Tag Archive | Southeast Asia

Indonesian court fines palm oil giant for tax evasion

Channel News Asia

JAKARTA: Indonesia’s Supreme Court ordered a major palm oil company to pay more than $390 million to the state for tax evasion, a judge said on Friday, in a case likely to set a precedent in the graft-ridden nation.

The court found Asian Agri and more than a dozen of its subsidiaries guilty of “deliberately not filling tax forms properly between 2002 and 2005″, marking the country’s first prosecution in a major corporate tax case.

Head judge Djoko Sarwoko told AFP said the company was ordered to pay back state losses of 1.26 trillion rupiah ($130.5 million) and was fined an additional 2.52 trillion rupiah to be paid within a year.

The case is seen as breakthrough in Southeast Asia’s largest economy, where sweeping tax reforms introduced in recent years have been met with hostile resistance from big business.

Sarwoko said that the ruling – made on December 18 but only publicised this week – would set a precedent for at least nine major tax crime cases in the pipeline.

Asian Agri is one of Asia’s biggest palm oil producers, exporting three million tonnes of palm oil in 2011 with more than 160,000 hectares of plantations on the island of Sumatra, according to its website.

It is a subsidiary of Royal Golden Eagle (RGE), a Singapore-based conglomerate of palm oil, pulp and oil and gas firms owned by Sukanto Tanoto, Indonesia’s seventh-richest tycoon, according to Forbes.

Environmental groups have also long accused RGE’s pulp and paper company Asia Pacific Resources International (APRIL) of logging on protected carbon-rich peatland in Sumatra.

The Asian Agri case began in 2006 when a former financial controller at the company accused of embezzling money from the firm reported that the company had evaded tax.

The case was thrown back and forth between the Tax Office and the Attorney-General’s Office, raising criticisms that government institutions and law enforcers were reluctant to address major tax crimes.

“Big multi-national companies are not unattached to political and business operations. That’s why tax cases have proceeded at a snail’s pace,” Firdaus Ilyas from Indonesia Corruption Watch (ICW) said.

Ilyas said that ICW research showed resource-based companies were the most likely to evade tax in Indonesia.

A report released this month by Washington-based Global Financial Integrity ranked Indonesia ninth for illicit financial outflows among the world’s developing nations, losing $109 billion in crime, tax evasion and corruption between 2001 and 2010.

Transparency International ranks Indonesia 118 in its transparency index, one of the lowest of 174 countries, assessed on par with Madagascar and Egypt.

- AFP/de

 

Indonesia’s forests under renewed threat – experts

By Thin Lei Win  Trust.org

BANGKOK (AlertNet Climate) – Indonesia’s dwindling forests and an ambitious plan by the country’s president to reduce greenhouse gas emissions in the world’s third largest emitter are under threat due to the struggle between national and local governments for authority over precious forest land, environmental activists told AlertNet.

In February, Indonesia’s Constitution Court struck down a controversial clause of the Forestry Law, saying it was unconstitutional for the central government to designate forest zones without proper mapping, after six plaintiffs, including five district heads (known as “bupatis”) from Central Kalimantan, a province in the Indonesian portion of Borneo, asked for a review of the law.

This has left everyone wondering what would happen to millions of hectares of land that have been designated as forest zone but have not been mapped. Currently, only 14.2 million of some 130 million hectares are adequately mapped.

Among the questions being asked are: Are these areas now considered non-forest zones and will local governments be able to issue licenses at will to companies to turn them into mines and palm oil plantations?

Would that lead to further degradation of forests and increased social conflict in a sector not noted for its transparency as the government busies itself trying to map millions of hectares of land?

Is this another nail in the coffin for Indonesia’s tropical rainforests, the world’s third-largest, which President Susilo Bambang Yudhoyono has vowed to save in order to cut greenhouse gas emissions, which drive climate change?

“There are concerns that (the decision) inherently weakens controls on deforestation across the country by further liberalising permit allocation in the provinces and districts,” said Jago Wadley, a senior forest campaigner for the London-based Environmental Investigation Agency (EIA).

Indonesia’s forestry and plantations sectors “are riddled with systemic corruption at all levels” and law enforcement is also weak, he said. That presents fundamental barriers to the goals of reducing deforestation and associated emissions, he said.

A number of the provinces are planning to or have already made requests to the Ministry of Forestry to re-adjust their forest lands although it’s unclear how this would affect forest cover, said Philip Wells, director at Indonesia-based Daemeter Consulting and co-author of a policy brief on the court decision.

