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Indonesia’s revocation of palm oil, mining permits marred by ‘maladministration’

Rainforest in Sumatra. Photo credit: Rhett A. Butler / Mongabay

Rainforest in Sumatra. Photo credit: Rhett A. Butler / Mongabay

  • Indonesia’s environment ministry may have committed maladministration in announcing the revocation of nearly 200 permits for logging, plantation and mining concessions, the country’s office of the ombudsman says.
  • If the concession holders were negligent in managing their concessions, as the ministry claimed, then the problem should have been detected much earlier and dealt with case by case, indicating a failure by officials to periodically review the permits, the ombudsman says.
  • It adds that the environment ministry has no authority to revoke oil palm concessions, whose final permits fall under the remit of the land ministry to do so.
  • Environmental law experts had warned shortly after the revocations were announced in January that the government had left itself wide open to lawsuits from the affected companies; at least one coal-mining company has already filed suit for the return of its concessions.

JAKARTA — The office of the Indonesian ombudsman says it has found indications of maladministration in the government’s decision to revoke hundreds of logging, plantation and mining permits across the country.

President Joko Widodo announced the mass revocation at the start of the year on the basis that the companies that were awarded the concessions were deemed to be moving too slowly in exploiting natural resources.

But the unilateral move has spawned widespread confusion and uncertainty, prompting the office of the ombudsman, which has a mandate to investigate public complaints against government policies, to look into the matter.

Yeka Hendra Fatika, a commissioner in the ombudsman’s office, said he had found at least two indications of maladministration.

The first, he said, was the fact that among the permits targeted for revocation were those issued years before by the Ministry of Environment and Forestry. That points to a failure by the ministry to fulfill its duty of routinely evaluating the concession holders, Yeka said.

The ministry should have been able to detect any violations committed by the concession holders much earlier and impose appropriate sanctions if it had evaluated the permits periodically, as it was supposed to, he said.

“If violations are found but there’s no sanctions imposed, then it’s not only the concession holders who have committed violations. This also indicates maladministration done by officials,” Yeka said during an online seminar on April 7. “This is because [of the] failure to carry out legal obligations as public service officers in evaluating all issued permits.”

The second indication of maladministration comes from the ministry’s revocation of so-called forest release decrees, Yeka said.

Nearly two-thirds of the permits that the ministry announced it was pulling, 126 out of 192, are forest release decrees for plantation firms, including oil palm growers.

In Indonesia, lands are divided into two main categories: “forest area” and “areas for other purposes,” also known as APL. When an area is zoned as “forest area,” it’s usually off-limits to any kind of clearing. Some forest areas are earmarked for “productive” activities, which include growing forest crops, selective logging, and agroforestry — but not oil palm cultivation.

Forest release decrees, issued by the environment ministry, rezone forest areas into APL areas, effectively allowing forests to be cleared for oil palm plantations. Even after it has obtained a forest release decree, a company still needs to acquire a right-to-cultivate permit, or HGU, from the land ministry — the last in a series of licenses that oil palm companies must obtain before being allowed to start planting.

In the case where a company has already acquired an HGU, it’s the land ministry — and not the environment ministry — that has the authority to revoke the concession, Yeka said.

“If the ones revoking [the concessions] are not the officials with the authority to do so, then this could lead to maladministration,” he said. “That’s what I found when I read the decree [from the environment ministry].”

Oil palm plantation next to rainforest in Borneo, Indonesia. Image by Rhett A. Butler / Mongabay.

Lawsuits incoming

Environmental law experts previously warned that the unilateral manner of the permit revocations could leave the Indonesian government wide open to lawsuits. And at least one coal-mining company has already filed suit against the government for the return of its concessions.

Of the 192 companies affected by the environment ministry’s decision, whose concessions cover a combined area of 3.13 million hectares (7.73 million acres), 83 have requested clarifications about the revocation of their permits.

Yeka said there was enough basis for the ombudsman to launch an investigation, but that this would have to be triggered by a public complaint to the ombudsman’s office.

“It seems like the material related [to the maladministration] is strong, there’s no need to debate that this decree is problematic,” he said.

However, Yeka said his office had not received any complaints in the three months since the mass revocations were announced. He said the ombudsman’s office could take the initiative to launch an investigation on its own, but this would take longer as there would need to be strong reasons for the body to do so, whereas if it received a complaint, then it would be legally obligated to follow up on it.

Eddy Martono Rustamadji, the head of the agrarian department at the country’s main palm oil business association, GAPKI, said he wasn’t aware whether any of the association’s members planned to lodge a complaint with the ombudsman’s office.

“With the explanation [from the ombudsman’s office] this morning, we’ll see if there’s any company in the list [of affected companies] that will report or not,” Eddy said during the April 7 discussion.

He added the government’s “unnecessary” actions had caused widespread disruptions for palm oil companies.

“This gives [us] more work to do to clarify [the permit revocations], something that was actually unnecessary,” he said. “There are problems on the ground as well. There are signs [erected on concessions], saying that they have been revoked.”

Mongabay reached out to the environment ministry’s secretary-general, Bambang Hendroyono, for comment, but did not receive a response by the time this story was published.

Yeka said that if the ministry is proven to have committed maladministration, the ombudsman’s office would recommend that it revise or rescind the policy.

“If [maladministration is] proven, the decree has to be revised by including substances that needed to be changed,” he said.


Banner image: Rainforest in Sumatra. Banner image: Rhett A. Butler / Mongabay.


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