Politically connected firm seeks to profit as Indonesian government cuts down orangutan habitat

The Gecko Project| 14 October 2021

Politically connected firm seeks to profit as Indonesian government cuts down orangutan habitat
  • By August 2021, the Ministry of Defence had cut down hundreds of hectares of rainforest in Gunung Mas, a district in Indonesian Borneo. Photo: Tempo/Save Our Borneo.
    The Indonesian government has stripped back rules protecting the environment to expedite a plan to ramp up food production through a “food estate” programme.
  • A firm run by allies of the Minister of Defence has positioned itself to profit from the programme and is seeking $2 billion in investment.
  • Analysts say numerous rules have been broken and there are huge conflicts of interest at play, as the government sets its sights on the forests of Papua.

This article is the result of a collaborative investigation with Tempo.

When the Indonesian government announced ambitious plans to ramp up domestic food production as the pandemic set in last June, officials claimed that it would not lead to “environmental destruction”.

Instead, as COVID-19 threw the world’s supply chains into disarray, officials would ward off the threat of an impending food crisis by boosting crop yields and promoting modern, environmentally sensitive farming techniques.

But within five months, workers acting under the instructions of the Ministry of Defence had fired up their chainsaws to cut down orangutan habitat in Borneo and replace it with a giant plantation.

The story behind this plantation reveals how the ministry has exploited regulations that were drafted hastily during the pandemic, stripping away environmental safeguards and opening up vast new areas of land for agriculture.

An investigation by The Gecko Project and Tempo discovered that the ministry moved so fast that it failed to comply even with these scaled-back rules, potentially illegally clearing hundreds of hectares of rainforest.

The plantation in Borneo, which could take over 32,000 hectares of land that for now is still mostly rainforest, represents just a fraction of the ministry’s ambitions. After Defence Minister Prabowo Subianto was handed a central role in the “food estate” programme, his officials drew up plans to plant more than one million hectares of cassava, a root vegetable, across the country.

The investigation also discovered evidence that the Ministry of Defence is attempting to steer food estate projects, which are potentially worth billions of dollars, to a company with no discernible track record in developing plantations. The company, PT Agro Industri Nasional, or Agrinas, is staffed by individuals from Prabowo’s inner circle.

Agrinas is owned by a non-profit foundation also controlled by Prabowo, with the support of a string of retired and serving top-ranking military officers. Analysts have questioned whether the ownership structure is legal, because it appears to violate rules that are meant to ensure such foundations serve charitable purposes.

They also say Prabowo’s close relationships with Agrinas’s executives and board members generate serious conflicts of interest.

Agrinas and the Ministry of Defence deny partnering on the food estate programme. Despite these denials, we found that Agrinas has sought $2 billion in investment from a foreign government by referencing its privileged access to the programme and connections to Prabowo.

Our investigation also found that the defence ministry is now moving ahead with its plan to develop further plantations in Papua, a biodiversity hotspot in the east of the country that holds part of the largest tract of intact rainforest in Asia.

The ministry’s efforts there are being led by a retired naval officer, who says the labour on plantations will be provided by young Papuans recruited into a newly-formed reserve military corps. Soldiers have already been deployed in support of the programme in Borneo.

The involvement of the military in Papua raises serious concerns, critics say, because the military has a track record of committing human rights abuses against the region’s indigenous population in the interests of advancing natural resource extraction and plantation projects.

The ministry has already presented plans to plant rice and cassava on thousands of hectares of forest and indigenous land in Merauke, a highly militarised district in the furthest eastern reaches of the country. But it has failed to share these plans with the people that they most affect. Local Papuan communities, whose legal rights have been eroded by the new regulations, remain in the dark.

President Joko Widodo, known as Jokowi, launched Indonesia’s food estate program on the back of warnings of an impending global food crisis as a result of the COVID-19 pandemic.

The spread of the virus could be “catastrophic” for millions of people across the world living on the cusp of hunger, the chief economist at the World Food Programme said in April 2020.

UN bodies asserted that the problem was not how much food was being produced. Rather, the danger was that food might not get to where it was needed, as supply chains were gummed up by border restrictions and workers were forced to stay at home, and it could become too expensive for families hit hard by the economic slowdown.