GOVERNANCE AND DEFORESTATION

The bupatis had argued that large portions of their administrative districts, in which hundreds of thousands of people lived, had been designated as forest lands, leaving them dependent upon the Ministry of Forestry for permission to develop their districts, including giving out lucrative licenses for palm oil plantations or mining.

Prior to the court decision, they could go to jail for licensing plantations in what the national government considers a forest zone. Environmentalists say many bupatis, who became powerful after Indonesia’s decentralisation, allow widespread illegal deforestation in Southeast Asia’s biggest economy.

According to a report by the Center for International Forestry Research (CIFOR), “At the local level, district timber permits became an important form of patronage for bupatis, who often used them to secure political loyalties among key constituencies and to finance election campaigns and other initiatives.”

Abu Meridian, from the Indonesian environmental organisation Telapak, confirmed the problem.

“The regulation comes from the central government but the decision to give the permit is done in provincial or district levels. Even though the government asks a certain areas not to be released for palm oil, the bupatis still do it,” he said.

“The statement from the President (about cutting emissions) is good but the problem is the reality in the field,” where communities are rarely consulted about projects that would significantly affect the forests and lands they depend on for their livelihoods, he said.

The government says deforestation on a national basis has fallen to around 500,000 hectares annually, and in May 2011, Yudhoyono announced a two-year moratorium on forest concessions. Environmental activists, however, believe the annual deforestation figure is higher than reported.

ENORMOUS TASK AHEAD

Indonesia’s government has tried to address the concerns over the court’s decision but there is much disquiet over an amendment issued in July that offers companies working without permits on land still classified as forests the chance to apply for permits retroactively.

“(The amendment) is an exercise in legalising crime in the oil palm plantations and mining sectors in exchange for maintaining a veneer of central government control over land allocation,” said EIA’s Wadley.

“The government has traded the rule of law for political expediency, likely at the expense of forests, local communities and indigenous peoples,” setting a dangerous precedent, he added.

The government has announced it intends to finish mapping forest areas by the end of 2014.

Although it says 80 percent of the job has already been done, “it is still an enormous task,” Daemeter’s Wells said. “The number of kilometres that have to be mapped is still huge.”

“If you try and do it too fast, mistakes could be made and indigenous land rights not recognised, leading to problems later down the line,” he warned.

CHANCE TO DO THINGS RIGHT?

Still, Wells believes the court decision provides an opportunity to do things right.

“The provinces, the central government and the Ministry of Forestry – they all potentially have quite a lot to lose,” especially if they get entangled in more court cases, he said. “The best solution for all parties is… to reach a compromise.”

In what he calls the “best-case” scenario, the Constitutional Court’s decision would “create a new opportunity for a rational, consensus-based approach to spatial planning that maximises positive outcomes for forests, peatlands, economic development, and community rights,” said the consultancy.

The “worst-case” scenario would be a protracted disagreement between the Ministry and regional authorities over land allocation, leading to continued delays in setting borders and creating sensible land use plans and leading to worsening deforestation and climate-changing emissions.

“In my opinion, the real key to success would be for the spatial plans to be reviewed in light of targets for low carbon emissions. But that really isn’t going to work unless the provinces and the Ministry could work together,” said Wells.

Activists and researcher warn that time for getting forest mapping right may be running out.

Yudhoyono, who has said he wants to leave a green legacy of his time in power, leaves office in 2014, and many of the new presidential hopefuls are not known for their interest in environmental protection.

 

Biggest Asian wildlife traffickers are untouchable

 

By DENIS D. GRAY 

The Associated Press

BANGKOK — Squealing tiger cubs stuffed into carry-on bags. Luggage packed with hundreds of squirming tortoises, elephant tusks, even water dragons and American paddlefish. Officials at Thailand’s gateway airport proudly tick off the illegally trafficked wildlife they have seized over the past two years.

