Palm Oil Industry Tainted By Activists’ Murders

The killing of two activists by a group of hit men at the behest of an oil palm businessman in North Sumatra province has shocked the public, adding to a long list of concerns over Indonesia’s palm oil industry, the world’s biggest, from allegations of child labor to corruption and deliberate destruction of forest land by burning.

Maratua Siregar, 55, and Maraden Sianipar, 42, were found dead 10 days ago with multiple stab wounds near a palm oil plantation run by PT Sei Alih Berombang, also known as the multibusiness cooperative (KSU) Amelia in Labuhanbatu Regency, North Sumatra.

Police have arrested five of the eight suspected killers, one of whom is Wibharry Padmoasmolo, known as Harry, the owner of the company, who allegedly hired the hit men. His arrest came after police apprehended the four suspects believed to have been directly involved in the murder, who were identified only by their initials.

North Sumatra Police chief Inspector Gen. Agus Andrianto said it was believed the murder was aimed at stopping the two activists' involvement in land disputes between the company and local residents. Police said Harry previously had ordered a hit man to kill a farmer, Ranjo Siallagan, for Rp.15 million (US$1,063), but the attempt failed. Harry denied owning the business to interrogators.

"Based on the evidence and examination of the perpetrators who have been arrested, Harry is strongly suspected of instructing them to evict and if necessary kill the two victims when they came to the plantation," Agus said.

Harry, the inspector said, allegedly paid the hit men about Rp40 million through the company's treasury. If found guilty, the suspects face the death penalty, a life sentence or 20 years in prison.

Maratua and Maraden were former journalists who are also known for their activism and advocated for locals involved in land disputes. Maratua's friend, Johan said Maratua often criticized land-related issues when he was still a journalist. He invited Maraden, who was a legislative candidate but failed to qualify for parliament, to advocate for farmers who were involved in land conflicts, which caused them to oppose the KSU Amelia.

Shortly before the death of the two, another environmental activist, Golfrid Siregar, was also allegedly killed although police had said he died in a traffic accident. Golfrid, who was also the attorney of the North Sumatra Forum for the Environment (Walhi), was known as a strong advocate for environmental issues and was involved in advocating several cases including illegal logging in Karo District, environmental pollution in Batubara District, and the hydropower dam case in Batang Toru, South Tapanuli.

Indonesia has 14 million hectares of oil palm plantations and is the world's largest palm oil producer with a total output of more than 40 million tonnes last year. The upstream and downstream palm oil sector, according to the Indonesian Palm Oil Association (GAPKI), has employed more than 15 million people, involved about 4 million smallholders and generated US$20 billion in exports.

Palm oil is processed for ingredients in thousands of food, cosmetics and other consumer products and has increasingly been used for biofuels. Although it has lifted millions of people in Indonesia out of poverty, it has become the most controversial vegetable oil, an industry often linked to deforestation and forest fires, which has caused Indonesia to be ranked among the world’s biggest emitters of carbon dioxide despite its relatively small industrial base.

Some reports have also found links between corrupt practices and forest fires, as well as human rights violations, weakening the country's position in defending its palm oil sustainability.

Amnesty International in a Nov. 30. 2016 report titled "The Great Oil Scandal" found serious human rights abuses on plantations that provide palm oil to Wilmar, the world’s largest processor and merchandiser of palm and lauric (palm kernel) oils and controls over 43 percent of the global palm oil trade. These included forced labor and child labor, gender discrimination, as well as exploitative and dangerous working practices that put the health of workers at risk.

After the forest and land fires in August through October, the National Disaster Management Agency (BNPB) revealed that 99 percent of forest and land fires were caused by human action, while 80 percent of the burned land eventually turned into oil palm plantation areas. Deliberate burning is cheaper. The police have named at least 218 people and five companies as suspects.

Since 2012, the government has tried to sue companies whose land was burned, but not a single one has paid fines. Greenpeace data shows that compensation won by the government for litigation of forest and land fires that occurred in the 2012-2015 period reached Rp2.7 trillion, but none has ever been paid.

A 2015 Indonesian-language Research paper by Herry Purnomo, et al, from the Center for International Forestry Research (CIFOR) entitled "Smoke Haze, Land Use and Local Politics" concluded that there was a link between forest and land fires and the holding of local elections. The study found that the number of hotspots on the islands of Kalimantan and Sumatra always increased sharply ahead of the elections.

"The elections are correlated with an increase in the number of burned land. In addition, the number of land clearing permits also increases ahead of the election."

The report said regional head elections often involve "land transactions," in which prospective regional leaders give residents or migrants access to manage land to attract their sympathies. Businessman also often provide financial assistance to prospective regional heads in return getting land permits when the candidate is elected.

The Corruption Eradication Commission (KPK) in 2015 assessed corrupt practices in the mineral resource sector and formed the National Movement to Save Natural Resources (GNPSDA) with the main objective of cracking down on corruption in the sector.

This year GNPSDA began targeting the plantation sector in hopes of eradicating political transactions and reducing licenses issued based on corruption. However, the Civil Coalition Against Natural Resources Mafia predicts that the revision of the regulations governing the KPK, which were recently enacted into law over the objection of reformers, will stunt the eradication of the so-called natural resource mafia.

"The KPK is more diligent in eradicating the mafia of natural resources than other law enforcement institutions. The agency repeatedly throws the mafia and corruptors into prisons related to corruption in forest, plantation and mining licenses," the Coalition said in its statement. "At least 17 mafia cases have been handled by the KPK, including the last involving the mining mafia and political parties supporting the revision of the KPK Law."

The European Union, one of the largest importers of Indonesian palm oil, aims to stop all imports by 2030. In August, the EU reintroduced tariffs ranging from 8 to 18 percent, on palm oil imports from Indonesia. The tariff and non-barriers certainly hurt the country as the largest palm oil producer.

To demonstrate its commitment to palm oil sustainability, Indonesia issued a presidential moratorium on September 19 on land expansion for three years, as well as evaluate the palm oil plantations. The government is now also aggressively campaigning for "sawit baik" (good palm) to fight the narrative about oil palm.