Indonesia calls on palm oil industry, obscured by secrecy, to remain opaque

  • The Indonesian government has called on the country’s palm oil companies to refrain from releasing their plantation data, citing national security, privacy and competition reasons.
  • The publication of the data is a necessary part of sustainability certification under the Roundtable on Sustainable Palm Oil (RSPO).
  • Activists say they fear that withholding the information will further damage the reputation of Indonesia’s palm oil industry, which is already beset by allegations of deforestation, land grabbing, and labor rights abuses.
  • The government has for years sent out mixed messages about whether it will make available the plantation data, which activists say is crucial in helping resolve the hundreds of land disputes across Indonesia, most of them involving palm concessions.

JAKARTA — Environmental activists in Indonesia have denounced a recent call by the government to keep data about oil palm plantations out of the public’s reach.

Citing reasons ranging from corporate secrecy to anti-competitive practices to national security, the government issued a letter May 6 to the country’s powerful palm oil lobby advising its member companies not to share their plantation data with other parties, including external consultants, NGOs, and multilateral and foreign agencies.

The move away from transparency and toward greater opacity for an industry already widely criticized for a litany of problems — from deforestation to land grabbing to labor rights abuses — marks a setback in the pursuit for sustainability, said Asep Komarudin, a forest campaigner with Greenpeace Indonesia

“While the more progressive parts of the industry are starting to try and clean up the palm oil sector, the government is actively blocking transparency efforts, destroying the chance for the palm oil industry to clean up its reputation and undermining any work by Indonesia to meet its climate targets,” he said

Asep said the letter, which is a recommendation, might be misperceived by palm oil growers as a legal mandate to withhold their data, causing confusion for companies seeking to be certified under the Roundtable on Sustainable Palm Oil (RSPO). One of the requirements for sustainability certification is to publish plantation maps on the RSPO website, but plantation boundaries are among the data that the government doesn’t want disclosed.

“On the international level, some of these companies have already adhered to their own standards, but the letter warns these companies not to meet those standards,” Asep said, adding that the lobby “interpreted the letter as a regulation, even though it’s only an appeal.”

“That’s going to create a problem because palm oil growers will withhold all information,” he said. “This will further damage our palm oil image, which is already under scrutiny.”

Kiki Taufik, Greenpeace Indonesia’s forest campaign head, said the government’s call threatened to stymie transparency initiatives by companies such as Wilmar International, the world’s largest palm oil trader, which announced last December that it was committed to mapping and monitor hundreds of its suppliers to ensure they were not destroying rainforests.

“The Indonesian government seems determined to prevent brands knowing whether the companies that produce their palm oil are destroying forests,” he said. “This just strengthens the hand of those who claim the palm oil industry cannot be reformed. It would also do untold damage to the Indonesian economy, as many consumer brands would find themselves with no choice but to stop buying palm oil altogether.”

Kiki said this wasn’t the first time the government had blocked a private-sector initiative to boost transparency in the palm oil sector. In 2016, the Indonesian Palm Oil Pledge (IPOP), a pact between six of the world’s biggest palm oil refiners to purge their supply chains of environmental destruction and human rights abuses, was disbanded following pressure from parts of the government.

An oil palm fruitlet. Image by Rhett A. Butler/Mongabay.

National security pretext

The issuance of the letter, from the office of the coordinating minister for the economy, is the latest apparent response by Indonesia to the European Commission’s approval in March of a measure to phase out palm oil-based biofuel by 2030. The measure, known as a delegated act, stems from concerns that production of palm oil causes deforestation and thus contributes to global carbon emissions.

Indonesia and Malaysia, which together produce more than 80 percent of the world’s palm oil, have accused the EU of discriminating against the commodity in favor of vegetable oils produced by European farmers, and have threatened retaliatory measures.

Musdhalifah Machmud, the Indonesian official who signed the May 6 letter, reiterated that point in justifying the recommendation to withhold plantation data. “We [Indonesia] have to be firm as a response to the delegated act,” she said as quoted by CNN Indonesia. “We have to be more careful in protecting our natural resources.”

Specifically, she said data on land parceled off under agricultural permits, known locally as HGU, needed to be kept confidential to “protect palm oil data and information that’s strategic for the security of the national economy.”

She said that while general information on land use could be accessed by the public, detailed information about concession owners was off-limits, arguing that other countries did the same.

“The HGU documents, for instance — in the U.S. there’s no one opening their data,” Musdhalifah said. “Why should we in Indonesia open up all of our data?”

Ahmad Hanafi from the Freedom of Information Network Indonesia (FoINI), a coalition of civil society organizations advocating for transparency in governance, said withholding the HGU documents would only make the EU more distrustful of Indonesia’s palm oil. He said transparency was something the European bloc was demanding from the country’s palm oil.