In this photo taken June 2, 2011, a young Indian roofed turtle crawls on the fingers of a custom officer during a news conference on wildlife seized in Bangkok, Thailand. Officials at Thailand’s gateway airport proudly tick off the illegally trafficked wildlife they have seized over the past two years. But Thai and foreign law enforcement officers tell another story: officials working-hand-in-hand with the traffickers ensure that other shipments through Suvarnabhumi International Airport are whisked off before they even reach customs inspection. (AP Photo/Apichart Weerawong)

In this photo taken June 2, 2011, a Thai custom officer shows an Indian gharial, a type of crocodile native of India, with its mouth tied at a news conference on wildlife seized in Bangkok, Thailand. Officials at Thailand’s gateway airport proudly tick off the illegally trafficked wildlife they have seized over the past two years. But Thai and foreign law enforcement officers tell another story: officials working-hand-in-hand with the traffickers ensure that other shipments through Suvarnabhumi International Airport are whisked off before they even reach customs inspection. (AP Photo/Apichart Weerawong)

In this photo taken July 17, 2012, Thai custom officials stand next to a line of ivory that were confiscated and shown at a news conference in Bangkok, Thailand. Officials at Thailand’s gateway airport proudly tick off the illegally trafficked wildlife they have seized over the past two years. But Thai and foreign law enforcement officers tell another story: officials working-hand-in-hand with the traffickers ensure that other shipments through Suvarnabhumi International Airport are whisked off before they even reach customs inspection. (AP Photo/Apichart Weerawong)

But Thai and foreign law enforcement officers tell another story: Officials working-hand-in-hand with traffickers ensure that other shipments through Suvarnabhumi International Airport are whisked off before they even reach customs inspection.

It’s a murky mix. A 10-fold increase in wildlife law enforcement actions, including seizures, has been reported in the past six years in Southeast Asia. Yet, the trade’s Mr. Bigs, masterful in taking advantage of pervasive corruption, appear immune to arrest and continue to orchestrate the decimation of wildlife in Thailand, the region and beyond.

And Southeast Asia’s honest cops don’t have it easy.

“It is very difficult for me. I have to sit among people who are both good and some who are corrupt, says Chanvut Vajrabukka, a retired police general. “If I say, ‘You have to go out and arrest that target,’ some in the room may well warn them,'” says Chanvut, who now advises ASEAN-WEN, the regional wildlife enforcement network.

Several kingpins, says wildlife activist Steven Galster, have recently been confronted by authorities, “but in the end, good uniforms are running into, and often stopped by bad uniforms. It’s like a bad Hollywood cop movie.

“Most high-level traffickers remain untouched and continue to replace arrested underlings with new ones,” says Galster, who works for the FREELAND Foundation, an anti-trafficking group.

Galster, who earlier worked undercover in Asia and elsewhere, heaps praise on the region’s dedicated, honest officers because they persevere knowing they could be sidelined for their efforts.

Recently, Lt. Col. Adtaphon Sudsai, a highly regarded, outspoken officer, was instructed to lay off what had seemed an open-and-shut case he cracked four years ago when he penetrated a gang along the Mekong River smuggling pangolin.

This led him to Mrs. Daoreung Chaimas, alleged by conservation groups to be one of Southeast Asia’s biggest tiger dealers. Despite being arrested twice, having her own assistants testify against her and DNA testing that showed two cubs were not offsprings from zoo-bred parents as she claimed, Daoreung remains free and the case may never go to the prosecutor’s office.

“Her husband has been exercising his influence,” says Adtaphon, referring to her police officer spouse. “It seems that no policeman wants to get involved with this case.” The day the officer went to arrest her the second time, his transfer to another post was announced.

“Maybe it was a coincidence,” the colonel says.

In another not uncommon case, a former Thai police officer who tried to crack down on traders at Bangkok’s vast Chatuchak Market got a visit from a senior police general who told him to “chill it or get removed.”

“I admit that in many cases, I cannot move against the big guys,” Chanvut, the retired general, notes. “The syndicates like all organized crime are built like a pyramid. We can capture the small guys but at the top they have money, the best lawyers, protection. What are we going to do?”

Chanvut’s problems are shared by others in Southeast Asia, the prime funnel for wildlife destined for the world’s No. 1 consumer — China — where many animal parts are consumed in the belief they have medicinal or aphrodisiacal properties.

Most recently, a torrent of rhino horn and elephant tusks has poured through it from Africa, which suffers the greatest slaughter of these two endangered animals in decades.

Vietnam was singled out last month by the World Wide Fund for Nature (WWF) as the top destination country for the highly-prized rhino horn.

Tens of thousands of birds, mostly parrots and cockatoos plucked from the wild, are being imported from the Solomon Islands into Singapore, often touted as one of Asia’s least corrupt nations, in violation of CITES, the international convention on wildlife trade.

According to TRAFFIC, the international body monitoring wildlife trade, the imported birds are listed as captive-bred, even though it’s widely known that the Pacific Ocean islands have virtually no breeding facilities.

