Pulp and paper giant challenges Indonesian government over peat protection obligation

A company owned by the billionaire Tanoto family of Indonesia is seeking to overturn a government decision to invalidate its plans to operate on peatlands.

pat forest indonesia
The Indonesian government recently rezoned some areas within PT Riau Andalan Pulp and Paper’s concession for conservation, but the company argues it should be allowed to keep operating on them for now. Image: Ruanda Agung Sugardiman/AusAID,CC BY-SA 2.0, via Wikimedia Commons

A subsidiary of Indonesia’s second-largest pulp and paper firm is seeking to overturn a government decision to nix the company’s plans to operate on peatlands.

PT Riau Andalan Pulp and Paper (RAPP) on Nov. 16 asked a Jakarta court to repeal a letter from the Ministry of Environment and Forestry that voided its work plans.

RAPP is a subsidiary of paper giant APRIL, itself a part of the Royal Golden Eagle conglomerate, owned by Indonesian billionaire Sukanto Tanoto.

A plantation company’s work plans explain where it intends to operate in the coming years, and must be approved by the state. RAPP claims its original work plans should remain valid until they expire.

“By invalidating the work plans which serve as a basis for RAPP’s operation, the company no longer has legal certainty,” RAPP lawyer Heru Widodo told reporters after a hearing of the case in Jakarta.

The challenge signals a new phase in the dispute between RAPP and President Joko “Jokowi” Widodo’s administration. The parties have clashed over how to manage the huge swaths of land RAPP has been licensed to manage across the archipelago.

The firm’s plantations overlap with one of Indonesia’s deepest peat-swamp landscapes, the Kampar Peninsula in Sumatra.

The work plans were invalidated in the wake of the 2015 fire and haze crisis, stoked in large part by the drainage of Indonesia’s vast peat swamps — rendering them highly flammable — by companies like APRIL and its main competitor, Asia Pulp & Paper, as well as palm oil firms.

Smoke from the fires sickened half a million Indonesians, per government estimates, and drifted into neighboring countries. At the height of the disaster, the daily emissions of carbon dioxide as a result of the burning exceeded those from all U.S. economic activity.

By invalidating the work plans which serve as a basis for RAPP’s operation, the company no longer has legal certainty.

Heru Widodo, lawyer, PT Riau Andalan Pulp and Paper

To prevent another disaster, the Jokowi administration changed the rules governing peatland management. Under the reforms, more peatlands would have to be conserved, including areas that had already been licensed out to companies like RAPP.

In 2016, President Jokowi issued his signature piece of anti-haze legislation, an amendment to an earlier regulation from 2014. RAPP is suing the government under the 2014 decree.

The 2016 decree stipulates the conservation of at least 30 percent of all peat domes — landscapes where the peat is so deep that the center is topographically higher than the edges. The regulation also mandates the conservation of areas where the peat is deeper than 3 meters (9.8 feet) and which contain high biodiversity.

Last May, the environment ministry asked companies to revise their work plans so that areas it had rezoned for conservation under the new rules would be taken out of contention for development and rewetted to prevent fires.

RAPP refused to follow the ministry’s orders, arguing that doing so would severely affect its production and force it to lay off thousands of workers. The company insisted it should be allowed to operate in the rezoned areas until the expiration of its existing work plans in 2019.

In October, the ministry invalidated RAPP’s work plans and ordered it to submit new ones by the end of that month. The company responded by freezing its operations and furloughing 4,600 workers, many of whom joined a demonstration outside the office of the governor of Riau province in Sumatra that month.

During a meeting on Oct. 24, the ministry explained to RAPP that it had merely been asked to revise its work plans and stop planting in newly protected areas, not cease operations entirely. After that, the company resumed operations and, at a joint press conference with ministry officials, appeared to concede to the ministry’s demands.

But although RAPP agreed to submit new work plans, it continues to hold out against the new peat regulation by trying to revive its old work plans through the court, according to Bambang Hendroyono, the ministry’s secretary-general.

“The petitioner is avoiding its legal obligation to protect peat ecosystems,” he told a panel of judges during the hearing.

Bambang added that while RAPP had submitted new work plans on Oct. 30, the company still planned to operate in the rezoned areas. That prompted the ministry to send a letter to RAPP on Nov. 17, asking it to submit another revision by the end of the year.

“They have included plans to recover peatland in their concessions but they are still trying to replant in conservation areas” in the new work plans, he told reporters after the hearing.

As of Monday last week, RAPP had yet to respond to the ministry’s order, Bambang said. He added he thought the company had misunderstood its obligations under the new rules.

“They want things to be business as usual even though our regulation clearly mandates peat protection,” he said.

By defying the ministry’s orders, he added, RAPP was only delaying the inevitable. If the company wants legal certainty, “they should obey soon.”

Heru, the RAPP lawyer, said the company never intended to defy the ministry or the new regulations.

“We’re not trying to rebel against the government,” he said. “We’re only taking legal action, which is our constitutional right, and we will respect whatever the court decides.”

Correction (Dec. 7, 2017, 00:14 EST): The original version of this story incorrectly stated that RAPP was suing the Indonesian government. In fact it has applied for a court revocation of the government’s decision to void its work plans. We have corrected this and we regret the error.


This story was published with permission from Mongabay.com. Read the full story.

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