April 19, 2018

Peat forest clearing by two palm oil companies halted

JAKARTA ( - Two palm oil companies controlled by the Ciliandry Angky Abadi (CAA) Group have been hit with strict administrative sanctions from the Indonesian Environment and Forestry Ministry by having their peat violation-related operations terminated.

The two palm oil companies concerned have incurred these sanctions because of their continuing clearing of peat forests in Central Kalimantan’s Pulang Pisau regency, one of Indonesia’s four designated peat restoration priority regencies.

These two CAA palm oil companies, PT AGL and PT CAA, have been engaged in new peat development, which inevitably leads to peat drainage, in clear contravention of Indonesia's new peat regulations.

"There is an obvious legal basis for the law enforcement measures that the ministry has taken, in that the two companies have been committing peat violations," the Ministry's Director General of Law Enforcement Rasio "Roy" Ridho Sani confirmed to (Apr 17) at the ministry building.

The photos below show the recent situation in the palm oil concessions where peat forests were being cleared to make way for new palm oil plantations, ultimately resulting in the imposition of the strict sanctions compelling the companies to stop their operations. 

Roy appealed to all companies currently operating in peatlands to keep complying with the country's new peat regulations. If these regulations are violated, he emphasized, such as the new peat development that took place in this case, this would definitely be detected by the ministry's satellite monitoring system.

"Sooner or later law enforcement action will undoubtedly be taken, which will then be followed by the imposition of sanctions," he warned. 

The Law Enforcement Director General asserted that the strict sanctions handed down to the two palm oil companies demonstrate the ministry's consistency in enforcing the revised government regulation banning new peat development, which was signed by President Joko Widodo in early December 2016.

"It's not just these two palm oil companies that have been punished. In fact, a number of other palm oil and pulpwood companies have also been slapped with sanctions for perpetrating peat violations," Roy pointed out.

"So, (the lesson is) never try to commit new peat violations," he cautioned.

Cleaning up global supply chains 

The ministry's move to intensify law enforcement against peat violations, in this instance by halting new peat development operations in the two CAA palm oil concessions, at the same time represents a concerted legal effort to help clean up global supply chains from new peat development.

A case in point is that of corporate giants Unilever and Wilmar, both of whose sustainability policies have proved incapable of cleaning up their supply chains from deforestation and peat destruction

One example of why Unilever and Wilmar have failed to ensure deforestation and peat destruction free supply chains is that the CAA Group, the parent company of the two palm oil concessions sanctioned due to their brazen peat violations, is a direct palm oil supplier to both Unilever and Wilmar.

At the end of January this year, Environment and Forestry Minister Siti Nurbaya firmly reminded all companies operating in Indonesia which have declared deforestation and new peat development-free supply chains that they must comply with their promises on the ground level.

The minister's statement needs to be underlined and reiterated, given that severe sanctions have been imposed by her ministry due to peat violations committed by numerous companies, all of which have been linked to the supply chains of giant palm oil and pulpwood companies supposed to have disengaged from new peat development.