When Indonesia reclaimed land from developers, it gave them a solid case to sue

The Indonesian government’s decision to revoke permits for plantation firms to operate in forest areas could lead to lawsuits filed by the companies, environmental law experts say.

Burning concession of palm oil company PT Kumai Sentosa in Central Kalimantan province, Indonesia.
Burning concession of palm oil company PT Kumai Sentosa in Central Kalimantan province, Indonesia. Image: Indonesian Ministry of Environment and Forestry.

The Indonesian government has opened itself up to litigation by unilaterally revoking hundreds of permits for logging concessions, plantations and mines, according to environmental law experts.

The revocations were ordered in early January by President Joko Widodo, and include permits issued by the Ministry of Environment and Forestry for 192 logging, plantation, mining and ecotourism operations, totaling 3.13 million hectares (7.73 million acres). The government didn’t cite any environmental justification for the revocations; instead, it accused the concession holders of not moving quickly enough to exploit the resources granted to them.

Regardless of the justification, the government’s one-sided move gives the companies a solid legal standing to sue to get the permits back, said Grita Anindarini, a program director at the Indonesian Center for Environmental Law (ICEL).

“That’s what likely to happen: [the environment ministry] being sued at the state administrative court,” she told Mongabay.

Syahrul Fitra, a forest campaigner at Greenpeace Indonesia, echoed Grita’s view.

“I’m not sure that the companies will just accept [the revocation] just like that,” he told Mongabay.

Grita and Syahrul said the legal challenges to come might be similar to those brought against local governments in Indonesia’s West Papua province.

There, two district heads have been sued by palm oil companies for revoking their permits. A crucial difference between those cases and the presidentially ordered revocation, however, is that the West Papua permits were scrapped on the basis of an audit that found myriad violations committed by the concession holders. That has strengthened the local governments’ legal position, leading to at least three of the lawsuits being dismissed by courts.

‘What does this mean?’

The companies affected by the widespread permit revocations in January haven’t yet indicated whether they will pursue legal challenges to win back their permits

Togar Sitanggang, deputy chairman of GAPKI, the national association of palm oil businesses, said his industry was particularly perplexed by the revocation of what’s known as forest release decrees.

“Of course, we, as businesses, are asking around, what does this mean?” he said during a recent discussion in Jakarta.

Nearly two-thirds of the revoked environment ministry permits, 126 out of 192, are forest release decrees for plantation firms.

In Indonesia, lands are divided into two main categories: “forest area” and “areas for other purposes,” also known as APL. When an area is zoned as “forest area,” it’s usually off-limits to any kind of clearing. Some forest areas are earmarked for “productive” activities, which include growing forest crops, selective logging, and agroforestry — but not oil palm cultivation.

Forest release decrees, issued by the environment ministry, rezone forest areas into APL areas, effectively allowing forests to be cleared for oil palm plantations. Even after it has obtained a forest release decree, a company still needs to acquire a right-to-cultivate permit, or HGU, from the land ministry — the last in a series of licenses that oil palm companies must obtain before being allowed to start planting.

For companies that have obtained both a forest release decree and an HGU permit, the big question posed by the revocation of the former is whether they’re still allowed to operate on the basis of the latter. Environmental law experts say the situation is unprecedented, and that companies thrown into limbo by losing their forest release decrees and not their HGU permits could well sue the environment ministry.

Questions and lack of transparency

Budi Mulianto, chair of the Indonesian Land Science Association (HITI), said the government’s unilateral action had created much confusion, especially in cases where companies have obtained an HGU permit after getting the necessary forest release decree.

In these case, the environment ministry no longer has any authority over the concessions as they’re not located in forest areas, he said. Instead, it’s the land ministry that has jurisdiction. This then raises the question, Budi said, of whether the land ministry will follow up on the revocation of the forest release decrees by rescinding the HGU permits.

Observers say this can only be answered if the land ministry discloses the list of HGU permits revoked as part of the president’s announcement.

But the ministry hasn’t done so. Indeed, it has a long history of withholding information on HGU permits, even though Indonesia’s Supreme Court has ruled that HGU data is public information that should be made available to anyone who wants to access it.

“We don’t know which HGU licenses have been revoked, whether the rescinded forest release decrees are also followed by the revocation of HGU licenses there or not,” said Greenpeace’s Syahrul.

Grita from the center for environmental law said that ideally the HGU permits associated with the revoked forest release decrees would also have been scrapped as part of the president’s announcement. This, she said, would ensure a clean government takeover of the concessions so that they can be redistributed to local communities.

The government has said some of the revoked concessions will be given to local communities to manage, as a part of wider efforts to reduce inequalities in land ownership in the country.

Much of Indonesia’s land has been parceled out to companies, often at the expense of Indigenous peoples and local farmers. The wide gulf in land ownership means just 1% of Indonesians control more than half of the land, including forested areas that have been cleared to make way for pulpwood plantations and oil palm estates, among other commercial activity.

However, even if the HGU licenses ended up not being rescinded, the fact that the forest release decrees have been revoked should be enough for the government to take over the concessions, Grita said.

A 2015 Constitutional Court ruling states that plantations must have both land rights and plantation permits in order to operate. Before then, the plantation law stipulated that plantations only needed either land rights or plantation permits, not both.

Grita said this means companies need to have all permits in order to operate, including the forest release decrees if the concessions are located in former forest areas.

“If plantations are located in areas for other purposes, or APL, which used to be forest areas, then they need to have HGU, plantation permits and forest release decrees,” she said. “If one is missing, then they can’t operate.”

Petrus Gunarso, a member of the expert board of the Indonesian Foresters’ Association, called on the government to establish a task force to clear up the confusion. He suggested the task force be represented by all the ministries with authority to issue permits in the forestry and plantation industries, including the environment ministry, the land ministry and the agriculture ministry.

“This task force has to look at all the list [of companies whose permits were revoked] to see the implications,” he said during a discussion in Jakarta. “If there hasn’t been no academic study yet [to justify the permit revocation], do it now. This task force has to work in a transparent manner, be accountable to and monitored by the public.”

This story was published with permission from Mongabay.com.

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