Indonesian Forest Fires Crisis: Palm oil and pulp companies with largest burned land areas are going unpunished 

“We have taken law enforcement steps. Both individuals and corporations, we have taken strict measures against everyone.”
– President Joko Widodo, 18 September 2019

“We must enforce the law without fear or favour. Even the richest person in Indonesia, if they do wrong, they’re wrong.”
– Luhut Panjaitan, then Coordinating Minister for Political, Legal and Security Affairs, 21 October 2015

A total of 3,403,000 hectares (ha) of land burned between the years 2015 and 2018 in Indonesia, according to analysis of official government burn scar data. In 2015 alone more than 2,600,000 ha of land burned. The fires that ravaged Indonesia in 2015 are considered one of the greatest environmental disasters of the 21st century so far. The World Bank estimates that the 2015 fires crisis cost Indonesia US$16 billion in losses to forestry, agriculture, tourism and other industries. The haze caused respiratory and other illnesses in hundreds of thousands of people across the region and, according to one study, likely led to over 100,000 premature deaths. 

The Indonesian government responded with a series of commitments to prevent another such crisis and promises to hold to account those responsible, including companies that had fires on their land. Indonesia has strict corporate liability in relation to forest fires, meaning that forestry, plantation or mining companies are legally responsible for any fires on their land, regardless of the ignition source.

Greenpeace Indonesia mapping analysis using official government data, combined with data on government action taken against companies which had fires on their land, confirms that almost none of the palm oil and pulp companies whose concessions had the largest areas of burned land have been punished through serious government sanctions. 

Key findings: 

Palm oil

• Only two of the dozen palm oil groups that had the largest areas of burned land in their concessions between 2015 and 2018 received any serious civil/administrative sanctions. 
• None of the 10 palm oil concessions in Indonesia that had the largest total burned area between 2015 and 2018 has received serious civil/administrative sanctions.
• No palm oil companies had their licences revoked by the government for forest fires between 2015 and 2018. The three cases where licences were revoked were all industrial timber plantation (HTI)/pulp concessions.

Pulp

• An area larger than Singapore burned in a concession linked to Sinar Mas/Asia Pulp & Paper (APP) between 2015 and 2018. This concession, which had the largest total burned area across Indonesia, only received a serious civil/administrative sanction for replanting in previously burned areas.
• One Sinar Mas/APP–related company had fires on its land in every year between 2015 and 2018 but has received no serious civil/administrative sanctions.
• Another Sinar Mas/APP–related company was taken to court because of fires on approximately 20,000 ha of its land in 2014. It lost this civil court case, but has reportedly still not paid the compensation owed. In 2015, more than 60,000 ha in the same concession burned. However, the only serious civil/administrative sanction the company received that year was for replanting in previously burned areas.
• An APRIL/RGE–related company has seen its concession land burn every year since 2015, including in 2019. In the 2015–2018 period it received serious civil/administrative sanctions just twice. A criminal investigation against numerous companies, including this one, was stopped by police in 2016 due to insufficient evidence.

Government legal action and sanctions against companies that had forest fires on their land

Government sanctions against companies for forest fires are applied following either a civil, administrative route or through criminal process. Civil and administrative cases can result in orders to pay compensation (ganti rugi), often referred to in the media as fines (denda). Other sanctions involve revoking licences (pencabutan izin), freezing licences (pembekuan izin) or issuance of government compliance orders (paksaan pemerintah). Warning letters (known as teguran tertulis) are also frequently sent to companies. The evidence-gathering stage prior to issuance of administrative sanctions is sometimes marked by the sealing (penyegelan) of recently burned land, during which time the company is prohibited from carrying out activities on the sealed area. For sanctions to be lifted, companies need to take certain actions to improve their practices in the concession areas that have been sanctioned. Information about what sort of actions companies must take or whether those actions have been taken is usually not available to nongovernmental organisation (NGO) stakeholders.

The Indonesian government has claimed significant progress in holding companies to account for forest fires and has regularly referred to winning civil court cases where companies have been ordered to pay hundreds of millions of dollars in compensation. However, a Greenpeace investigation earlier in 2019 showed that not one of the companies ordered to pay compensation for forest fires had actually paid the compensation.

The successful prosecution of the Sinar Mas/APP–related company PT Bumi Mekar Hijau for fires in its concession during 2014 was based on the principle of strict liability. However, apart from this case, the government has made practically no use of this principle in its actions against companies whose concessions have the largest burned areas or burn most frequently. In  2017 the Indonesian Palm Oil Association (Gabungan Pengusaha Kelapa Sawit Indonesia; GAPKI) and Indonesian Association for Forest Concession Holders (Asosiasi Pengusaha Hutan Indonesia; APHI) attempted to have this principle struck down by the Constitutional Court, without success. The strict liability provision remains in Indonesian law. 

A 2018 Ministry of Environment and Forestry presentation provides some details about the sanctions that were issued between 2015 and October 2018. According to the same presentation, criminal charges (pidana) were brought in 11 cases; the outcomes of these charges were not reported.

How was this analysis undertaken?

