NGOs Call Out 26 Palm Oil Companies for Illegal Operations in Riau


DECEMBER 10, 2016

Jakarta. A number of palm oil plantations in Riau province have allegedly received under the table permits, according to a report by a coalition of environmental NGOs dubbed the Eyes of the Earth, or EoF.

Earlier in 2014, the Forestry Ministry had converted 1.6 million hectares of forest areas into non-forest areas under a ministerial decree, but 26 companies have been found to be operating under the wrong type of license within the converted area as they are missing cultivation permits (HGU) and forest-estate release permits.

“We urge the Corruption Eradication Commission [KPK] to investigate the land swap scandals of a forest area covering more than 1.6 million hectares,” Woro Supartinah, coordinator for Jikalahari NGO which is a member of EoF, said in a statement on Thursday (08/12).

According to EoF’s report, the majority of palm oil plantations within the converted area are operating sans proper permits and licenses and are not included in the Forest-Estate Release Progress Data 201, based on the book of forestry spatial data 2015.

WALHI, or Friends of the Earth Indonesia, told the Jakarta Globe that palm oil estates which operate without proper licenses or permits are corrupt and a form of tax evasion.

“These plantations are not paying taxes, and do not have a tax identification number [NPWP]. We could lose up about Rp 170 trillion [$12.7 billion] in state losses,” Riko Kurniawan, WALHI executive director said on Friday.

The coalition has urged the ministry of environment and forestry to revoke the ministerial decree and investigate palm oil companies that own plantations in the converted area.

Meanwhile, some of the plantations were also found to be linked with big industry players known to have pledged for sustainable palm oil, leaving EoF to question their sustainability pact.

“Global palm oil companies have committed towards a sustainable supply chain from trustworthy sources, but looking at this report, there needs to be a clarification from them so consumers do not feel cheated,” said Nursamsu, EoF coordinator from WWF Indoensia.

EoF noted that with these claims, the 26 companies could be threatened with a prison sentence of minimum 5 years and maximum 15, and a fine of at least Rp 5 billion and maximum Rp 15 billion, for violating the law on Elimination and Prevention of Destruction of Forests.