GAR s claim of victimhood is baseless

Transcription

1 GAR s claim of victimhood is baseless October 2011 What about the forest cleared illegally in GAR concessions? What about the invasion of conservation areas by GAR concessions? Background This report is intended to set out Greenomics Indonesia s response to the statement by Golden Agri Resources Ltd (GAR/Sinar Mas palm oil business group), which appeared in The Straits Times in September. This response needs to be highlighted, together with the discovery of documents by Greenomics stating that a number of palm concession blocks of GAR are located in permanent conservation and production forests in South Kalimantan Province. This is highly relevant bearing in mind that GAR always claims that not one hectare of its concessions are located in forest areas. The question is as follows: Given GAR s continuing dodging of the facts in the case of Central Kalimantan, now that it has already been legally shown that GAR has concession blocks located in conservation forests in South Kalimantan, will GAR continue to duck and dodge its responsibilities? In this report, we reiterate the legal facts so as to answer whether GAR has be truly fallen victim to licensing conflicts in respect of its palm concessions in Central Kalimantan Province. This report also raises the issue of the invasion by GAR palm concessions into conservation areas and logging/forestry plantation concessions in South Kalimantan, which would clearly be illegal.

2 Response to GAR s Statement in The Straits Times Power struggle over land use, is the title of an article that appeared in The Straits Times on 16 September 2011, precisely around the time of the revocation of Nestle s boycott on the purchase of CPO from GAR companies. In response to a Greenomics report titled GAR Sustainability Report Presents Misleading Picture of Company s Conservation Policy (22 June 2011), the essence of which was correctly summed up by The Straits Times in paragraph two and three of the article, the newspaper carried the following quotation from GAR: A GAR spokesman told The Straits Times recently that the report was "not based on complete information". Even more pointed was the statement quoted by The Straits Times in the fifth paragraph of the article: A brief look at the history of palm oil regulation in the province is certainly enlightening. What Greenomics did not say was that the company had become the victim of a power struggle between the central and provincial governments over the conversion of forest land for other uses. After reading The Straits Times article, for its part Greenomics concluded that GAR had provided The Straits Times with incomplete and misleading information for unclear reasons, claiming that its chronology and version were the correct ones. In fact, the government has already conducted an integrated study on the said chronology, which has also been investigated by the State Audit Board (BPK). In its comments to The Straits Times, GAR has clearly ignored the following important facts: First, a BPK audit report published in February 2009 comprehensively analyzes the chronology of problematic palm plantation licensing in forest areas of Central Kalimantan Province including GAR palm plantation concessions based on the audit standards applied by the BPK, which is Indonesia s state audit institution. The said audit report recommended that palm plantation operations in forest areas including on GAR s concessions be halted so as to avoid further losses to the state and even greater environmental damage. As a consequence, Greenomics does not need to explain the chronology surrounding problematic licensing in our reports. As a civil society organization, Greenomics neither has the competence or authority to arrive at conclusions on licensing issues in Central Kalimantan Province. Thus, we instead relied on the BPK audit report as the principal basis for our analysis. Greenomics only quoted the recommendations from the said audit report. If GAR s spokesman says that the Greenomics report is not based on complete information, this is only because the Greenomics report did not provide a brief look at the history of palm oil regulation in the province is certainly enlightening, as written by The Straits Times. We would accordingly invite GAR to carefully read the BPK audit recommendations, which indeed provides a much more detailed analysis than a mere brief look. It appears that GAR wishes to convince global public opinion that the Greenomics Indonesia report was not based on complete information. 2 2 lorem ipsum :: [Date]

3 Second, the Greenomics report also employed as a basis the Central Kalimantan Province Integrated Research Report on Forest Areas Changes of April 2009, which was conducted pursuant to Article 19 of the Forestry Law 1999 (No. 41 of 1999). In compliance with the Integrated Research report, the Minister of Forestry issued a Decree on 31 May 2011 on changes in the uses and functions of forest areas in Central Kalimantan Province. Legally speaking, the said Decree is required to adhere to the recommendations contained in the Integrated Research report, which runs to some 300 pages (including appendices). Based on the maps attached to the Minister of Forestry s decree, it is clear to be seen that the majority of GAR palm concessions (9 out of 10) are located in forest areas. It needs to be stressed here that the Integrated Research report is comprehensive even more so that the BPK audit report and discusses in detail the question of the licensing of palm concessions in Central Kalimantan Province. It also should be stressed that the team s report was not the result of a run-of-the-mill study, but rather one mandated by the Forestry Law. Consequently, there is no need for Greenomics to go into the details of the licensing problems affecting the palm sector in Central Kalimantan as these are discussed in detail in the Integrated Research report. Thus, if GAR claims to be the victim of a power struggle between the central and provincial governments over the conversion of forest land for other uses as is stated in The Straits Times then GAR should have submitted formal and unequivocal complaints to the Indonesian Government (the team that prepared the Central Kalimantan Province Integrated Research Report on Forest Areas Changes ) and the BPK based on GAR s belief that the Integrated Research report and the BPK s audit report were not based on complete information. Alternatively, GAR could sue the Minister of Forestry, who on 31 May 2011 published a statement to the effect that GAR continues to have concessions in forest areas. Why did GAR not do so? The fact that GAR failed to do so means that it is irrelevant for GAR to allege that the Greenomics report was not based on complete information, bearing in mind that the Greenomics employed the Integrated Research report and the BPK audit report as its principal references. Aliquam dolor. 3 3 lorem ipsum :: [Date]