“Opening up the HGU documents can increase accountability and public participation,” he told Mongabay. “On the other hand, closing off the HGU documents is the same as hiding problems raised by the European Commission about Indonesia’s palm oil.”

The EU, Indonesia’s biggest export market for palm oil, after China, has also stressed that the adoption of the delegated act is aimed at encouraging palm oil producers like Indonesia and Malaysia to improve the sustainability of their palm oil and ensure its production doesn’t exacerbate climate change.

“This delegated European Commission regulation is neither the beginning, nor the end of a policy process,” said Vincent Guérend, the EU ambassador to Indonesia. “It is just one more step on a long and collective journey towards sustainable development and carbon neutrality.”

A Bornean orangutan in Kalimantan, the Indonesian part of Borneo. The endangered species, the ape is threatened by the unbridled expansion of oil palm plantations into their forest homes. Image by Rhett A. Butler/Mongabay.

History of opacity

Proponents of transparency have for years tried to obtain access to the HGU documents, deemed a crucial step toward effective public oversight of the palm oil industry. Plantation firms routinely clear and cultivate on land outside their permitted areas, destroying forests and community lands with little oversight from local officials.

There have been at least six formal attempts by civil society organizations to get the HGU documents released by various government agencies. The most widely reported one is a bid by by Forest Watch Indonesia (FWI), an NGO, to obtain the HGU records from their custodian, the land ministry. In 2015, FWI filed a request for the release of the documents for Kalimantan, the Indonesian portion of the island of Borneo.

The ministry didn’t respond to the request, and FWI subsequently filed a report with the Central Information Commission, the government clearinghouse for freedom-of-information requests.

The land ministry, however, argued that the HGU documents should be listed as classified documents under a 2008 law on public information. The clause it cited specifically guarantees the public access to information unless the release of the information poses a risk to national security, public order or people’s livelihoods; violates intellectual property rights; exposes businesses to unhealthy competition; endangers the country’s natural resources; or put relations with other countries at risk.

The Central Information Commission rejected this line of argument, ruling that the land ministry should make the HGU documents publicly available.

The ministry then filed a series of appeals, all the way up to the Supreme Court, which in March 2017 ruled in favor of FWI and ordered the release of the data. These would have included the identities of concession holders, location and size of concessions, and aerial maps of the concessions complete with coordinates. FWI planned to use them to identify which companies managed with concessions, and thus who was responsible for deforestation in certain areas.

Despite the verdict, however, the ministry still hasn’t released the HGU documents.

Activist staging a protest against palm oil in Indonesia. Image by Rhett A. Butler/Mongabay.

Mixed messages

The land ministry wasn’t always so averse to the push for greater transparency. Under the previous minister, Ferry Mursyidan Baldan, who served from 2014 to 2016, the ministry was open to the idea of making the concession data publicly accessible.

In a letter written in April 2016 as a response to an inquiry by the RSPO, Ferry said he had no problem with companies publishing their plantation maps. The RSPO requires its members to make their existing concession boundaries publicly available in digital format (shapefile) via the RSPO website for the sake of public transparency, which the organization deems important to address many of the questions related to unsustainable practices.

“If [companies] want to publish plantation maps that they own, in principle it’s not forbidden,” Ferry wrote.

Ferry was replaced as minister by Sofyan Djalil during a cabinet reshuffle in July that year. A month later, the palm oil lobby, known by its Indonesian acronym GAPKI, asked for clarification from Sofyan on whether the HGU documents could be released to the public, saying that Ferry’s letter to the RSPO had created uncertainty among its member companies.

The new minister’s response was mixed: Sofyan initially said the plantation maps shouldn’t be released, because doing so would lead to unhealthy business competition. He also argued that the HGU documents were the property of private companies, and publishing them could reveal confidential financial information.

“It’s appropriate for the secrecy of related information to be protected by national actors in the palm oil industry,” he said in the letter.

But he later indicated that his ministry would eventually make the HGU documents publicly available, albeit behind a paywall. He said some technical issues needed to be ironed out, including determining a fee for accessing the documents.

Sofyan then switched tack again earlier this year, following a televised presidential debate between the incumbent, Joko Widodo, and his challenger, Prabowo Subianto. During the debate, Widodo raised the matter of Prabowo holding hundreds of thousands of acres of land under HGU permits in Sumatra and Kalimantan.

Activists were quick to point out that the president had used the ostensibly confidential HGU information to score political points while at the same time refusing to make the same data available to the public.

Following the debate in February, a coalition of NGOs filed a report with the police against Sofyan over his refusal to release the data as ordered by the Supreme Court. But the minister stuck to the privacy argument.