Communist Laos continues to harbor Vixay Keosavang, identified as one of the region’s half dozen Mr. Bigs, who has been linked by the South African press to a rhino smuggling ring. The 54-year-old former soldier and provincial official is reported to have close ties to senior government officials in Laos and Vietnam.

Thai and foreign enforcement agents, who insist on anonymity since most work undercover, say they have accumulated unprecedented details of the gangs, which are increasingly linked to drug and human trafficking syndicates.

They say a key Thai smuggler, who runs a shipping company, has a gamut of law enforcement officers in his pocket, allowing him to traffic rhino horns, ivory and tiger parts to China. He frequently entertains his facilitators at a restaurant in his office building.

According to the agents, Chinese buyers, informed of incoming shipments, fly to Bangkok, staying at hotels pinpointed by the agents around the Chatuchak Market, where endangered species are openly sold. There they seal deals with known middlemen and freight operators.

The sources say that when they report such investigations seizures are either made for “public relations,” sink into a “black hole” — or the information is leaked to the wrongdoers.

Such a tip-off from someone at Bangkok airport customs allowed a trafficker to stop shipment of a live giraffe with powdered rhino horn believed to be implanted in its vagina.

“The 100,000 passengers moving through this airport from around the world everyday are oblivious to the fact that they are standing in one of the world’s hottest wildlife trafficking zones,” says Galster.

Officials interviewed at the airport, one of Asia’s busiest, acknowledge corruption exists, but downplay its extent and say measures are being taken to root it out.

Chanvut says corruption is not the sole culprit, pointing out the multiple agencies which often don’t cooperate or share information. Each with a role at Bangkok’s airport, are the police, national parks department, customs, immigration, the military and CITES, which regulates international trade in endangered species.

With poor communication between police and immigration, for example, a trader whose passport has been seized at the airport can obtain a forged one and slip across a land border a few days later.

Those arrested frequently abscond by paying bribes or are fined and the case closed without further investigation. “Controlled delivery” — effectively penetrating networks by allowing illicit cargo to pass through to its destination — is rare.

Thailand’s decades-old wildlife law also awaits revision and the closing of loopholes, such as the lack of protection for African elephants, and far stiffer penalties.

“The bottom line is that if wildlife traffickers are not treated as serious criminals in Southeast Asia we are just going to lose more wildlife,” says Chris Shepherd, TRAFFIC’s Southeast Asia deputy director. “How often is anyone arrested? They just run off, they must be the fastest people on Earth.”

Chalida Phungravee, who heads the cargo customs bureau at Suvarnabhumi, says just the sheer scale makes her job difficult. The airport each year handles 45 million passengers and 3 million tons of cargo, only some 3 percent of which is X-rayed on arrival. The main customs warehouse is the size of 27 football fields.

But seizures are made, she said, including boxes of tusks — the remnants of some 50 felled elephants — aboard a recent Kenya Airlines flight declared as handicrafts and addressed to a nonexistent company.

“We have cut down a lot on corruption. It still exists but remains minimal,” she said, citing recent computerization which has created a space — dubbed “the Green Line” — between customs officials, cargo and traffickers.

Galster says unlike the past, traffickers are no longer guaranteed safe passage, describing a daily battle at Suvarnabhumi with “undercover officers monitoring corrupt ones and smugglers trying to outwit them all.”

Such increased enforcement efforts in the region have slowed decimation of endangered species, he says, “but there is still a crash going on. If corruption is not tackled soon, you can say goodbye to Asia’s tigers, elephants and a whole host of other animals.”

 

It’s either orangutans or cheap palm oil

 

An adult male orangutan is captured for re-release after it’s home forest has quickly been cleared for palm oil plantations in Tripa, Aceh Province, 18 April 2012. The Tripa Peatswamp forest supports the highest density of Sumatran Orangutans anywhere on earth, but are still being cleared by palm oil companies who think they are beyond the reach of the law, the situation is urgent and requires action according to Dr Ian Singelton, Director of the Sumatran Orangutan Conservation Program. Photo: Paul Hilton

Free Malaysia Today By Kafil Yamin

JAKARTA: When four men were sentenced to eight months in jail in March for the ‘murder’ of orangutans, it was the first time that people associated with Indonesia’s booming palm oil industry were convicted for killing man’s close relations in the primate family.

Conservationists were not happy with the ‘light’ sentences handed down by the court in Kutai Kertanegara district, East Kalimantan, on March 18, to Imam Muktarom, Mujianto, Widiantoro and Malaysian national Phuah Cuan Pun.

