T

he Palembang District Court in South Sumatra is scheduled to deliver a ruling on Wednesday in a case involving a supplier to Sinar Mas Group, one of Indonesia'€™s largest conglomerates. The court'€™s ruling is predicted to set the future direction of how companies manage forest fires in Indonesia.

The Environment and Forestry Ministry'€™s law enforcement directorate-general, which filed the civil lawsuit against PT Bumi Mekar Hijau (PT BMH), the supplier in question, said on Monday that the ruling would set a precedent because of the scale of the case, with the government demanding a fine of Rp 7.8 trillion (US$571 million).

'€œThe judges'€™ ruling will determine the behavior of concession holders in preventing land and forest fires,'€ director general Rasio Ridho Sani said.

PT BMH allegedly caused fires on 20,000 hectares of land in Ogan Komering Ilir, South Sumatra, in 2014.

The government has demanded fines of Rp 2.6 trillion for damaging the environment and Rp 5.2 trillion for its recovery.

'€œWhat we'€™ve seen in the field is that fires did happen and the company did not have adequate facilities to prevent and manage forest fires. This resulted in huge forest fires affecting local people. Therefore, we believe the judges need to consider the facts of the case,'€ Rasio said.

He said that he was confident that the judges would declare PT BMH guilty if they took into account the evidence presented before them.

Moreover, a recent ruling by the Supreme Court, which rejected an appeal by palm oil company PT Kallista Alam and ordered the company to pay fines totalling Rp 366 billion for illegally burning large swathes of the Tripa forest in Aceh, could act as an example for the judges in the PT BMH case.

'€œThe ruling in the PT Kallista Alam case has added to our confidence,'€ said Rasio.

With such a huge fine, other companies, it is thought, would be more cautious in managing their concessions.

'€œNext year, people will be afraid if forest fires happen again. We will see companies setting up facilities to make sure [that forest fires do not happen],'€ said Rasio.

He added that other companies would also think twice before asking for concessions from the government.

'€œThey wouldn'€™t want to ask for concessions beyond their capabilities. Until now, they are asking for concessions that are so vast that their capacities are not enough [to manage the land] and they are not being adequately punished for their lack of control. But now, they are getting punished,'€ Rasio said.

Likewise, Indonesian Forum for the Environment (Walhi) forest and plantation national campaigner Zenzi Suhadi said that the annual land and forest fires that had wreaked such havoc on Indonesia'€™s and the world'€™s environment were caused by mismanagement of concessions and permits.

'€œThe ease of the permit process giving authority to manage natural resources to corporations has resulted in a situation where the size of concessions controlled by companies is well beyond their management capabilities,'€ he said on Monday.

Furthermore, a win by PT BMH would deal a huge blow to the country'€™s law enforcement, according to Zenzi.

'€œForest fires will happen again in 2016 and 2017 and increase in scale because the benefits reaped by companies are above the punishments that they receive,'€ he said.

According to documents from Sinar Mas'€™ paper-producing subsidiary Asia Pulp and Paper (APP) in 2013, PT BMH is on the list of suppliers to APP, with a 250,370 hectare concession in Ogan Komering Ilir. The company obtained its permit in 2004. Based on data from the Walhi, most of the hot spots in the province were on the company'€™s concession.

The ministry recently suspended the license of PT BMH for allegedly causing fires in 2015. Following the suspension, APP said that it had suspended its contract with the firm while investigations remained ongoing.
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