Greenpeace made a series of Freedom of Information requests at the end of 2018 to obtain details about government sanction cases, including the names of the companies that had received administrative and criminal sanctions. The information in this briefing is based on data regarding the more serious sanctions provided by the Indonesian government in July 2019. The data provided did not include details of warning letters nor all details of the criminal sanctions, so these are not included in this analysis. Greenpeace has again requested this data from the Ministry of Environment and Forestry. 

Since 2015 the Government of Indonesia has also been producing an annual official burn scar map, which enables the analysis of burned areas year by year in different regions and across Indonesia. Burn scar maps covering the period up until the end of 2018 have recently been published. Figures about burn scar in this briefing have been rounded up or down to the nearest hundred hectares.

Accurate company concession data is not readily available in Indonesia, and despite ongoing efforts by NGOs to press the government to release this data progress has been extremely limited. However, Greenpeace and other NGOs have been able to compile ‘best available’ nationwide concession data from a variety of sources for industries including palm oil and pulp and paper. While all reasonable effort has been made to ensure that the concession data is accurate, because of the different data sources and lack of government and company transparency there may be some inaccuracies. Groups were provided with the opportunity to comment prior to publication, on condition they provided evidence to support any changes to our findings. 

Making use of official burn scar data and best available concession data, it is possible to identify which concessions in Indonesia had the most burned area between 2015 and 2018, which burned during each of those years and which companies or groups had the most burned concession land amongst their holdings. By cross-checking that information with details of companies sanctioned it is also possible to identify whether serious civil/administrative sanctions have been issued to the palm oil and pulp companies and groups which had the largest areas of burned land in their concessions. This briefing summarises the results of that analysis, focusing on the period 2015–2018 and looking first at palm oil and then HTI/pulp. Forest fires related to the role of other industries, such as in logging or mining concessions, have not been considered. The fires season of 2019 is not included because it is still continuing and because official burn scar data for this year are not yet available, but data on fire hotspots identified to date are provided in the appendix. Note that new claims have been made by the Ministry of Environment and Forestry about administrative and other sanctions issued during 2019. 

Palm oil

Nine of the dozen palm oil groups that had the largest areas of burned land in their concessions between 2015 and 2018 did not receive any serious civil/administrative sanctions. Astonishingly, none of the palm oil concessions that had the largest burned areas and only one that burned every year during this period received serious government sanctions.

Palm oil groups that had the largest burned area across their concessions in 2015–2018

* Zero sanctions for palm oil. An HTI concession controlled by Korindo, PT Korintiga Hutani, was sanctioned.

Only two of the 12 palm oil groups that had the largest total burned area in their concessions between 2015 and 2018 have received serious civil/administrative sanctions from the government. A fourth group, Korindo, received sanctions for an HTI/pulpwood plantation in Kalimantan, PT Korintiga Hutani, but not for fires in its palm oil concessions.

All but two of these groups have had significant numbers of fire hotspots identified in their concessions this year. 

Palm oil companies whose concessions had the largest burned area in 2015–2018

Not one of the  palm oil company concessions  on the list of those with the largest burned area between 2015 and 2018 (more than 5,000 ha) received serious civil/administrative sanctions from the government.

Seven of these companies have had significant numbers of fire hotspots identified in their concessions this year. 

Palm oil companies with largest burned area among concessions which burned every year in 2015–2018

* Fangiono/First Resources was sanctioned for fires in other concessions, but not the ones that appear in this list.

Only one of the palm oil concessions that burned every year between 2015 and 2018 and saw a total of over 2,000 ha burn received serious sanctions: PT Sindora Seraya was issued with a government compliance order in 2016. Fangiono/First Resources has received serious sanctions by the government on a number of occasions, but not for PT Surya Dumai Agrindo, the concession that features on the list of those which burned each year.

Of the companies on this list, four have had significant numbers of fire hotspots identified in their concessions this year. 

Pulp sector

In the pulp sector, there is some relationship between groups that had the largest areas of burned land in their concessions and serious government sanctions. However, the sanctions do not match well with the concessions that had the largest burned areas or burned every year. 

Pulp groups that had the largest burned area across their concessions in 2015–2018

The pulp group that had the largest burned area in its Indonesian concessions between 2015 and 2018 was Sinar Mas/APP, with the majority of the burning taking place in South Sumatra in 2015. The single concession that had the most area burned in Indonesia during this period, PT Bumi Andalas Permai (see below), is related to Sinar Mas/APP. Numerous serious civil/administrative sanctions were imposed on Sinar Mas/APP–related companies and concessions during the 2015–2018 period – a total of 10 – but there does not appear to be a consistent link between the concessions with the largest burned areas or which burned every year (see the following tables) and those which received sanctions. The government-owned Perhutani/Inhutani and related companies had the second-largest area of burned land in its concessions during this period, but received just two serious civil/administrative sanctions.

Pulp companies whose concessions had the largest total burned area in 2015–2018

Eight of these companies have had significant numbers of fire hotspots identified in their concessions this year. 

Pulp companies with largest burned area among concessions which burned every year in 2015–2018

Two of these companies have had significant numbers of fire hotspots identified in their concessions this year.

