Monday, August 29, 2016

APP concession condemned for forest fires

The government required companies to restore the plantation land that has been burned in Autumn 2015. Great parts of three APP pulpwood concessions in South Sumatra were very seriously affected by these peat fires. In August this year, the High Court of Palembang (South Sumatra) declared that PT BMH (an other APP supplier) had committed an unlawful act with respect to peat fires in 2014.Sinarmas concessions in South Sumatra are key suppliers for the new huge APP mill that will start its operation by the end of the year in the OKI regency. The High Court of Palembang announced a ruling on August 12 which overturned the decision of the District Court of Palembang from the end of December last year. The previous ruling had found in favor of PT Bumi Mekar Hijau (BMH) in a civil suit in which it was sued for IDR 7.98 trillion (the equivalent of USD 614.35 million at the approximate current exchange rate of IDR 13,000) by the Indonesian Minister of the Environment and Forestry. This decision by the high court comes after the Environment and Forestry Minister appealed the lower court’s ruling. The new ruling states that PT BMH did indeed commit an unlawful act with respect to the peat fires that occurred in its concession in 2014. However, the high court decision has resulted in a lesser punishment than that originally demanded, ordering PT BMH to pay just IDR 78.5 billion in compensation (the equivalent of USD 6.04 million at the approximate current exchange rate of IDR 13,000). Based on a number of legal documents submitted to the Environment and Forestry Ministry by PT BMH itself, which were later validated by the ministry, the company is a subsidiary of the Sinarmas Forestry group. PT BMH is actually one of several pulpwood plantation companies operating in South Sumatra that fall under the umbrella of Sinarmas Forestry. “At the very least, the decision of the Palembang High Court is appreciated because it declares that PT BMH did commit an unlawful act related to forest fires," said Hadi Jatmiko, Executive Director of WALHI (Friends of the Earth Indonesia) South Sumatra, in a press release received by At the same time, however, WALHI also expressed its disappointment with the high court ruling in that PT BMH has been ordered to compensate only about 1 percent of the total amount for which it was originally sued by the minister. Hadi lamented that this slap on the wrist in the form of a relatively small fine would not make other companies wary of perpetrating similarly illegal acts. “In our opinion, the high court decision is insufficient in acting as a deterrent.” In light of this, WALHI is urging the minister to impose administrative sanctions on the Sinarmas Forestry company, specifically by revoking its permit. WALHI feels that such a punishment is justified, given that in 2014 and 2015 peat fires in the PT BMH concession destroyed as much as 160,000 hectares, more than twice the size of Singapore. Last year, PT BMH continued to contribute to the vast haze that enshrouded the region as a result of peat fires in its concession located in the regency of Ogan Komering Ilir (OKI) in South Sumatra province. Due to these peat fires in its concession, the minister suspended the operating permit of PT BMH. This decision seemed justified in light of a report by Greenomics Indonesia which laid bare the sheer magnitude of the 2015 peat fires in this concession.