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Indonesian oil palm firm slapped with $61m fine for fires on its plantation

Mongabay - August 1, 2023

Hans Nicholas Jong, Jakarta – Indonesia's highest court has upheld a $61 million fine against an oil palm company over massive fires on its plantation that razed an area seven times the size of New York City's Central Park.

On July 3, the Indonesian Supreme Court ordered plantation company PT Rafi Kamajaya Abadi (RKA) had previously been found liable by lower courts for the burning that razed 2,560 hectares (6,326 acres) of its concession between 2018 and 2019 in Melawai district on the Bornean province of West Kalimantan. It was ordered to pay 920 billion rupiah in fines, a verdict that the Supreme Court upheld in a ruling handed down July 3.

The burning occurred partly on peatlands, which destroyed the carbon-rich ecosystems beyond repair, emitted massive volumes of greenhouse gases, and generated a choking haze that affected communities living across a wide radius, according to the Ministry of Environment and Forestry, which brought the lawsuit against the company.

During the peak of the fires, in September 2019, smoke from burning vegetation and peat drifted far north into Malaysia's Sarawak. Malaysian entities own 95% of RKA's shares.

Rasio Ridho Sani, the environment ministry's director-general of law enforcement, welcomed the Supreme Court's ruling, calling it another success story in the government's pursuit of "strict liability" for fires in the plantation industry.

The 2009 Environmental Law stipulates that plantation firms are strictly liable for fires that occur on their land, even fires that start outside the concession boundaries. The concept of strict liability has since been used to sue companies for such fires, regardless of whether their negligence can be shown to have caused the burning – given that such evidence is difficult to produce.

Jasmin Ragil Utomo, the environment ministry's director of dispute settlement, said the ruling shows the judiciary remains committed to upholding the law against companies that fail to manage their concessions sustainably and prevent fires.

Rasio said the latest ruling should serve as a lesson to all concession owners to not use fires to clear lands and to protect their areas from burning.

"We will not stop prosecuting environmental criminals, including those who set fires," he said. "We will use all law enforcement instruments that we have, such as administrative sanctions, dispute settlement, civil lawsuits and criminal lawsuits."

To date, the environment ministry has filed lawsuits against 22 companies for fires on their concessions. Thirteen have been found liable and have exhausted all avenues of appeal; the government is now in the process of collecting the fines from them, according to Ragil.

Rasio said his office is working closely with the Sintang District Court, where the lawsuit against RKA was originally filed, to collect the fine, which may include seizing the company's assets.

Nikodemus Alle, the head of the West Kalimantan chapter of the Indonesian Forum for the Environment (Walhi), said the ruling against RKA shows progress in law enforcement against companies responsible for land burning. But he added there are still dozens of other companies in a similar situation that haven't faced prosecution.

There are at least two other plantation companies in West Kalimantan that the environment ministry has successfully sued for fires on their concessions. In 2022, the Jakarta High Court upheld earlier rulings against the companies PT Pranaindah Gemilang (PG) and PT Putra Lirik Domas (PLD).

As a result, PG and PLD must pay 238.6 billion rupiah ($15.8 million) and 199.5 billion rupiah ($13.2 million) in fines respectively.

Source: https://news.mongabay.com/2023/08/indonesian-oil-palm-firm-slapped-with-61m-fine-for-fires-on-its-plantation