4 Third, The Straits Times article contains the following statement: What Greenomics did not say was that the company had become the victim of a power struggle between the central and provincial governments over the conversion of forest land for other uses. Of course, Greenomics does not have the competence or authority to make a statement to that effect. However, if we adhere to the BPK audit report, it will be seen that the principal victim is Kalimantan s forests and forest functions. According to the BPK report, the other victims are the state, in the form of taxpayer losses, and the environment, in the form of destruction and degradation. Our question for GAR is this: What is GAR s responsibilities in respect of the timber it acquired through unlicensed land clearing on its concessions, which is worth at least Rp 2.4 trillion (US$270 million)? Is GAR the victim, or the forests and country of Indonesia? This is the essential question that must be answered by GAR. Fourth, the Greenomics report also quoted an announcement by the Ministry of Forestry that appeared in a Jakarta daily newspaper regarding the revocation of preliminary licenses for palm concessions in forest areas, including one GAR concession in Central Kalimantan, and one GAR concession block in Riau Province. If GAR claims that the Greenomics report was not based on complete information, is GAR further insisting that the Ministry of Forestry is also not acting based on complete information by revoking the said GAR concessions? It should be remembered that Greenomics based its conclusions on the Ministry of Forestry s announcement. In the light of the above four reasons, Greenomics also feels it necessary to respond to paragraph 12 of The Straits Times article, which reads as follows: Unlike Greenomics, most environmentalists I spoke to in Jakarta last month expressed sympathy with GAR. Even Greenpeace, which published a major report in July last year denouncing the company's environmental track record, conceded that the confusing legal situation in Central Kalimantan is primarily the result of bad governance. As regards this paragraph, we need to stress that this matter is not one that involves sympathy or support as not only Greenomics, but also Indonesia Corruption Watch (ICW), would like to support GAR s Forest Conservation Policy in principal. However, one of the points in the policy document states that GAR complies with the relevant provisions of the laws and regulations. Once again, we need to reiterate that this is not a question of sympathy for the GAR initiative. For example, is it acceptable to support palm operations in respect of which the concession licenses have been revoked by the Ministry of Forestry? Thus, our question is whether the Minister of Forestry Decree of 31 May 2011 (which stated that the majority of GAR concessions in Central Kalimantan are located in forestland) is regarded by GAR as being irrelevant? And, whether the revocation of palm concession licenses by the Minister of Forestry is also considered by GAR as being irrelevant? In fact, the most recent update on the relevant provisions reveals that the majority of GAR s concessions are located in forest areas. It is based on this that Greenomics and the ICW do not support GAR s Forest Conservation Policy, particularly as regards its operations in Central Kalimantan, which the BPK states are the cause of state and environmental losses. 4 4 lorem ipsum :: [Date]

5 The Greenomics report challenged GAR regarding its statement that it complied with the relevant laws and regulations so as to prove that its Forest Conservation Policy was more than just a collection of empty and misleading statements. Further, does GAR not consider the Integrated Research report (conducted pursuant to Article 19 of the Forestry Law) to be relevant, despite the fact that it found that the majority of concessions are located on forest areas? And that is not all. Does the BPK audit report mean nothing to GAR, even though it was prepared based on the relevant legislation and which stated that GAR palm operations on forestland must be halted so as to prevent further state losses and damages to the environment? While it is true that law enforcement is the responsibility of the Indonesian authorities, it is also true that GAR has stated in its Forest Conservation Policy that it complies with all of the relevant laws and regulations. Greenomics supports that statement that appears in the concluding paragraph of The Straits Times article, which reads as follows: Lauded by many environmental groups for its positive response to criticism of its environmental record, GAR now boasts one of the most comprehensive forest conservation policies in the industry. If they implement it properly, it will be very good indeed, one environmental activist told me. But first, GAR needs to pay compensation for the value of the timber its extracted without authorization, which is worth at least US$270 million. In addition, GAR needs to respond to the revocation of two of its concession licenses by the Minister of Forestry, and to the Minister of Forestry s Decree of 31 May 2011, which stated that almost all of the palm concessions in Central Kalimantan are located on forest areas. Meanwhile, matters concerning criminal offenses will need to be studied based on the recommendations of the BPK and the Integrated Research reports. The four matters above have become the main focus of the Greenomics and ICW campaign aimed at the GAR Forest Conservation Policy. Should all four issues be properly addressed by GAR, environmental groups will have no further cause to not support the GAR Forest Conservation Policy. However, if we confine ourselves to a discussion of sympathy, that is the prerogative of each NGO. It should be remembered that sympathy will do nothing to resolve the state losses that have resulted from GAR palm operations. Once again, we would like to reiterate that the Minister of Forestry has identified the taxpayer losses that have resulted from the unlicensed exploitation of timber in Central Kalimantan Province, including by hundreds of palm plantation concessions, at US$17.81 billion. GAR concessions have contributed to these taxpayer losses. 5