“As expected, the sentences were light, much lighter than what the prosecutors demanded. Such punishments will not bring any change to the situation of orangutans,” Fian Khairunnissa, an activist of the Centre for Orangutan Protection, told IPS.

Indonesia’s courts have generally looked the other way as the palm oil industry relentlessly decimated orangutans by destroying vast swathes of Southeast Asia’s rainforests to convert them into oil palm plantations.

In April, a court in Banda Aceh, Sumatra, dismissed a case filed by the Indonesia Environmental Forum (WALHI) against PT Kallista Alam, one of five palm oil firms operating in Tripa, and Irwandi Yusuf, former governor of Aceh province, for the conversion of 1,600 hectares (3,950 acres) of carbon-rich peat forests into palm oil plantations.

The court admonished WALHI saying it should have sought an out-of-court settlement with PT Kallista Alam – which never paused clearing its 1,600-hectare concession, granted in August 2011.

Mysteriously, just before the WALHI case was to be heard in court, numerous fires broke out in the Tripa peat swamps, including in the concession granted to PT Kallista Alam.

Community leaders in Tripa point out that the concessions fly in the face of a presidential moratorium on new permits to clear primary forests, effective in Indonesia since last year as part of a billion dollar deal with Norway to cut greenhouse gas emissions.

“The issuance of a license to Kallista is a crime, because it changes the Leuser ecosystem and peat land forests into business concessions,” Kamarudin, a Tripa community spokesman, told IPS.

The Leuser Ecosystem, in the provinces of Aceh and North Sumatra, covers more than 2.6 million hectares of prime tropical rain forest and is the last place on earth where Sumatran sub-species of elephants, rhinoceros, tigers and orangutans coexist.

The survival of orangutans, a ‘keystone species’, is critical for the wellbeing of other animals and plants with which they coexist in a habitat.

Orangutan seen as encroachers

A statement released in June by the Sumatran Orangutan Conservation Programme estimated that there are now only 200 of the red-harired great apes left in Tripa compared to about 2,000 in 1990 and said their situation was now ‘desperate’ as result of the fires and clearing operations carried out by palm oil companies.

During the last five years, the oil palm business has emerged as a major force in the Indonesian economy, with an investment value of close five billion dollars on eight million hectares.

Indonesia plans to increase crude palm oil (CPO) production from the current 23.2 million tons this year to 28.4 million tons by 2014. This calls for an 18.7 percent increase in plantation area, according to Indonesia’s agriculture ministry.

But the price of the planned expansion would be further shrinkage of orangutan habitat by 1.6 million hectares because oil companies find it cheaper to burn forests and chase away or kill the orangutans.

“If you find orangutans in palm oil plantations, they are not coming there from somewhere else… they are in their own homes that have been changed into plantations,” said Linda Yuliani, a researcher at the Centre for International Forestry Research.

“But plantation company people see the orangutans as the encroachers,” she said. “Confused orangutans can often be seen wandering in plantations, and with their habitat gone, they forage on young palm trees,” she said.

A joint survey by 19 organisations, including The Nature Conservancy, WWF and the Association of Primate Experts, found that some 750 orangutans died during 2008-2009, mostly because of conflict with human beings.

It has not mattered that Indonesia is one of the signatories to the Convention on Illegal Trade and Endangered Species, which classifies orangutans under Appendix I which lists species identified as currently endangered, or in danger of extinction.

“Clearing peat land also releases huge volumes of carbon dioxide, similar to amounts released during volcanic eruptions,” Willie Smits, a Dutch conservationist who works on orangutan protection, tells IPS.

Enforcement needed

Reckless clearing of peat swamp forests has already turned Indonesia into the world’s largest emitter of carbon dioxide, after the United States and China.

“The government may earn some money from oil palm investment, but there are far bigger losses from environmental destruction,” says Elfian Effendi, director of Greenomics Indonesia. “There is a multiplied effect on the local economy and loss of biodiversity.”

But, even to some conservationists, stopping the oil palm business in Indonesia – which feeds a vast range of industries from fast food and cosmetics to biodiesel – is impractical.

“What is needed is enforcement of schemes that allow the palm oil business and orangutans to co-exist,” Resit Rozer, a Dutch conservationist who runs a sanctuary for rescued orangutans, told IPS.

Palm oil companies that are members of the Roundtable on Sustainable Palm Oil (RSPO), a convention to encourage importers to buy only RSPO-certified CPO, see no advantage in the scheme that requires them to set aside a forest block for orangutans within plantations and provide safe corridors for the apes to move from one spot to another.

