Indonesian graftbusters put a price tag on environmental crime

  • Indonesia’s anti-corruption agency, the KPK, has alleged huge losses incurred by the state as a result of illegal mining permits handed out by a provincial governor. The severity of the charge relies heavily on estimates of environmental damage.
  • The KPK sees the move as a breakthrough that could lead to heavier sentences and fines in corruption cases in Indonesia’s natural resources sector.
  • NGOs, however, say the agency is pulling its punches and should have cracked down harder, including seeking fines in the same amount as the alleged losses to the state.
  • In a twist in the case, the expert who helped derive the monetary figure for the environmental damages now faces a lawsuit from the defendant’s team, which claims he presented an inaccurate calculation.

JAKARTA — Indonesia’s anti-graft agency has vowed to include environmental damages in its calculations of state losses incurred through corruption, in a move that could translate to heavier sentences and fines for crimes in the natural resources sector.

The announcement by the KPK, as the agency is known, comes in connection to its ongoing prosecution of Nur Alam, the suspended governor of the province of Southeast Sulawesi.

Alam, whose name translates as “Light of Nature” and who was indicted last November, faces 18 years in prison for allegedly abusing his authority to grant mining licenses from 2009 to 2014. Among the recipients of these licenses was PT Anugrah Harisma Barakah (AHB), which engaged in illegal mining for nickel in the province.

KPK spokesman Febri Diansyah said the losses incurred by the state as a result of the alleged crimes “were quite big.”

“In this case, we’re trying to see the link between the alleged corruption and the impact caused by the issued permits, especially on the environment,” he said as reported by Kompas.

Febri said the agency was committed to making this “breakthrough” in Alam’s case and future investigations involving environmental crimes.

“The least we can do is present it before the court so that the judges can consider it,” Febri said as quoted by Media Indonesia.

Indonesia’s Southeast Sulawesi province. Image by Bwmodular/Wikimedia Commons.

The KPK asserts that AHB’s nickel mining operations resulted in 4.3 trillion rupiah ($312 million) in state losses, 2.7 trillion rupiah ($196 million) of which is said to be a combination of the value of the ecological losses, the environmental economic losses and the cost of repairing the damage.

To reach that figure, the KPK relied on a calculation by Basuki Wasis, an expert on environmental degradation from the Bogor Institute of Agriculture (IPB). He based his estimate on a 2014 environment ministry regulation on pollution and environmental degradation.

The agency also alleges that AHB gained an estimated 1.5 trillion rupiah ($109 million) as a result of the alleged corruption, bringing the total estimated state losses to 4.3 trillion rupiah ($312 million).

Based in part on the magnitude of the alleged losses incurred by the state, KPK prosecutors earlier this month sought an 18-year prison sentence for Alam — unprecedented in trials involving governors and other regional heads — and fines of 2.7 billion rupiah ($196,000).

The KPK’s Febri said this was not the first time environmental damages had been included in the calculation of state losses in a graft case. He said the agency had done the same thing in its prosecution of Rusli Zainal, the former governor of the province of Riau, as well as other regional heads and officials. In Rusli’s case, the ex-governor was sentenced to 14 years in prison (reduced to 10 years on appeal) for illegally issuing logging permits between 2001 and 2006. The KPK estimated that the corruption caused 1.2 trillion rupiah ($87 million) in state losses.

“Besides suffering from losses caused by the loss of logs, the state also had to cover the cost of reforestation,” Febri said of how the KPK reached the final figure.

An aerial shot of coastal Sulawesi. Photo by Rhett A. Butler/Mongabay.

Pulling its punches?

Environmental advocates have welcomed the KPK’s commitment to ensure that environmental losses are accounted for in cases of corruption, but said the agency could have done more.

They said that while the claim of 4.3 trillion rupiah in state losses was used by prosecutors to justify a sentencing demand of 18 years, it was not considered when determining the amount for the fine, which, at 2.7 billion rupiah, is a fraction of the alleged losses.

“Alam should ideally be fined the same amount as the environmental damages [caused by the alleged corruption] and made to pay for the recovery of the environment,” Andi Muttaqien, deputy director of the Institute for Policy Research and Advocacy (ELSAM), told Mongabay.

He noted that the fine sought by the KPK amounted to the value of a single plot of land and a building seized by the agency from Alam during the investigation.

Syahrul Fitra, a legal researcher with the environmental NGO Auriga Nusantara, agreed that the KPK should have pressed for Alam to be liable for the full cost of the environmental damages.

“The KPK has taken the first step by including environmental damages in the state losses, and even though it’s not included in the fine demand, at least it’s being considered,” he said in an interview. “Unfortunately, the move isn’t courageous enough.”

The representatives of Auriga Nusantara, ELSAM and other NGOs called on the KPK to also pursue other parties involved in the graft, including companies that benefitted from the alleged corruption.

Other companies besides AHB have been linked to Alam’s case. One of them is PT Billy Indonesia, which is affiliated with AHB and has a business partnership with Hong Kong-based Richcorp International Ltd. Richcorp is alleged to have paid 40 billion rupiah ($2.9 million) in bribes to Alam.

“That’s why we’re asking the KPK to charge companies that are involved in the case because they actively bribed [Alam],” Auriga Nusantara researcher Muhammad Iqbal Damanik said.

The director of AHB and Billy Indonesia, Widdi Aswindi, has been questioned by the KPK several times and testified as a witness during Alam’s trial. The KPK has not charged any officials from either company in the case.

The waters off the coastal village of Hakatutobu in Southeast Sulawesi turned from clear to red after intensive nickel mining started on the hillslopes above it. Photo by Melati Kaye.

‘Bad precedent’

Alam’s lawyer, Didi Supriyanto, has questioned the accuracy of the calculation presented by IPB’s Basuki, as well as the expert’s credibility.

Didi said Basuki should have calculated the environmental damages from the point after mining operations were over, and not when they were still ongoing. “There are many inaccuracies presented in his report during the trial,” Didi said.

On this basis alone, Alam’s legal team has filed a lawsuit against Basuki.

Responding to the lawsuit, Basuki told Mongabay he was working with the KPK and the Ministry of Environment and Forestry “to answer this problem.”

Basuki often serves as an expert witness for the environment ministry in lawsuits against plantation companies accused of causing peat fires.

Auriga Nusantara’s Syahrul deplored Alam’s attacking of an expert witness in his trial.

“Witnesses should be protected,” he said. “Suing Basuki will set a bad precedent, causing others to be afraid of becoming expert witnesses in court. Unless there’s been data fabrication or lies [on Basuki’s part], he should be protected.”


Banner image: Abandoned ferronickel ore strip mines on the hillslopes outside Kolaka in Indonesia’s Southeast Sulawesi province. Photo by Melati Kaye.

This story first appeared on Mongabay

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