- A Jakarta court has sentenced palm oil tycoon Surya Darmadi to 15 years in prison for corruption in establishing an illegal palm oil plantation in Indonesia's Riau province.
- The court also ordered him to pay more than $2.7 billion in fines and compensation for environmental and social damage caused by illegal plantations, in what is believed to be the most expensive corruption case in Indonesian history. commanded.
- Surya fled Indonesia in 2014 after being charged in a separate corruption case and only surrendered to authorities last year.
- Palm oil from his plantation was exported to six countries: India, Malaysia, Netherlands, Kenya, Italy, and Singapore.
JAKARTA – An Indonesian court has sentenced palm oil billionaire Surya Darmadi to 15 years in prison for his role in the biggest corruption scandal in the country's history.
The Jakarta Anti-Corruption Court ruled on February 23 that in 2004, Surya colluded with Raja Tamsir Lakman, the elected leader of Sumatra's Indragiri Fur district, to obtain a plantation license for Surya's company PT Duta Palma. I put it down. Surya was also found guilty on money laundering charges.
The court also ordered Surya to pay a fine of 1 billion rupiah ($65,600) and compensation of 2.23 trillion rupiah ($146,000) for the profits he made from his illegal plantations. The judges also ordered Surya to pay an additional 39.7 trillion rupiah ($2.6 billion) for losses incurred by the state.
Tamsir Rahman is currently on trial in the same case and could be sentenced to up to 10 years in prison if convicted.
There were mixed reactions to the verdict in Surya's case, in which prosecutors sought a life sentence and a total fine of 86.55 trillion rupiah ($5.7 billion). This figure, which prosecutors say represents the total cost to the state from the scheme, makes it Indonesia's costliest corruption case.
The Indonesian Environmental Forum (Wari), the country's largest environmental NGO, criticized the ruling as too lenient and not commensurate with the environmental damage caused by illegal plantations.
“The time it takes to repair the environmental damage caused by illegal plantation activities is longer than a prison sentence,” said Uli Arta Siajian, Warkhi Forest and Farm Campaign Manager.
He also pointed out that the illegal plantation had been in operation for 18 years since 2004, meaning the sentence was also shorter than the age of the plantation.
However, Reynaldo Sembiring, executive director of the Indonesian Center for Environmental Law (ICEL), said the ruling should be seen as a measure of justice.
“This is probably the biggest loss to the state.” [from corruption] in the natural resources sector,” he told Mongabay.
Hendro Dewanto, Director of Public Prosecutions at the Attorney General's Office, also welcomed the ruling, especially the court's order to compensate Surya for the damage caused to the country.
“The burden is [to pay for the state loss] The defendant is fully responsible.” “This is important in encouraging government efforts to improve the management of the palm oil industry.”
The billionaire who burned the forest
Under the 2004 agreement with Tamsir Rahman, Surya has five subsidiary companies to set up oil palm plantations covering a total of 37,000 hectares (91,000 acres) of forest land in the Indragiri Hulu district (an area half the size of New York City). I got permission.
Under Indonesian law, the forest is off-limits to oil palm plantations. However, this did not stop deforestation and oil palm cultivation. Palm oil from these plantations was reportedly exported to countries such as India, Malaysia, the Netherlands, Kenya, Italy, and Singapore.
The court found that Surya had been profiting from this illegal operation for nearly 20 years, and that the plantation was generating about 600 billion rupiah (approximately $39 million) in monthly income. In 2016, we were ranked by a local business magazine. globe asia He is the 28th richest individual in Indonesia with a net worth of $1.45 billion.
However, Surya's rise came at a great cost to others. Plantations have left a trail of environmental and social destruction, disenfranchising indigenous communities, damaging forest ecosystems, and causing losses to the nation.
Environmental groups have long documented abuses by Surya's oil palm companies, including the use of illegal fires to clear land for tree plantations.
