Thousands of hectares of peatland in Indragiri Hilir regency, Riau, are under threat by the advance of palm oil company PT Setia Agrindo Lestari (PT SAL), which has begun to clear the area to make way for new plantations.

An indirect subsidiary of palm oil giant First Resources Limited, PT SAL obtained a location permit for the 17,059-hectare property, spread over five villages in Gaung district, from the Indragiri Hilir administration in 2012, a year after former president Susilo Bambang Yudhoyono issued a presidential instruction (Inpres) banning the issuance of new permits to clear primary forests or peatlands.

The forest moratorium, which was extended in 2013, mandates the protection of primary forests and peatlands.

When Perspektif Baru Foundation and Kemitraan invited journalists from media companies, including The Jakarta Post, to visit a part of the PT SAL concession in Pungkat village last Wednesday, a new trench was opened by the company workers. The trench passes through the cleared area, which is the size of several soccer fields.

By siphoning vegetation felled by the land clearing toward the village, the trenches have caused water supplies have become polluted, locals say.

'€œThe water has been murky for the past few days. We are lucky this is the rainy season, so we can still gather rainwater. I can'€™t imagine how we will survive during the dry season,'€ said Masniar, a Pungkat resident.

The village has depended on water from the peatland areas during the dry season since 1974.

Widely renowned for their boat-building skills, villagers also source wood from the peatland forest.The community has begun to worry about the future. Last year, 21 residents were jailed for burning nine excavators belonging to
the company.

In its 2014 financial report, First Resources Limited, which is publicly listed in Singapore, stated it held a 46.7 percent stake in PT SAL.

Riko Kurniawan from the Riau chapter of the NGO Indonesian Forum fot the Environment (Walhi) said many palm oil companies still disregarded the forest moratorium, since it carried no punishment for violators.

He said that was why President Joko '€œJokowi'€ Widodo needed to issue a presidential regulation (Perpres) rather than an Inpres as in previous regulations, in order to strengthen the moratorium and apply sanctions on lawbreakers.

'€œPalm oil companies easily get away with getting new licenses, as the moratorium carries no legal consequences,'€ said Riko.

Deserted: A cleared peat swamp area in Pungkat village. JP/Adisti Sukma Sawitri

In the permit documents PT SAL obtained from the Indragiri Hilir administration, the peatlands in the company concession was characterized as '€œcritical land'€, a term which usually used for deserted area. In fact, the area consists of lush peat forest that has local residents have utilized to sustain their livelihoods.

The peatlands are also prone to fires, particularly if the company utilizes the customary slash-and-burn practice to clear the land for plantations.

Riko said that trenches were commonly found in peatlands to drain them before they are dried and left to burn. Before planting the palms, companies usually opt for the burning method to reduce acidity of the pealands, which is the cheapest method.

Aside from the forest moratorium, peatlands are also protected by Government Regulation No. 71/2014 on peatland ecosystem protection and management. The regulation outlines the sanctions on companies that convert peatland into other uses at a depth of three meters or more.

Indragiri Hilir Regent HM Wardan said he had been the reviewing the licenses held by PT SAL, which were issued by his predecessor, Indra Mukhlis Adnan. The regency administration has ordered the company to halt its operations since May last year.

Thomas, a PT SAL public relations officer, said the company'€™s concession had been registered as areas for other use (APL) when the company first applied for the permit, making it available for conversion.

He said the company has continued working despite the local administration order, because it insists it has obtained its permits in accordance with established procedures.

'€œWe have opened peat swamp forests in other regencies in Riau, so this is not the first time for us,'€ said Thomas. The other regencies, he said, included Kampar, Rokan Hulu, Bengkalis and Siak.

Thomas also denied that the company was preparing to drain the peatlands, saying the trenches had been built keep water in the area '€” a method known as '€œcanal blocking'€.

The Environment and Forestry Ministry'€™s deputy for environmental damage control and climate change, Arief Yuwono, said that palm oil companies should comply with regulations.

'€œThere is a clear regulation [in the forest moratorium] that there should not be new permits on peatlands,'€ he said.

Arief added that forestry regulations should not be taken lightly. He said companies and local administrations could use other regulations on the books since the moratorium imposed no sanctions.

Regarding the utilization of peatlands, he suggested that all parties refer to the PP 71/2014.