6 The Integrated Research Report prepared pursuant to Article 19 of the Forestry Law 1999 (No. 41 of 1999) on changes in forest areas in South Kalimantan Province (February 2009) shows that five blocks in one GAR concession are operating inside conservation areas with an area of 658 times the size of a soccer pitch. In respect of the operation of palm plantations inside conservation areas, the Integrated Research report states that palm oil concessionaires should be required to pay compensation to the state for the timber lost during land clearing operations in such conservation areas, and that forest tree species be planted among the plantation plants, and that timber royalties be paid in respect of the plantation plants. With regard to GAR s Forest Conservation Policy, a further question arises in respect of the operation of GAR palm concessionaires in conservation forests, namely, does the report of the Integrated Research mean nothing to GAR? Accordingly, the real question is whether it is GAR or conservation forests that are the victims in this particular instance? Is GAR a victim? This is the question that needs to be answered by the GAR spokesman. What is clear is that the Integrated Research report states that the use of forest areas for plantation based on Cultivation Right (HGU) titles or Location Licenses where land clearance has proceeded without the approval of the Minister of Forestry is a violation of Article 50 of the Forestry Law 1999 (No. 41 of 1999). The existence of HGU holders in such circumstances is illegal under the forestry legislation. It is not just the question of incursions by GAR concessions into conservation forests. The Integrated Research report also states that there is overlapping of concession areas with areas that are subject to Timber Exploitation Licenses extending to 1,313 hectares, or the equivalent of 1,313 soccer pitches. Invasion of GAR concessions into conservation areas Given these conditions, the Integrated Research report states that those responsibility for violations (plantation concessionaires) should be required to pay compensation to the state for the timber lost during land clearing operations in such conservation areas, and that forest tree species be planted among the plantation plants, and that timber royalties (PSDH) be paid in respect of the plantation plants. Further, such violations should be prosecuted under Article 78 of the Forestry Law (No. 41 of 1999) or under Article 40 of the Conservation of Biological Resources and Ecosystems Law 1990 (No. 5 of 1990). In respect of the situation in South Kalimantan, does GAR also feel that it is a victim? 6 6 lorem ipsum :: [Date]

7 Conclusion Instead of portraying itself as a victim in the media, what GAR needs to do is to pay compensation to the state for the losses that have resulted from the operations of its palm plantation concessions in forest areas. Such state losses take the form of losses resulting from the felling of timber during the clearing of forest areas, and the failure to comply with other obligations. Even if the GAR palm plantation concessions that are located on forest areas were immediately to be declared no longer located on forest areas, GAR would still have to pay compensation to the state for the loss of timber resulting from the illegal land clearance of forest areas by its palm plantation concessions. It is clear that the real victims are the forests from which this timber was illegally harvested. In addition, the state is also a victim as a result of the loss of revenue that has ensued. What is also clear is that fact that in no way can GAR be considered to be a victim. In conclusion, it is not GAR that is the victim, but rather the forests of Borneo. GAR must pay compensation for this as recommended by the Integrated Research report and as required by the provisions of the laws and regulations in effect. With regard to GAR s palm plantation operations that are located within conservation areas in South Kalimantan, GAR also has an obligation to pay compensation, as well as comply with other obligations. It is clear once again in this case that the real victims here are the forests from which this timber was illegally harvested, rather than GAR. With regard to invasion by GAR palm plantation concessions into logging/forestry plantation concessions in South Kalimantan, GAR is also under an obligation to pay compensation and comply with other obligations. We would once again reiterate that GAR has not been victimized by the licensing overlaps that have taken place. For further information please contact: Elfian Effendi Executive Director of Greenomics Indonesia elfian@greenomics.org 7 7 lorem ipsum :: [Date]

8 Our question for GAR is this: What is GAR s responsibilities in respect of the timber it acquired through unlicensed land clearing on its concessions, which is worth at least US$270 million? Is GAR the victim, or the forests and country of Indonesia? 8 lorem ipsum :: [Date]