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Jakarta Post

RI steps up audits of oil palm companies

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Thu, August 28, 2014   /  08:59 am

Indonesia'€™s latest tactic for slowing the world'€™s fastest rate of deforestation is to crack down on the licensing of companies that have concessions for agriculture on peatlands and rain forests.

The agency for Reducing Emissions from Deforestation and Forest Degradation (REDD+) is auditing 18 companies to check for proper licensing, Heru Prasetyo, head of the REDD+ office in Jakarta, said in an interview with Bloomberg. The country'€™s laws and the way they are enforced need to be changed, said Prasetyo.

'€œAfter we review the licenses, we register them and we start doing the dirty things like revoking the licenses,'€ Prasetyo said on Aug. 18. '€œThree companies are being prosecuted,'€ he added, declining to identify them.

A lack of central government oversight and corruption in licensing, traditionally done at the local level, contributed to the illegal burning of Indonesia'€™s peatlands and forests. The Environment Ministry is separately investigating 29 cases this year against 26 companies accused of using fires to clear land in Riau, a national center for oil palm, pulp and paper production, it said on Aug. 6. Only seven criminal cases involving forest fires were filed in 2013.

The audits come after Singapore passed a bill last month on trans-boundary haze to fine companies proven to engage, authorize or condone acts that contribute to haze. The city-state endured its worst-ever air quality last year.

Joko '€œJokowi'€ Widodo, who takes over as president of Indonesia in October after winning 53 percent of the vote in July, has said the lack of a single national forestry map results in overlapping permits. There may be about 1,000 mid-sized oil palm companies below the radar of international organizations, while nearly a third of local regents are being tried for alleged graft, Prasetyo said.

'€œThe track record of Indonesia in terms of law enforcement is not good,'€ Prasetyo said. '€œThe condition of our forests is not pretty.'€

Indonesia lost more than 6 million hectares of its primary forest, an area the size of England, from 2000 to 2012. The deforestation rate surpassed that of Brazil, scientists including Belinda Arunarwati Margono and Fred Stolle wrote in Nature Climate Change on June 29.

Indonesian companies can be put on trial if they fail to participate with mandatory environmental assessments, or use bribery to win licenses, said Prasetyo.

Indonesia, estimated to be the world'€™s largest emitter of greenhouse gases after China and the US because of deforestation, has imposed a moratorium on new permits to develop peat lands and primary forests. The ban, set to expire in May 2015, is part of an agreement to procure US$1 billion in aid from Norway.

Sonny Keraf, Indonesia'€™s environment minister from 1999 to 2001 and adviser to Jokowi, said last month that Jokowi planned to continue the moratorium. The president-elect also wants to deploy a network of drones to help monitor and stop land misuse across the archipelago of 17,000 islands.

'€œThe pressure that we have now is not to end the moratorium by a certain year, but only under certain conditions,'€ Prasetyo said. '€œWhen governance is already established and regulations are already set, then we can say the moratorium is over and you can apply for licenses using the new governance processes.'€

  • A lack of control contributed to illegal burning of peat lands and forests
  • The environment ministry is investigating 29 cases this year against 26 companies

Meanwhile, Central Kalimantan Governor Teras Narang said his administration had introduced a monitoring system that would provide transparent information about palm oil companies and their activities in the region.

Teras met with number of stakeholders in the palm oil industry in order to promote sustainable production and unveil the monitoring system. Together they agreed to establish a forum to resolve the issues plaguing the industry, including the issue of overlapping concessions.

'€œWe hope that Central Kalimantan'€™s initiative will be useful for the development of the Indonesian palm oil industry. We aim to become a pioneer in developing sustainable oil palm plantations,'€ Teras told The Jakarta Post during a press conference in South Jakarta on Monday.

Teras said that the monitoring system allowed for strict oversight measures, including the management of permits and the productivity of individual plantations.

According to the governor, there are currently 87 productive companies out of a total of 96 legitimate businesses tending to 1.067 million hectares of land for oil palm plantations in the province.

Teras also said that some firms were already producing the commodity, albeit not to their maximum capacity. '€œWe'€™d like for those [companies] with concessions to maximize their efforts. We want people to refer to Kalimantan palm oil, whether RSPO [Roundtable on Sustainable Palm Oil] or ISPO [Indonesian Sustainable Palm Oil] graded, as safe or lawful. That'€™s our goal,'€ the governor said.

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