One in five hectares of oil palm in Indonesia is illegal, report shows

  • A fifth of oil palm plantations in Indonesia, the world’s biggest producer of palm oil, are operating illegally inside forest areas that are off-limits to commercial agricultural activity, a new report from Greenpeace shows.
  • Half of these plantations are operated by corporations, and the other half by smallholders, indicating that nearly a third of registered palm oil companies in Indonesia have illegal plantations.
  • These illegal plantations occupy protected areas such as national parks and UNESCO World Heritage Site, and overlap with the habitat of threatened wildlife like orangutans and tigers.
  • Many of the companies identified in the report are members of so-called sustainability certification schemes like the RSPO and ISPO, pointing to a failure by these initiatives to address unsustainable practices.

JAKARTA — Indonesia, the world’s biggest producer of palm oil, owes a substantial slice of that output to criminal deforestation, according to a new report showing that a fifth of its plantations are illegally operating inside designated forest areas.

These plantation operators are effectively destroying large swaths of carbon-rich rainforests, releasing huge amounts of greenhouse gases into the atmosphere, and pushing iconic threatened species like orangutans and tigers closer to the brink of extinction.

Those are the findings in a new report by Greenpeace and technology consultancy TheTreeMap, which identified a Belgium-size area of oil palms — 3.12 million hectares, or 7.7 million acres — planted inside areas designated by the government as forests, where commercial agricultural activity is banned by law. These forests include parts of national parks, Ramsar wetlands, and UNESCO World Heritage Sites, all ostensibly protected zones.

The report’s headline figure aligns closely with official government estimate of 3.37 million hectares (8.33 million acres) of oil palm plantations inside forest areas throughout Indonesia. But the report goes even further, identifying the companies behind these illegal plantations.

It found at least 600 plantation companies, out of 2,056 registered palm oil firms in Indonesia, with plantings larger than 10 hectares (25 acres) operating illegally inside forest areas. This means nearly a third of all palm oil companies in Indonesia have illegal operations.

Together, these companies occupy 1.55 million hectares (3.83 million acres), or half of the illegal plantations. The other half, 1.56 million hectares (3.85 million acres), constitute smallholder plantations.

“This is a clear indication that the Indonesian government is not willing to enforce laws to stop deforestation on public lands or follow through on its climate commitments,” said Kiki Taufik, global head of Greenpeace’s Indonesian forests campaign. “Instead it is governing in the interest of corporate elites.”

These plantations don’t just operate in violation of the law, but they also contribute to climate change, Greenpeace says. It estimates that the illegal plantations generate close to 104 million metric tons of carbon emissions annually, or 60% of what the global aviation industry churns out in a year.

Kiki said these illegal operations also push Indigenous and rural communities in the affected areas toward “an apocalyptic future.”

“In areas where extensive forest clearance has been condoned, these landscapes are now subject to life-threatening heat waves, frequent flooding, and during the dry season moist forest cover is now prone to annual fires,” he said.

An Orangutan climbs a tree as the area is covered by haze from forest fires at Salat island, Palangkaraya, Central Kalimantan. This year’s nearly 2,000 wildfires are burning across Indonesia. It is the worst year since 2015. Officials estimate that the fires have burned more than 800,000 acres. The smoke and flames threaten endangered species like orangutans that can only be found in Kalimantan and Sumatra. Image courtesy of Jurnasyanto Sukarno/Greenpeace

Wildlife habitat destroyed

The illegal operations have also displaced wildlife from their habitat, according to the report.

As of 2019, oil palm plantings in designated forests cover around 183,700 hectares (453,900 acres) of land previously mapped as orangutan habitat, and 148,800 hectares (367,800 acres) of Sumatran tiger habitat.

“This data put emphasis on companies that keep getting [their crimes] whitewashed and the impact [that these illegal plantations] have on the habitat of orangutans, elephants and tigers,” Greenpeace Indonesia forest campaigner Arie Rompas told Mongabay.

The report cited the case of Tesso Nilo National Park in Sumatra, which has the largest area occupied by oil palm plantations of all protected areas in Indonesia. The park is notable for its critically endangered Sumatran tigers and elephants, but is heavily deforested by illegal oil palm plantations and human settlements. Greenpeace identified 16,362 hectares (40,400 acres) of oil palm plantations there, out of the park’s total area of 100,000 hectares (247,000 acres).

Conservation organizations say politically connected local landholding elites are involved in the extensive illegal conversion of forested land inside the park to oil palm plantations.

“These problems increase conflicts between humans and wildlife because their habitat is destroyed by oil palm [plantations],” Arie said. “There’s a lot of news about tigers [roaming] inside oil palm plantations.”

