A palm oil firm hit by mass permit revocation continues to clear forests in Indonesia

PT Permata Nusa Mandiri was among 137 palm oil firms whose permits were revoked by the environment ministry early this year, but went on to bulldoze more than 50 hectares of rainforest since then.

A Victoria crowned pigeon sunning
A Victoria crowned pigeon sunning. The bird can be found in the area being cleared by PT Permata Nusa Mandiri. Image: Heather Paul/ Flickr.

A palm oil firm that was among more than 100 companies targeted in a mass cancellation of permits for plantations by Indonesia’s environment ministry on Jan. 6 has bulldozed more than 50 hectares (125 acres) of rainforest since that date. The finding underscores the limits of the policy and raises questions about how far President Joko Widodo’s administration is willing to go to rein in the nation’s chaotic land-use practices.

After lying moribund for more than two years, the company, PT Permata Nusa Mandiri (PNM), sprang into action in the weeks after the revocations were announced, carving a road and several plantation blocks out of its land concession in Jayapura, a district in Papua province.

During a visit to the site in January, Mongabay observed cars, heavy equipment and workers pacing around the newly created road. The company camp, abandoned for the past two years, looked lively again. A truck loaded with drums apparently filled with fuel was parked on site.

The clearance remains ongoing, satellite imagery shows, according to Albert ten Kate, a researcher at Amsterdam-based sustainability consultancy Aidenvironment.

“It is not just a road anymore,” ten Kate wrote in an email. “A lot of plantation blocks are carved out, over an area of a few hundred hectares and there also has been some clear-cutting.”

The company has not informed the provincial government of its resumption of activities, according to Karel Jarangga, the head of the plantation department at the Papua provincial agriculture agency.

“We have received no report that they’re clearing land,” Karel told Mongabay on Jan. 29. “I mean, if there was activity, we would definitely supposed to get information. But so far there’s been nothing.”

A PR official for PNM, Ridwan Syarif Abbas, did not respond to a request for comment.

The environment ministry was one of three central government agencies to announce the mass revocation of permits for development projects on Jan. 6.

Declared as cancelled were forest release permits for 192 logging, plantation, mining or ecotourism companies, including 137 palm oil firms; 36 land ministry permits for plantations, known as right-to-cultivate, or HGU, permits; and 2,078 mining ministry permits for mines.

The move came as part of Widodo’s broader efforts to improve governance of Indonesia’s rainforests and peatlands. Since 2001, Indonesia has lost some 30 million hectares (74 million acres) of tree cover, second only to Brazil during the same period.

In 2015, after catastrophic wildfires burned across Indonesia’s vast peat swamp zones, much of which had been drained and dried for agriculture, Widodo announced a moratorium on the issuance of permits for new oil palm plantations and a review of existing licenses. The policy was finally enacted in 2018, but it was allowed to expire last September despite objections from environmental and Indigenous rights advocates who said it had made little progress toward its stated goal of evaluating permits that had been issued under legally questionable circumstances.

Before January, only a tiny handful of oil palm plantation permits had been annulled by regional governments during the moratorium period, most notably in West Papua province, where officials last year threw out 12 licenses spanning a total of 267,857 hectares (661,889 acres), citing various administrative violations on the part of the companies.

After revoking the 192 permits on Jan. 6, environment minister Siti Nurbaya Bakar trumpeted the huge acreage they covered — 3.13 million hectares (7.73 million acres), an area 43 times the size of Singapore — calling it a “testament to the success” of Widodo’s three-year permit review measure.

But in reality, observers, say, the ministry has not necessarily pried those lands from corporate control.

For one thing, some forestry law experts have said they believe that a company already holding an HGU can still operate, even if the environment ministry revokes its forest release permit.

Some of the companies named by the environment ministry never obtained a HGU, but others — like Permata Nusa Mandiri — have.

Unlike the environment ministry, however, the land ministry has yet to release the names of the companies whose permits it revoked on Jan. 6.

A freedom of information request submitted by Greenpeace to the land ministry on Jan. 17 asking for the names of the companies with cancelled HGU permits has gone unanswered, Kiki Taufik, the head of the NGO’s Indonesian forests campaign, told Mongabay.

Even if some of the 192 companies named by the environment ministry are also on the land ministry’s list, there’s still a massive shortfall, because the 36 companies named by the land ministry hold HGUs spanning just 34,448 hectares (85,123 acres), a fraction of the area covered by the cancelled environment ministry permits.

