Mongabay | 11 September 2023
Court ruling spares Papua forest from further clearing for palm oil
by Hans Nicholas Jong
JAKARTA — An Indonesian court has upheld a government decision to curb the expansion of a multibillion-dollar oil palm plantation project in the country’s easternmost region of Papua.
In its Sept. 9 ruling, the Jakarta State Administrative Court rejected lawsuits filed by two plantation companies that are part of the Tanah Merah mega plantation project, PT Megakarya Jaya Raya (MJR) and PT Kartika Cipta Pratama (KCP).
The project, divided into seven concessions, sits on an immense block of primary forest spanning 280,000 hectares (692,000 acres) of rainforest — an area nearly twice the size of New York City — in the province of South Papua. Earmarked for oil palm plantations, it would be the single largest bloc of oil palms in Indonesia, the world’s top producer of palm oil.
Development has begun on some of the concessions, including those operated by MJR and KCP, which have been linked to Pacific Inter-Link, a holding of the Yemeni-based Hayel Saeed Anam conglomerate.
The two companies had cleared 8,828 hectares (21,814 acres) of rainforest for oil palm plantations, but a government evaluation of both concessions found that the plantations had been left mostly idle, with no reports of production or harvesting carried out yet.
As a result, the Ministry of Environment and Forestry included both MJR and KCP on its list of concessions to be revoked.
The list consisted of nearly 200 corporate entities targeted in a mass cancellation of permits in January 2022. President Joko Widodo announced the mass revocations on the basis that the companies that were awarded the concessions were deemed to be moving too slowly in exploiting natural resources.
When the announcement was made, experts predicted that the government’s decision would lead to lawsuits filed by affected companies. In the case of MJR and KCP, the environment ministry stopped short of revoking the permits for both concessions. Instead, it issued decrees removing the two companies from the 2022 list, and ordered them to stop clearing rainforest.
This allowed both companies to continue cultivating the 8,828 hectares of land that have been cleared, but also required them to preserve the remaining 65,415 hectares (161,644 acres) of rainforest in their concessions.
The two companies were also required to apply for a new permit for environmental-based businesses, like carbon trading, so they could generate a profit from forest conservation.
In March 2023, the companies decided to challenge the ministry’s order by filing suit at the Jakarta court. They argued that the ministry’s decision had harmed their business. MJR said the ministry had overlooked the investment the company had made into developing the plantation, totaling 660 billion rupiah ($43 million).
MJR also said it had every intention of developing the plantation as it was in the process of acquiring a right-to-cultivate permit, or HGU, from the land ministry — the last in a series of licenses that palm oil companies must obtain before being allowed to start planting.
MJR said it submitted its HGU application in December 2020, and that it had paid 1.91 billion rupiah ($124,500) for the demarcating and mapping process. It said all these investments are for the development of palm oil, not for environmental-based businesses like carbon trading. As such, the company said it felt forced to switch its business model from palm oil to carbon trading.
Lastly, MRJ said the environment ministry didn’t have the authority to issue the order as its concession area was zoned as a non-forest area, meaning it falls under the authority of the land ministry.
The environment ministry, in responding to the lawsuit, said its order for the companies to refrain from further forest clearing was a follow-up to the president’s order to review existing concessions across the country. The order is also necessary to reduce deforestation as a part of a greater government effort to turn the country’s forests into a net carbon sink by 2030, it said.
Totok Dwi Diantoro, an environmental law expert from Gadjah Mada University, who testified for the government in the lawsuit, said the environment ministry was well within its authority to order the two companies to halt forest clearing.
Members of the Awyu Indigenous community, who live in a forested area that overlaps with the two companies’ concessions, have thrown their support behind the environment ministry in the case.
Testifying in court on July 11 this year, two Awyu community members explained the importance of their forest for their livelihood and culture. The Awyu forest is home to rare species such as iconic birds-of-paradise as well as many tree species that the community members use for various purposes, such as food, spice, medicine and construction. One example is the Oncosperma tigillarium palm tree, known locally as nibung.
“A nibung tree can have many uses,” Hendrikus Woro said in his testimony. “The inside of its stem can be used for cough syrup. The stem can be used for flooring.”
Fellow Awyu Gergorius Yame said his people rely on the forest as a water source.
“Whenever we go to the forest, we don’t need to bring water because we can just drink from the river,” he said. “We are worried that the oil palm plantations will destroy our river.”
The court ultimately ruled in favor of the environment ministry, reasoning that the ministry had the right to order the two companies to protect the remaining forest in their concession and to switch their business model.
Activists say the court ruling is a win for the environment and Indigenous peoples as it effectively bans the two companies from further clearing forest, and thus has the potential to save 65,415 hectares of pristine rainforest, six times the area of the city of Paris.
“This is the decision we’ve been waiting for,” Gregorius said. “Enough is enough. Companies must stop destroying forests and customary lands. What else do these companies want to do to our customary land? Obey this decision and let us take care of our Indigenous land ourselves.”
But the fight doesn’t end here, as the Awyu people still don’t have formal recognition of their ancestral rights to the forest. The process to get their rights recognized by the government has been slow due to lack of commitment from the local government, according to Tigor Gemdita Hutapea, a member of the legal team for the Awyu community.
This leaves the Awyu people vulnerable to being pushed off their land, he said.
“We’re afraid that the government policy [on the concessions] will change again in the future,” Tigor said. “Until when will the forest conservation policy remain?”
A 2018 investigation by Mongabay and The Gecko Project showed how permits in the Tanah Merah project were issued by an official in jail on corruption charges.
Officials from the Papua provincial investment agency also alleged that permits for the seven concessions in the Tanah Merah project were falsified at a critical stage of the licensing process. While the permits bore the signature of the former head of the agency, he has reported in writing that it was forged. The allegations were uncovered in a follow-up investigation by Mongabay and The Gecko Project.
“Hopefully with this lawsuit, the Ministry of Environment and Forestry will know that the companies have no good intentions, and will immediately revoke permits for PT KCP and PT MJR,” Gergorius said. “Our hope is that we can resume control of our customary forest, so we can manage it for future descendants of the Awyu tribe.”
So even if the environment ministry wants to turn the oil palm concessions into concessions that provide environmental services that can be traded, such as carbon sequestration, the lands should be managed by the Indigenous people there, Tigor said.
“The Awyu are best placed to continue to protect and manage their own forest, and have the right to determine their own livelihoods and future,” said Sekar Banjaran Aji, a forest campaigner at Greenpeace Indonesia.