“US and several European countries still buy non-certified CPO as the RSPO certificate does not gurantee purchase,” Rozer told IPS. “The West told us to practice environmentally-sound business, but they do not buy RSPO-certified CPO because implementation has been delayed till 2015,” Rozer said.

“For companies that have invested in RSPO certification, the delay has been a heavy blow. They feel cheated,” said Rozer who helps palm oil companies in creating orangutan refuges and corridors.

IPS

 

Campaign cuts Norway’s palm oil consumption 64%

 

Mongabay.com

A campaign run by environmental activists has helped lead to a 64 percent reduction in palm oil use by eight major food companies in Norway, reports Rainforest Foundation Norway, which led the effort.

Rainforest Foundation Norway and Green Living launched the palm oil campaign last fall highlight links between palm oil consumption and deforestation in Southeast Asia. It aimed to reduce demand for palm oil in the Scandinavian country, where palm oil consumption was roughly 3 kilogram per year, mostly through processed food products.

The campaign asked major food companies to disclose their palm oil use and whether palm oil was certified under the Roundtable on Sustainable Palm Oil (RSPO), an eco-certification initiative. Following the survey, the environmental groups published a ‘palm oil guide’ where consumers could look up the palm oil content in the products they buy. The effort went beyond traditional labeling which allowed palm oil to be listed generically as ‘vegetable oil’ or ‘vegetable fat’.

Chart: Palm oil consumption in Norway.

According to Rainforest Foundation Norway, the campaign had an immediate impact — Norwegian food producers started to scale back on, or even phase out, palm oil. Stabburet, which was once one of the country’s largest palm oil buyers, banished palm oil from its products completely, while Mills, the largest buyer, cut use by 95 percent. The result so far is food companies in Norway have reduced palm oil buying by 9,600 metric tons, or 64 percent of last year’s 15,000 tons worth of palm oil. Per capita palm oil consumption in Norway is set to fall to just over 1 kilo per year.

The campaign only targeted food manufacturers, not fast food chains and restaurants, cosmetics producers, or animal feed makers.

Lars Løvold, Director of Rainforest Foundation Norway, said the campaign could be a model for other countries.

“Norwegian food producers have demonstrated that it is possible to produce and sell food without palm oil, avoiding complicity in rainforest destruction,” said Løvold. “The experience from Norway should inspire consumers globally to demand food products which do not contribute to rainforest destruction.”

Palm oil is the most productive of commercial oil seeds but its expansion in recent decades has taken a heavy toll on rainforests and peatlands in Indonesia and Malaysia, which account for nearly 90 percent of global production. Green campaigners have thus targeted major palm oil buyers in an effort to shift the industry toward less damaging practices. In response, the palm oil industry, working with some environmental groups, have set up the RSPO which sets social and environmental criteria for palm oil production. The hope is that buyers are willing to pay a slight premium for RSPO-certified palm oil. Still some activists have criticized the RSPO as not being strong enough and are campaigning for stricter safeguards.

The palm oil industry asserts its crop offers more oil per unit of area than other oilseeds, reducing the need to clear forests relative to other crops. But that argument has failed to win over environmentalists who note that forest clearing for oil palm plantations has not slowed and is now expanding to other parts of the world, including West Africa, Central and South America, Papua New Guinea, and the South Pacific.

Norway is one of the world’s largest supporters of tropical forest conservation. It has committed three billion Norwegian krone ($500 million) per year to slowing deforestation, including billion dollar pledges to Indonesia and Brazil for forest protection programs. The country’s pension fund nevertheless continues to invest in companies associated with forest conversion, a sore point for activists
.

 

Southeast Asian Haze: Who’s To Blame?

The Wall Street Journal – Just when it seemed safe to take a deep breath in Southeast Asia, the smoky haze that envelops the region each year is wafting up from Indonesian forests again.

Increasingly, though, experts aren’t just blaming Indonesians, who in the past have been accused of recklessly burning forest land on the islands of Sumatra and Kalimantan to make way for palm oil plantations – a practice that produces the smoke that then drifts northward over Singapore and Malaysia. Indonesian authorities have typically said they are doing their best to police the problem, which is hard to do given the country’s vast size and limited enforcement resources.

The question is whether other actors are fanning the flames, says Anthony Tan, executive director of the Centre for Environment, Technology & Development, Malaysia (CETDEM).