But reducing Indonesia’s reliance on food imports by producing more domestically is a perennial obsession of the nation’s political class, one that arose as a topic of debate in the last two presidential elections. Jokowi instructed his ministers to deliver on this ambition and address the impending pandemic-driven crisis by growing more staple foods such as rice.



The licensing process for agricultural plantations was lengthy. Companies were required to get approval from numerous government agencies, consult with local communities and carry out environmental impact assessments. Large areas of land and forest were off-limits to agriculture, to protect watersheds and maintain forest cover.

Officials in the capital, Jakarta, got to work designing regulations that would cut through the bureaucracy. As the new rules began to emerge, observers suspected the government was prioritising speed over legal principles and the environment.

For Adrianus Eryan, a legal researcher at the Indonesian Center for Environmental Law, or ICEL, the first sign was an environment ministry “operational plan” that he found online in mid-2020. The document outlined plans to turn vast swathes of land in four provinces into “food estates”.

Normally, Adrianus said, such guidance would come after regulations were released. There was no legal basis to enact the changes the ministry had laid out. “This was a bit strange, because it was backwards,” he added.

When the first food estate regulation was enacted in October 2020, it revealed the potential scale of the changes. The new regulation handed the government the ability to use potentially millions of hectares of land previously unavailable for food plantations, including areas designated as protected forests.

The regulation allowed the government to implement these changes with few checks and balances. It demanded a suite of documents, including management plans and environmental permits. But most of these can be produced after land is opened up. Rezoning areas for the food estate only requires a “commitment” to complete them.

The principal requirement is for officials to carry out a strategic environmental assessment, known by its Indonesian acronym as KLHS. The assessments are lengthy analyses that involve extensive public consultation and are used to inform long-term planning.

But the regulation also allows for a “rapid” KLHS, a format that was developed for use in emergency situations. This format relies on the judgement of experts over empirical evidence, according to an ICEL analysis. ICEL found that rapid KLHS “tend to be speculative and leave a lot of room for uncertainty”, and questioned the justification for their use in the food estate programme.

Walhi, a national green group, called the rapid assessment “baseless” and urged the ministry to repeal the entire regulation. This July, the regulation was updated, but there were few substantive changes.

Yeka Hendra Fatika, a member of the national Ombudsman, which monitors how the government delivers public services, said that even a year after the programme was announced it remained unclear who was running it and how it would be financed. The lack of formal planning created the “potential for maladministration”, he added.

Within two months of the first food estate regulation being issued, the fears of a global food crisis had waned, according to a World Bank analysis published in December 2020. Countries had started exporting crops again and the trade in most staple foods was expected to increase for the first time in four years.

The problems for poor Indonesian families, according to the World Bank, were high food prices, caused by a range of issues including processing and transport costs, and limited access to nutritious foods like fruit and vegetables. The food estate programme, which principally targeted production of rice and cassava, would not directly address either problem.

“The structural problems can’t be solved by large-scale land clearing,” said Bhima Yudhistira, an economist and director of the Center of Economic and Law Studies.

In its December 2020 analysis, the World Bank cautioned that the success of the food estate would depend, in part, on “the management of environmental and social risks”. By then, however, the government had begun to cut back the social and environmental safeguards that might slow it down.

In an interview this September, Moeldoko, Jokowi’s chief of staff, said the legislative process was justified by the urgency of the “food crisis”.

“We are racing against time,” he told us. “If the intention is to serve the people, the safety of the people is the highest law.”
plans to intensify rice production in a region of peat swamps in the south of Borneo. Critics noted quickly that it revived a notoriously disastrous plan in the same location, two decades earlier, that had led to the swamps being drained, generating vast greenhouse gas emissions but very little rice.

The Ministry of Environment and Forestry was keen to allay concerns that the new programme would also result in environmental damage. It would instead focus on the rehabilitation of protected areas that had been illegally deforested, as well as agroforestry, which weaves crops through forests without clearing them.

“Another key concern for us is to ensure that no Bornean orangutan habitat is targeted,” said Siti Nurbaya, the environment and forestry minister.

But president Jokowi had also handed responsibility for the programme to his Minister of Defence and former election rival, Prabowo Subianto. In the same month that Jokowi toured the peatlands in southern Borneo, military officers and defence ministry officials were meeting with the local government 150 kilometres north, in a district called Gunung Mas.