Protected landscapes in Indonesia fall under two categories: protected forests, which area important for preserving water catchments, preventing erosion, and storing large amounts of carbon and biodiversity; and conservation areas, which consist largely of national parks, nature reserves and wildlife sanctuaries.

Greenpeace identified 146,871 hectares (362,900 acres) of illegal plantations inside protected forests and 90,200 hectares (222,890 acres) in conservation areas.

Company-owned plantations abound in protected areas on the islands of Sulawesi, Papua and Borneo, while smallholder plantations account for most of the plantations in protected areas in Sumatra.

Greenpeace also identified the top 25 companies with the largest plantations inside these protected areas. Together, they operate 22,924 hectares (56,600 acres) of plantations in protected forests and 13,353 hectares (33,000 acres) in conservation areas.

A Dayak Ngaju tribe man tries to extinguish fire using a brunch on burning peatland at a sanctuary reserve area inside the oil palm concession of PT Globalindo Agung Lestari (GAL) in Mantangai, Kapuas district, Central Kalimantan. PT GAL is under the group of Malaysian company Genting Plantations Berhad. Image courtesy of Image courtesy of Jurnasyanto Sukarno/Greenpeace

Certification of (un)sustainability

Some of the companies are certified under sustainability schemes such as the Roundtable on Sustainable Palm Oil (RSPO) and the government’s Indonesian Sustainable Palm Oil (ISPO) program.

The RSPO, the world’s leading palm oil sustainability certification scheme, requires its members to comply with all applicable national laws and regulations, including, in the case of Indonesia, not operating in a forest area. Yet Greenpeace still found RSPO member plantation companies operating across 283,686 hectares (701,000 acres) of forest areas.

At least eight of them have more than 10,000 hectares (24,700 acres) of illegal plantations. They are Sinar Mas, Wilmar, Musim Mas, Goodhope, Citra Borneo Indah, Genting, Bumitama and Sime Darby.

The largest of them, Sinar Mas, has 57,676 hectares (142,500 acres) of oil palms inside forest areas, followed by Wilmar with 50,593 hectares (125,000 acres) and Musim Mas with 36,481 hectares (90,100 acres), according to the report.

Some RSPO members also operate inside conservation areas and protected forests. Sinar Mas, for instance, has 1,989 hectares (4,900 acres) of plantations in conservation areas.

Complaints have been made to the RSPO regarding these illegal activities by its members, but these complaints had been closed even though past violations haven’t been addressed, according to Greenpeace.

Greenpeace cited the case of Genting Group’s three plantation companies in Central Kalimantan province — PT Susantri Permai, PT Kapuas Maju Jaya and PT Dwie Warna Karya — which carried out clearing inside designated forests.

RSPO closed the complaint in 2019 on the basis that Genting had applied to the government to have the designation changed in 2016. However, the bulk of the clearing occurred from 2009-2012, and the environment ministry hasn’t approved Genting’s request to have the forest designation dropped.

That means Genting’s activities inside the forest areas were still illegal when the RSPO closed the complaint, Greenpeace said.

Responding to the report, RSPO assurance director Tiur Rumondang called Greenpeace’s data incomplete and said it needed to be validated first with RSPO data.

“We have our own data that’s collected from our members,” she told Mongabay. “So if there’s indeed something wrong, we match our data first [with Greenpeace’s data]. Every accusation has to be verified first so that it can be fair to all parties.”

Tiur said RSPO members found violating the scheme’s rules and procedures by planting inside forest areas must undertake remediation and compensation procedures.

“Some RSPO members have admitted that they’ve done illegal clearing [inside forest areas],” she said. “So there are liabilities that have to be completed in the next 25 years to recover” the environmental damage done by the illegal planting.

The Indonesian government’s own sustainability label, the ISPO, is also held by companies with illegal plantations. More than 200 ISPO-certified companies, or a quarter of its members, operate a combined 252,202 hectares (623,200 acres) of plantations in forest estates, according to the Greenpeace report.

And as with the RSPO-certified companies, Greenpeace also found ISPO members to be planting inside conservation areas and protected forests, with 14 ISPO-certified concessions in the former and 24 in the latter.

Unlike the RSPO, which is voluntary, the ISPO is mandatory for all palm oil companies operating in Indonesia. But the widespread flouting of its rules could jeopardize the scheme’s stated aims of reducing greenhouse gas emissions and increasing international market acceptance of Indonesian palm oil, according to Greenpeace.

“ISPO has shown to be no different from the RSPO: both have allowed member companies to openly operate outside of national laws and regulations,” Greenpeace said. “They cannot be relied upon by overseas consumers concerned about their role in the global chain that leads to deforestation.”

Responding to the findings, 17 companies signed a joint reply, saying they had “complied with the prevailing Indonesian laws and regulations on land permit usage for oil palm plantations.”