“The haze comes from Sumatra and Kalimanthan. Which companies own the estates? Malaysian and Singaporean as well as local plantation owners,” he said. As a result, “Malaysian and Singaporean companies in Indonesia also have to bear the responsibility of open burning, of slashing and burning, that is happening within their estate territories.”

Moreover, he added, “it is the respective governments’ responsibility to take them to task. Just because they operate in a foreign country, they can’t wash their hands and say it does not affect us” when it actually does.

The issue is flaring up again because the smoke, which tends to appear at least once a year, is intensifying again.

According to Malaysia’s Department of Environment, satellite images show the number of “hotspots” producing smoke in Sumatra increased to 122 on June 13 from 67 the day before. The image also showed haze drifting from Riau in central Sumatra en route towards the west coast of peninsular Malaysia. Satellite images released by the Asean Specialized Meteorological Centre on June 18 June showed hotspots in Sumatra had risen further to 310 from 163 the previous day.

Malaysia’s DOE also said that on the morning of June 15th, air quality readings in three areas reached an unhealthy level of 131. Air quality readings improved by Monday, June 18.

In Malaysia, at least, authorities agree that it’s not entirely Indonesia’s fault, and they say they are doing what they can to help alleviate the situation, including reducing burning within Malaysia’s own borders. The DOE has imposed a temporary ban on open burning in Kuala Lumpur and Selangor except for religious purposes and barbecues with a fine up to RM500,000 or imprisonment of up to five years or both.

Still, “from the trend of hotspots monitored through satellite imagery, it has always and clearly shown that most of the hotspots originated from Indonesia and (then) the smoke plumes trespass the neighboring countries,” a DOE official said in a written response.

That doesn’t necessarily address the issue of Malaysian companies operating in Indonesia, though. According to Indonesia’s embassy in Kuala Lumpur, as much as 25% of the palm oil plantations in the archipelago nation are owned by Malaysian companies. This is largely because scarcity of land in Malaysia has forced big plantation companies there to expand abroad.

Many of Malaysia’s biggest palm oil companies, including Sime Darby Bhd., IOI Corp. Bhd. and Kuala Lumpur Kepong Bhd., are members of the Roundtable On Sustainable Palm Oil (RSPO), which is dedicated to making palm oil production more environmentally-friendly, and which has a zero burning policy. Its members must be certified by RSPO as responsible producers. Moreover, many analysts say they doubt many of the biggest companies would want to engage in burning because it could be too detrimental to their reputations.

But last year, the London based Environmental Investigation Agency (EIA) and its Indonesian partner Telapak said they had documentary proof that KLK subsidiary PT Menteng Jaya Sawit Perdana was burning land. KLK denied the accusations. In a statement, plantation director Roy Lim said “KLK has long abandoned using fire to clear land for new planting or replanting. Our policy and practice is zero burning for such activities.”

Whatever the case, Indonesian officials say it’s hard to police an industry that covers so much terrain and they suspect some other producers might be burning land, or buying land from farmers who burn the trees themselves.

“Of course we don’t know who does it,” said Suryana Sastradiredja, an Information, Social and Cultural Affairs Minister-Counselor at the Indonesian embassy in Kuala Lumpur. But it’s hardly surprising some land owners would want to set fires, he says. After all, “burning is the traditional method – the cheapest way to open new land.”

EPA Underestimates Emissions from Palm-Based Biofuels

EPA Underestimates Emissions from Palm-Based Biofuels

By Alexandra Stark
Scientific and environmental groups announced that they will submit comments to the Environmental Protection Agency(EPA) in response to EPA’s proposed finding that palm oil should not qualify for inclusion in the EPA’s Renewable Fuels Standard (RFS) this morning.  While the organizations, including the Union of Concerned Scientists, World Wildlife Fund, the Natural Resources Defense Council, and the National Wildlife Federation, agreed with the EPA’s conclusion not to include palm oil, they argued that EPA’s analysis actually underestimates the greenhouse gas emissions of palm oil and the serious environmental problems that palm cultivation creates.

“The emissions of palm oil based biofuels substantially exceed the emissions from conventional petroleum diesel,” said Dr. Jeremy Martin, Senior Scientist at the Union of Concerned Scientists.

Despite the technical aspects of the decision, it may be one of the most critical climate and environmental decisions that the Obama administration will make, with thousands of square miles of rainforest, and the corresponding tons of greenhouse gas emissions, at stake.