There, indigenous Dayak communities live along broad rivers that meander south from the mountains in the centre of the island, through rainforests and on to the Java Sea. The ministry set its sights on a stretch of wilderness east of the Kahayan River, where locals gather food, rubber and wood.

“It’s all wrong. The community is pushing us for answers”

In interviews with our reporters, village leaders recounted meetings with ministry officials and a senior military officer in July, just one month after the food estate was launched. The visitors from Jakarta had explained their intention to establish a plantation to help secure Indonesia’s food needs. But the details remained vague. The villagers weren’t told where the project would be, or when it would start.

Within a few weeks, Prabowo submitted a request to the environment ministry to establish a food estate nearly half the size of Jakarta, the capital city, in Gunung Mas. At the time, no regulation had yet described what a food estate area was, much less how it could be created.

Overlaying the borders of the proposed site with satellite imagery reveals that the majority was rainforest at the time the proposal was made. According to assessments endorsed by the Indonesian government, most of the area is orangutan habitat.

“At the beginning, they didn’t tell us that it would be as large as 30,000 hectares,” said Mine Yantri, a village head who joined the meetings in July. “We couldn’t really oppose a government programme.”

The clearing began in mid-November, when the food estate regulation was just three weeks old.

Though they had been involved in some early meetings, the communities living in nearby villages still had little information. Sigo, an indigenous leader from Tewai Baru village, was on a routine trip to gather wood when he found his path blocked by soldiers guarding the land. Villagers began accusing community leaders like Sigo of selling off their land behind their backs.

“It’s all wrong,” Sigo said. “The community is pushing us for answers.”

The defence ministry did not hold its first public consultation for a strategic environmental assessment — required to rezone the land — until February, three months later. By that point, more than 600 hectares had already been cleared.

A presentation given to a parliamentary hearing in March 2021 indicated that the ministry had still not yet met the conditions needed to rezone the land. The land was categorised as ‘permanent production forest’. Under a long-standing principle of Indonesian forestry law, such areas cannot be converted to agricultural plantations.

Adrianus, from ICEL, said the sequence of events indicated that there was “likely a violation” of the law. “With this food estate there have been many safeguards ignored,” he added. “The KLHS was ignored, the community was not involved, the process was designed behind closed doors.”

The Ministry of Defence told us it had started land clearing by making use of a 2018 regulation that allows, in emergencies, the “borrowing” of land zoned for other uses without changing its status. It said they had then “made adjustments” when the 2020 food estate regulation was enacted. The clearing was “based on instructions from Jokowi during a cabinet meeting.”

“The process was designed behind closed doors”

When our reporter visited the site this August it was guarded by soldiers. Moeldoko, Jokowi’s chief of staff, told us the use of active duty soldiers was justified by the 2004 National Army law.

That law requires approval from the national parliament for their deployment, but we could find no record it had been given. Two security analysts told us the deployment was likely a violation of the law.

Despite the large amount of forest already cleared, by August this year only around 30 hectares of cassava had been planted. Our reporter found stalks that were wilted and yellow. Many appeared to have died.

Prabowo’s ambition is to plant more than a million hectares of cassava, using the root vegetable as a substitute for wheat as part of efforts to reduce Indonesia’s reliance on imports. The defence ministry also believes the crop can be used for a range of other products unrelated to food, from biofuels to pharmaceuticals.

But cassava plantations are not easy to establish, according to Reinhardt Howeler, a scientist who spent decades researching the crop. Smallholders produce most of the world’s supply, he said, and most plantations larger than a few hundred hectares are so labour-intensive that they are not economical. A 32,000 hectare cassava plantation would be the largest Howeler has heard of by a factor of at least five.

Professor Achmad Subagio, a cassava expert who was working on the ministry’s project in Gunung Mas but hadn’t visited the site since February, said that cassava requires intensive care for four months after planting. “If there is no maintenance fund, they will be skinny for sure,” he added.

In its haste, the ministry had cleared the rainforest before it had the budget to establish its plantation. Almost a year after it started cutting trees, it said it was “still waiting for the regulatory process and the budget” for the programme.

Read the full report by The Gecko Project here









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