“The principle is that the HGU documents are private property, just like your house,” he told investigative magazine Tempo. “So what’s [the NGOs’] purpose for asking for the HGU data? Who are these NGOs serving? What’s their interest?”

When told that the groups were demanding greater transparency in the public interest, Sofyan was dismissive.

“Everyone can claim that they’re protecting the public,” he said. “Doesn’t the government protect its people?”

Illegal deforestation for palm oil production in Sumatra in 2015. Photo by Rhett A. Butler
Illegal deforestation for palm oil production in Sumatra in 2015. Photo by Rhett A. Butler

Even more mixed messages

Other senior officials have also waded into the controversy to push back against the release of the data.

Darmin Nasution, the coordinating minister for the economy, whose office issued the May 6 letter to the palm oil lobby, said he suspected certain palm oil companies wanted to share their data with the EU in order to negotiate some kind of exemption to the delegated act. He said all palm oil companies operating in Indonesia should stand united with the government in opposing the EU’s measure, and not break rank.

Darmin also said the government needed time to reconcile the HGU data with its one-map policy, which aims to create a single unified map of land use for the entire country, before the information could be released to the public.

There are currently at least three different versions of palm oil plantation maps in use by various government agencies.

“Once [the reconciliation] is already complete, then we will evaluate [the HGU data],” Darmin said. “We don’t want to create a commotion” by releasing the HGU documents before reconciling the different versions.

Luhut Pandjaitan, the coordinating minister for maritime affairs, the government’s point man in negotiations with the EU and whose business holdings include a stake in a palm oil company, affirmed the need to keep the HGU data under wraps.

He said some plantation companies were in breach of regulations such as mandatory allocations for smallholders, and that the government wanted to give them an opportunity to comply before releasing any data.

“We’re fixing that, step by step,” Luhut said as quoted by CNN Indonesia. “In the future, we will open up [the HGU documents].”

On a separate occasion, he said it was “OK” to release the data.

“Why [should it be perceived as] private property?” he told the business daily Kontan., directly contradicting Sofyan’s key argument. “It’s in the public domain.”

Oil palm plantation in Riau, Sumatra. Photo by Rhett A. Butler.
An oil palm plantation on Indonesia’s main western island of Sumatra. Photo by Rhett A. Butler for Mongabay.

Contradicting the president

Keeping the documents out of the public eye will hurt the Widodo administration’s own land reform program, said Fatilda Hasibuan, forest and plantation campaign manager at the Indonesian Forum for the Environment (Walhi).

The program aims to distribute lands to local and indigenous communities and resolve land disputes across Indonesia. Many of these disputes involve land traditionally occupied by an indigenous or customary community that has been signed over by the government as a concession to a plantation or mining company.

President Widodo, who has called for (though not always pursued) greater local community landownership since first coming to office in 2014, recently told his ministers that in the event of such overlaps, the state should side with the community by revoking the permits of companies that refuse to relinquish their concessions.

Fatilda said it would be impossible for the president to fulfill his land reform promises if his ministers kept holding out on releasing the HGU documents, because it was this very lack of transparency that had enabled the land conflicts to flourish in the first place.

Data from the Agrarian Reform Consortium (KPA), an NGO, show there have been at least 1,771 land conflicts between 2014 and 2018, the first four years of the Widodo administration, with 41 people killed, 546 assaulted and 940 farmers and activists facing criminal prosecution.

Oil palm plantations accounted for the largest number of cases, at 642.

“If the HGU documents aren’t released, these conflicts won’t be resolved,” Fatilda said. “If the president says disputed lands should be given to the people, but the coordinating minister for the economy takes a different stance, you can imagine that the [promise] won’t be kept.”

Sofyan, the land minister, said distributing the land to the people as promised by the president wasn’t necessarily a good outcome if they were unable to manage it productively.

“Don’t think distributing land to the people is always a good thing. That’s not necessarily true. If [the lands] aren’t productive in the hands of the people, then we will take away the lands,” he said. “The fact is that the fastest machine to generate wealth is corporate.”

Era Purnama Sari, the deputy head of advocacy at the Indonesian Legal Aid Foundation (YLBHI), said the foundation and other NGOs planned to report the office of the coordinating minister for the economy to the national ombudsman.

“The ombudsman needs to investigate if there’s been maladministration in the issuance process of the [May 6] letter,” she said. “What’s the rationale behind the letter? Who benefits from the issuance of this letter? What’s clear is that small farmers who are fighting to get the HGU documents [released to solve land conflicts] are the ones who will be disadvantaged.”


Banner image: An oil palm plantation adjacent to tropical forest in Borneo, Indonesia. Image by Rhett A. Butler/Mongabay.

This story first appeared on Mongabay

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