The EPA’s deadline for comment submission is today, Friday, April 27, and has been pushed back twice due to lobbying from the palm oil industry.  The EPA invited comments in response to the EPA’s Notice of Data Availability (NODA), which analyzes palm oil used as a feedstock to produce biodiesel and renewable diesel.  EPA’s analysis found that palm oil-based biodiesel fails to meet the minimum qualifying standard of 20% fewer greenhouse gas emissions than conventional petroleum based diesel for the RFS, as well as the 50% greenhouse gas emissions reduction to qualify as a renewable diesel.

The EPA is under pressure to reverse this finding from lobbying groups aligned with the Indonesian, Malaysian, and Chinese palm oil industry, such as the American Legislative Exchange Council (ALEC) and other right-wing organizations that are ideologically opposed to the Renewable Fuels Standard, yet are contradictorily lobbying the EPA to include palm oil under the RFS government mandate.

“It is a disturbing development to see a politically motivated group like ALEC join forces with the shadowy palm oil lobby from Malaysia and Indonesia as well as with huge agribusiness companies Cargill and Wilmar to pressure the EPA to overturn what is supposed to be a science-based decision made in the best interests of the American people,” said Laurel Sutherlin, with the Rainforest Action Network.  “The question the EPA is tasked with answering is whether biofuels made with palm oil meet our nation’s greenhouse gas requirements as a renewable fuel. The stark reality of the impacts of palm oil plantation expansion in Southeast Asia, where nearly 90% of the world’s palm oil comes from, makes it clear that it does not.”

Rainforests are among the largest natural storehouses, or sinks, of carbon on earth and palm oil has quickly become one of the leading drivers of rainforest destruction in the world today, making palm oil production a globally significant source of carbon pollution.  Deforestation in Indonesia alone contributes more carbon to the atmosphere than all the transportation sector in the US combined.

Analysis of EPA’s assessment by scientific groups such as the Union of Concerned Scientists and the International Council on Clean Transportation found that in several important areas, EPA substantially underestimated the likely emissions of palm oil.  Primarily,  EPA’s analysis underestimates the extent to which palm oil expansion is occurring on peat soils, which leads to a substantial underestimate of heat trapping emissions. EPA bases its findings on the assumption that only nine percent of palm oil expansion will occur on peat land in Malaysia and 13 percent in Indonesia. However, a new report by the National Academy of Sciences, released today, says that 50 percent of oil palm plantations were established on peat lands through last year.  The study found that if oil palm expansion continues, with no restrictions on peat land development, almost 90 percent of palm oil’s greenhouse gas emissions will come from peat lands by 2020. EPA’s analysis also uses over-optimistic projections in a number of other places, including on yields.

“EPA should reject optimistic claims and projections that are unsupported by conclusive evidence” that they from industry and government bodies about coming improvements in yield, governance, land development policies and enforcement and palm oil mill operations, said Dr. Martin.

While the palm oil industry claims to embrace sustainability, its’ actions on the ground prove to the contrary:  in just the last few weeks, the palm oil industry moved into Sumatra’s world-famous Tripa swamp forest, home to one of the world’ densest populations of critically endangered orangutans. Plantation owners have purposely lit dozens of forest fires to clear the land, meanwhile sending the ultra carbon-rich peat soils into the atmosphere in a massive inferno – and killing an estimated one hundred of the world’s 6000 remaining Sumatran orangutans.

“The very month that the palm oil industry is burning and clearing the world famous carbon-rich Tripa forest, part of greater Leuser Ecosystem and its orangutans, they’re trying to browbeat the EPA into declaring this fuel so sustainable that they should qualify for a massive U.S. government mandate,” said Glenn Hurowitz, Climate Advisers Director of Campaigns. “I don’t think so. If the palm oil industry wants to actually reduce its environmental impact and qualify for this mandate, the solution is simple: end deforestation for palm.”

Clearing and burning of rainforests for palm oil plantations is one of the primary drivers of deforestation in Southeast Asia, and is one of the major reasons Indonesia is the world’s third largest global GHG emitter, just behind China and the United States.

EPA’s decision will have far broader influence than just the US biofuels markets. Other governments are looking closely at EPA’s findings as a basis for their own assessments of palm oil’s impact. In particular, Europe, which uses substantially more palm biodiesel than the United States, is currently assessing the shape of its own biofuels mandate.

“U.S. consumers should not be forced to fill their gas tanks with a fuel that is pushing species like orangutans and Sumatran tigers to the brink of extinction, is one of the world’s leading drivers of climate change, and whose production involves child and slave labor,” Hurowitz said. “Palm oil is so polluting that it manages to make even dirty old oil look like an environmentalist dream.”

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