Among the companies are producer groups with some of the largest operations inside forest areas, such as Musim Mas, Genting Plantations, Golden Agri Resources (Sinar Mas) and Wilmar.

In the letter, the companies said they didn’t “deliberately” create the illegality.

Greenpeace said this might have been true in the early years for some plantations, when the forestry ministry temporarily waived the requirement for redesignating forests, such as in Central Kalimantan province from 2000-2006.

“However, it is misleading in other cases and after that period, where companies deliberately continued operating instead of complying with the law prohibiting plantation operations on forest estate,” Greenpeace said. “In such cases, plantation companies have been knowingly operating on the basis of local government-issued business permits, which only ever covered the first half of the full permitting process — they never provided a legal basis for operating inside the forest estate.”

An Eagle (Nisaetus cirrhatus) stands on a burned tree stump in burned peatland covered by haze from the fires in an ex concession of PT. Dyera Hutani Lestari (DHL) in Koto Kandis Dendang, East Tanjung Jabung, Jambi. Image courtesy of Muhammad Adimaja/Greenpeace

Amnesties and whitewashing

Companies continue to operating illegally inside forest areas due to lax law enforcement and government policies. According to Greenpeace, there have been very few criminal charges brought by police and prosecutors despite reports from green groups and local communities demanding legal action against companies operating illegally inside forest estates.

For instance, in 2017 the Kalimantan Legal Aid Institute (LBH Kalimantan) reported at least 13 companies in West Kalimantan province to the environment ministry, including companies operating inside protected forests, conservation areas, and national parks. Yet no legal action has ever been taken against them since.

This lack of law enforcement is expected to get worse as the government has issued three increasingly lenient amnesties between 2012 and 2020. These amnesties give violating companies a grace period to apply to have the land redesignated as non-forest area, or for a forest land swap. The latest of them comes in the hugely controversial omnibus law on job creation, passed last year in the face of near-universal public opposition. The law ushers in a wave of deregulation across a range of industries, including rolling back environmental protections and incentivizing extractive industries such as mining and plantations.

The omnibus law extends the grace period from one year to three years, and replaces penal sanctions with administrative penalties. Under the omnibus law, companies that meet certain criteria only have to pay the requisite fines and obtain the proper permits, including the degazetting of the forest designation, to resume their operations inside forest areas.

Ruandha Agung Sugardiman, the director-general of planning at the environment ministry, said this provision in the omnibus law “solves” the environmental violations committed by plantation companies operating illegally inside forests. Greenpeace called it an effort to legitimize a crime, saying it “raises the prospect of across-the-board retrospective legalization for companies that have until now either ignored the law or been ineligible under the previous amnesties.” Lawmakers, the same ones who voted for the omnibus law, called the amnesty “a whitewashing” of a crime.

According to the Greenpeace analysis, this last amnesty throws open the door to oil palm plantation companies occupying nearly 666,000 hectares (1.64 million acres) of forest estate that were not previously eligible for retrospective legalization.

An oil palm plantation in Riau, Sumatra, Indonesia. Image by Rhett A. Butler / Mongabay.

Lack of transparency

Efforts to hold the companies accountable for their illegal plantations have been hindered by lack of transparency, with the government refusing to publicly release oil palm concession data and maps, Greenpeace said.

Civil society groups have for years called on the forestry ministry to make the plantation maps publicly available to increase transparency about concession boundaries and permit holder identities.

Indonesia’s Supreme Court ruled in 2017 that all plantation data and maps across the country should be made publicly available. However, the government, in this case the land ministry, continues to defy the court ruling by repeatedly refusing to release the information, citing reasons ranging from intellectual property rights to national security.

The government’s secrecy is also the reason why the 17 companies that signed the joint reply to the Greenpeace report said they couldn’t confirm the findings. They said they’ve been barred since 2020 by the land ministry from publishing and share their concession maps in digital format, which would allow for much more sophisticated analysis.

Greenpeace said it’s time for complete data on concessions, including ownership, maps and permits, to be publicly released. Forest campaigner Arie said the government should also publish the list of companies applying to redesignate forest areas into non-forest areas, and identify which applications were approved and which rejected.

Greenpeace had sought the list from the environment ministry, but only received the list of companies whose requests were accepted — that is, the companies whose illegal plantations in forest areas are now in the process of legitimization.

But the list provided by the ministry names only 63 companies, far short of the 367 identified by Greenpeace as having substantial plantings in forest areas.

Releasing the list of companies whose applications were rejected, presumably the majority of them, would make it easier for the public to hold them accountable for their illegal plantations, Arie said.

The government’s refusal to publish the list, he said, “is an opportunity for negotiation and underhanded dealings” between government officials and the companies.


Banner image: Deforestation in West Kalimantan, Indonesia on land likely to be converted to oil palm plantation. Image by Rhett A. Butler / Mongabay.


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