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Probe finds palm oil firm illegally clearing forest in Sumatra wildlife haven

A long-tailed macaque in Gunung Leuser National Park. Image by Rhett A. Butler/Mongabay.

  • An investigation by the Rainforest Action Network (RAN) indicates that a palm oil company in Sumatra has been clearing forests illegally since at least 2016.
  • The extent of the clearing by PT Nia Yulided Bersaudara (NYB), nearly two and a half times the size of New York City’s Central Park, makes it the top deforester among companies that have an oil palm concession in Sumatra’s Leuser Ecosystem.
  • RAN’s investigation found the company’s logging activities and timber royalty payments aren’t registered in government databases, and its initial permit was granted under suspicious circumstances by a politician related to the NYB president.
  • Yet despite these red flags, NYB has so far managed to evade government measures to crack down on licensing irregularities and environmental violations in the palm oil industry, including the mass revocation of permits announced at the start of this year.

JAKARTA — A palm oil company responsible for clear-cutting forests in an Indonesian ecosystem that’s the only place on Earth where tigers, orangutans and rhinos roam appears to be doing so illegally, a new investigation shows.

PT Nia Yulided Bersaudara (NYB) holds a 2,940-hectare (7,260-acre) concession to cultivate oil palms inside the Leuser Ecosystem in the north of the island of Sumatra. According to the U.S.-based Rainforest Action Network (RAN), NYB cleared at least 595 hectares (1,470 acres) of forest in its concession from April 2016 to early 2021. Between January and October 2021, another 204 hectares (504 acres) of forests were lost in the concession — a total area nearly two and a half times the size of New York City’s Central Park.

RAN said satellite analysis shows logging there has persisted through at least January 2022. This makes NYB the oil palm concession holder with the highest rate of deforestation in the Leuser Ecosystem.

Crucially, its forest-clearing activity, a precursor to planting oil palms, appears to be illegal, according to RAN. This is because the logging isn’t registered in the environment ministry’s online Forest Product Administration Information System (SIPUHH). The ministry established the system to store information on timber production planning, logging, marking, transportation and processing.

In Sumatra’s Aceh province, where NYB’s concession is located, the SIPUHH system is enforced by a provincial agency called the BPHP. Agency head Mahyuddin said the company’s logging activities aren’t recorded in the SIPUHH system.

RAN says this means NYB’s activities are illegal; a 2019 environment ministry regulation states that wood that’s not included in the SIPUHH system is illegal.

Greenpeace Indonesia forest campaigner Syahrul Fitra said NYB is also not registered in the ministry’s non-tax revenue system (SIPNBP), which stores information on companies that pay timber royalties. Any company operating legally would show up in the system as having paid royalties for the timber it logged, he said.

Syahrul added there are some instances where companies operating lawfully are registered in the SIPUHH database but not the SIPNBP, or vice versa, because the two systems are not integrated. In NYB’s case, however, the fact that it doesn’t show up in either is “a strong indication that the company is operating illegally,” Syahrul said.

Mongabay tried to reach out to NYB for a comment but the company has no online presence or apparent phone number.

Aerial video captured an area of critical lowland Leuser Ecosystem forest habitat destroyed inside PT. Nia Yulided Bersaudara’s (PT.NYB) concession in East Aceh. Credit: Acehsatu.com, November 2021

‘Conflict of interest’

The Leuser Ecosystem covers nearly 2.3 million hectares (5.7 million acres) in the provinces of Aceh and North Sumatra, and is known as being the last place on the planet where critically endangered Sumatran rhinos, tigers, orangutans and elephants coexist.

In the past decade, the ecosystem has lost large swaths of its forests as palm oil companies have expanded into the region and started clearing land. The palm oil produced from this deforestation often end up in the global supply chain, with major international brands sourcing from operators in Leuser.

The circumstances behind NYB getting a concession to operate in the Leuser Ecosystem also point to shady practices. According to RAN, the company was granted its initial permit by the former acting governor of Aceh province, Tarmizi Abdul Karim. Company registration documents seen by RAN name Dedy Sartika, a son-in-law of Tarmizi, as the president of NYB.

In 2012, when Tarmizi was appointed as acting governor, NYB submitted an application for a plantation license to the provincial government agency that managed the Leuser Ecosystem, called the BPKEL. RAN reported that the BPKEL refused to issue the permit because the area being requested was located inside the Leuser Ecosystem.

The Aceh government under Tarmizi dissolved the BPKEL in October 2012, opening the way for the acting governor to issue the permits to NYB.

RAN said this “creates a strong appearance of conflict of interest that merits further investigation.”

Fungi grows on the forest floor in Gunung Leuser National Park. Image by Rhett A. Butler/Mongabay.

Evading scrutiny

NYB also appears to have emerged unscathed from measures by the national government to police the palm oil industry. In 2016, the government announced a moratorium on oil palm cultivation and mining in the Leuser Ecosystem. The moratorium also called for a review of existing concessions in the region and a ban on land clearing until the review was complete. A similar palm oil moratorium came into force nationwide in 2018 and expired in September 2021.

Yet despite both the Leuser and national moratoriums, authorities haven’t initiated an investigation into NYB’s apparent conflict of interest or the company’s violation of the ban on clearing forests inside its concession, according to RAN.

“The NYB case shows that, five years after the declaration of the palm oil moratorium in Aceh by the national and provincial governments, the moratorium has not been effectively implemented inside all existing palm oil concessions in the Leuser Ecosystem,” RAN said.

The company also evaded a wholesale revocation of permits for plantation companies announced by the national government at the start of this year. It doesn’t show up on the list of affected companies.

RAN said the findings that indicate NYB logging illegally within its concession should be reason enough for the government to launch an investigation into the company and revoke its permit.

This is important to “ensure an end to the illegal harvesting of timber and the protection and restoration of lowland rainforests that have been destroyed under NYB’s watch,” according to RAN.

Oil palm seedlings sprout on an illegal farm in Gunung Leuser National Park. Image by Rhett A. Butler/Mongabay.

Dispute with local communities

NYB’s concession also reportedly overlaps with land claimed by local communities.

Local farmers who are members of a cooperative allege that NYB’s concession occupies more than 2,000 hectares (4,900 acres) of their land. They say they’re in the process of acquiring legal recognition of their land rights.

In April 2021, the farmers staged a demonstration in protest against the company’s operations. Speaking with the farmers during the protest, an NYB official named Saifullah said the company would find a solution to the problem.

He added that NYB had acquired all the necessary permits to operate, and that the land where it planned to cultivate was “not owned by the locals.”

Banner image: A long-tailed macaque in Gunung Leuser National Park. Image by Rhett A. Butler/Mongabay.

Learn more about Leuser: Mongabay’s podcast interviews Rudi Putra, a legendary biologist who won the Goldman Environmental Prize and is chairman of the Leuser Conservation Forum, listen here: 

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