Whilst there is a clearer relationship between pulp groups and concessions that had larger burned areas and received serious civil/administrative sanctions, there are also some troubling discrepancies. The most significant of these are as follows:

PT Bumi Andalas Permai (Sinar Mas/APP)

PT BAP had the single largest burned area of any concession in Indonesia between 2015 and 2018, across all commodities, with most of the land being burned in 2015. During this four-year period a total of 81,800 ha within the concession burned – an area larger than Singapore. However, the only serious civil/administrative sanction imposed on PT BAP was a government compliance order in 2016 due to replanting on land that burned in 2015.

PT Bumi Mekar Hijau (Sinar Mas/APP)

PT BMH had the third-largest burned area of any concession in Indonesia between 2015 and 2018. Approximately 63,000 ha within the concession burned in 2015. 

Following earlier fires in 2014 covering approximately 20,000 ha within the PT BMH concession, civil court action was taken against the company by the Indonesian government. The company lost that case but has reportedly still not paid the compensation owed. 

Between 2015 and 2018 the only serious civil/administrative sanction BT BMH received was a temporary license suspension for replanting on previously burned land after the 2015 fires.

PT Arara Abadi (Sinar Mas/APP) 

In the 2015–2018 period land burned every year in areas controlled by PT AA, but it has received no serious civil/administrative sanctions from the government. 

PT Sumatera Riang Lestari (APRIL/RGE)

In the 2015–2018 period land burned every year in areas controlled by PT SRL. The company had fires on its land for the fifth year running in early 2019. PT SRL has received serious civil/administrative sanctions only twice, although the Ministry of Environment and Forestry has recently sealed part of its land. A criminal investigation against the company was dropped in 2016.

PT Sumatera Silva Lestari (APRIL/RGE)

In the 2015–2018 period land burned every year in areas controlled by PT SSL, but it has received serious civil/administrative sanctions only once. 

Conclusions

As this analysis shows, many of the palm oil and pulp groups with the largest burned areas in their concessions have either not received any serious civil/administrative sanctions, or have had sanctions imposed that do not appear to fit with the level or frequency of burning. There is almost no evidence to suggest that the Indonesian government is applying the principle of strict liability against the companies and groups that had the largest burned areas of land or whose concessions burned most frequently. If action is not being taken on this basis, then questions must surely be asked of the government about what is driving its actions against companies that had fires on their land. 

Only two of the 12 palm oil groups with the most burned area across their concessions between 2015 and 2018 received serious civil/administrative sanctions. Gama – last on the list of groups whose concessions had the most burned area overall – was sanctioned four times for burning in four different concessions during this period. Startlingly, of the individual palm oil concessions that had the largest burned area over the 2015–2018 period, not a single one received serious civil/administrative sanctions. Of the five concessions that had the most land burn during this period and burned every year, only one was sanctioned.

Turning to the pulp sector, the most significant findings relate to Sinar Mas/APP, the group whose concessions had the largest overall burned area in Indonesia and which is affiliated with the concession that had the single largest burned area. Whilst this group received a total of 10 serious government sanctions between 2015 and 2018, some significant questions are raised by when and where these sanctions were applied. It is strange that PT Bumi Mekar Hijau had court action taken against it for fires on its land in 2014 covering approximately 20,000 ha, but faced no court action for fires covering much larger areas in 2015. Instead, the only sanction connected to the 2015 fires that PT BMH received was for later replanting in burned areas. Similarly, BT Bumi Andalas Permai, the concession with the largest burned area across the whole of Indonesia during this four-year period, was only sanctioned once for replanting in previously burned areas in 2015, and not for the fires themselves. 

Looking at companies that had concession land burn every year, PT Arara Abadi, part of the Sinar Mas/APP group, received no sanctions; nor did Moorim-controlled PT Plasma Nutfah Marind Papua. PT Sumatera Rimba Lestari, linked to APRIL/RGE, had concession land burn every year from 2015–2018 (and again in 2019) but received serious civil/administrative sanctions only twice. PT Sumatera Silva Lestari, also linked to APRIL/RGE, was sanctioned only once during this four-year period. 

The Government of Indonesia claims to be serious about enforcing the law around forest fires, holding companies to account for fires on their land and deterring future fires. But this intention is not being implemented through a consistent and escalating use of serious civil/administrative sanctions against the offending companies. Even when the most serious sanctions are applied, in the form of court action against companies who had fires on their land, there is little evidence of enforcement. None of the compensation owed by these companies for forest fires has been paid, suggesting that they can continue to operate with impunity. 

Appendix

This appendix reports on the incidence of fire hotspots to date in the 2019 fires season, in all concessions associated with the palm oil groups that had the largest burned area across their concessions in 2015–2018 and in the palm oil and pulp concessions with the largest burned areas during this period. Fire hotspot data was calculated on 16 September 2019.

Palm oil groups that had the largest burned area across their concessions in 2015–2018

Palm oil companies whose concessions had the largest burned area in 2015–2018

Palm oil companies with largest burned area among concessions which burned every year in 2015–2018

Pulp companies whose concessions had the largest total burned area in 2015–2018

Pulp companies with largest burned area among concessions which burned every year in 2015–2018

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