At the same time, some of the cancelled environment ministry permits cover areas that have already been planted with oil palms.

“As I understand it legally … the revocation has no effect on areas that are already developed, when companies at least have a HGU,” said ten Kate, the Aidenvironment researcher. “But companies can forget about getting HGUs for new areas within the boundaries of the revoked forestland release permits.”

HGUs aside, observers have also questioned whether the environment ministry has the authority to revoke a forest release permit.

In Indonesia, if a proposed oil palm plantation site overlaps with Indonesia’s vast “forest zone,” the environment ministry must agree to “release” the area before the project can proceed.

While the ministry has referred to these rezoning agreements as permits that can be revoked, some observers have questioned whether doing so is legally valid.

According to Petrus Gunarso, a member of the Indonesian Forestry Scholars Association who has worked in the corporate and nonprofit sectors, forest release approvals are “legally dead,” meaning they cannot be withdrawn after the fact.

“If the release has already been issued, the decree on the release is dead and the authority has moved,” he was quoted as saying by the daily Kompas on Jan. 12. “Therefore, it is not appropriate to revoke the permit, especially on land that is still operating and productive.”

District administrations in West Papua have already been hit with lawsuits over the permits revoked last year, though judges in December upheld the cancellations in one of the cases.

As stakeholders wade through the legal morass, environmental advocates fear the Widodo administration may backtrack on the permit revocations.

At a recent parliamentary hearing in Jakarta, Siti, the environment minister, told lawmakers that the list of 192 companies released in January was merely “declarative” and that another, “definitive” version would be published. The ministry, she said, would set up a “verification/clarification desk” where companies could take issue with their permits being revoked.

“The review of permits under the three-year Palm Oil Moratorium was supposed to culminate in permit revocations where appropriate,” Greenpeace’s Kiki wrote in a message to Mongabay.

“Unfortunately we fear the government is backing down, which will result in this policy failing to improve forest protection and governance, including law enforcement.

“Licence revocation must be implemented transparently, and must include a stop to land clearing activities in the field. We must avoid any chance of ‘flirting’” — main mata in Indonesian — “between the government and rogue business interests and a return to business as usual.”

Birds and shadows

Even before the environment ministry cancelled its permit in January, Permata Nusa Mandiri had been cited as an example of Jakarta’s patchy enforcement of the palm oil licensing freeze.

PNM got its HGU in November 2018, two months after Widodo signed the moratorium into force. The land ministry did not respond to questions from Mongabay on this matter.

Since then, the concession in Jayapura has lain mostly dormant — PNM cleared a patch of forest in 2019, then stopped suddenly — until last month, when it restarted operations in the wake of the mass revocations.

The firm presumably risked losing its rights to the project under the 2014 Plantation Law, which says that any company failing to develop 30 per cent of its concession within three years can have the land deemed as “abandoned,” seized by the state and given to another company. A 2020 law changed that requirement from three years to two.

PNM is currently clearing land in the Jalan Korea area, a popular bird-watching and tourism destination.

Alex Waisimon, a prominent conservationist who runs bird-watching tours out of Jayapura, told Mongabay that the area should never have been handed over to a palm oil company.

PNM’s environmental impact assessment, he said, had been shoddily done, as it failed to mention that the area is a habitat for a range of endemic bird species. The assessment is a required step in the permit process for plantations.

The company has also met with opposition from local Indigenous communities.

“I do not accept this company,” Abner Tecuari, the head of the Tecuari clan, whose ancestral lands overlap with PNM’s concession, told Mongabay.

PNM is majority-owned by Darjanto Widjaja, an executive at the Jakarta-based Indogunta Group, corporate records show.

Watchdogs say Indogunta appears to be controlled in turn by the Salim Group, a major palm oil conglomerate that has pledged to stop clearing forest, in a so-called “shadow company” arrangement.

“The international brands and banks that do business with the Salim Group must immediately investigate the connections between PT. Permata Nusa Mandiri (PMN) and the Salim Group and ensure that the Salim Group is adhering to ‘No Deforestation’ commitments across their entire operations,” Robin Averbeck, forest program director for the Rainforest Action Network, wrote in an email.

“Any palm oil company that persists in destroying rainforests must be excluded from global supply chains and financial portfolios, effective immediately.”

Mark Wakeford, CEO and executive director at Indofood Agri Resources, an arm of the Salim Group, did not reply to a request for comment.

This story was published with permission from Mongabay.com.

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