines in the first place.

Most companies convicted in court of land and forest fires have managed to avoid paying the hefty fines handed down to them. The environment ministry has filed lawsuits against 28 companies to date and won judgments from them totaling 19.8 trillion rupiah ($1.37 billion). However, the companies have only paid out 2.5% of that amount.

Lawmakers also said that by allowing the illegal operators to apply for degazetting of the forest, the government will be missing out on the penalty fees that the companies currently pay for operating inside forest areas. According to data from the environment ministry, there’s a total of 2.6 trillion rupiah ($180 million) in penalties that are past due.

“Why continue imposing fines when it’s not clear [when companies will pay] the amount already owed?” said lawmaker Renny Astuti from the Gerindra Party.


Banner image: Deforestation for oil palm plantation in Riau, Indonesia. Image by Rhett A. Butler/Mongabay.


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