Two of Surya's companies operate in tropical peatlands, known as one of the most efficient land-based carbon stores on Earth. Each hectare can store up to 20 times more carbon than a rainforest.
Legal permission for illegal plantations
The judges, who opted for a more lenient sentence than prosecutors had sought, pointed to what they called a mitigating factor: two of Surya's companies had cultivation permits, known as HGU permits. These permits are the final set of licenses a company needs to obtain in order to establish a plantation.
This meant that a significant portion of the state's alleged losses would not be considered in the final judgment.
However, prosecutors pointed out that the process of obtaining HGU's license was illegal. Bambang Hero Saharjo, a forestry lecturer at Bogor Agricultural University (IPB) who testified as an expert witness for the prosecution, said HGU licenses can only be issued after a company has obtained a forest release permit. These permits are required to re-designate land from forest to non-forest, making it legal to establish oil palm plantations there.
“So, even if there are some, [of Surya’s] The company has an HGU license and its status [of the land] is still a forest area,” Bambang Herro said as quoted by news agency Betahita.
However, the judges said that even though the process of obtaining HGU's permit was illegal, the permit itself remains valid unless revoked by the government.
Surya decided to appeal against the verdict. His lawyer, Juniver Gilsan, said the court should have addressed how the government would address the issue of illegal plantations in forest areas through a so-called omnibus law on job creation.
The law, passed in 2020, ushered in a wave of deregulation across a wide range of industries, including rolling back environmental protections and encouraging extractive industries such as mining and plantations, with the aim of attracting investment and creating jobs. One of the Omnibus Law's key concessions to the palm oil industry effectively legalizes the crime of illegal plantations in forest areas. The law gives the plantation operator his three-year grace period to obtain and pay the appropriate permits, including re-designation of forest status. Imposing the necessary fines and allowing businesses to resume operations.
“The law clearly states that encroachment into forest areas should not be subject to criminal sanctions, but instead administrative sanctions and fines,” Juniver said, as quoted by CNBC Indonesia. Stated.
Surya also criticized the court process, saying the failure to apply the omnibus law to his case denied him justice.
“My case became a pilot project [since] Omnibus law has not been enforced [to legalize my plantations]” he said in a statement before the judge read the verdict. “Why am I the only one like this?” [criminally] While others with similar cases have not been treated? ”
fugitive from justice
ICEL's Reynaldo said Surya's prosecution was based not only on the illegality of his plantation, but also on the fact that he engaged in corruption and money laundering to obtain illegal licenses.
In 2014, anti-corruption investigators charged Surya with bribing Anas Mamun, governor of Riau province, Indragiri Hulu district, in connection with an oil palm plantation. The 3 billion rupiah ($200,000) payment was allegedly aimed at getting Anas to amend forest ordinances to benefit Surya's company Duta Palma.
Annas was sentenced to seven years in prison for bribery, but was released in 2019 after being pardoned by President Joko Widodo. Surya ran away from police in 2014 and remained on the run for eight years.
Authorities tried to prevent him from leaving the country, but he managed to reach Taiwan. Subsequent efforts to repatriate Surya were continually thwarted, with Surya claiming health problems.
The fugitive decided to return to Indonesia in August 2022 when the Attorney General filed new charges against Surya in connection with Tamsir Rahman's bribery. He arrived in Jakarta on August 15 and was arrested by AGO officials.
Reynaldo said the corruption court's ruling would force prosecutors in similar cases to go beyond administrative violations that plantation companies may have committed to criminal acts “including corruption, human rights violations, forest fires, and money laundering.” He said he would urge an investigation into the matter.
The ruling should also prompt the Ministry of Environment and Forestry to reject pending requests from Surya companies to legalize operations within forest areas, Reynaldo said.
“It's important to see that these companies are not granted amnesty, because the court's decision clearly shows that this is a big problem and an unusual crime,” he said.
The ministry's head of forest acreage allocation, FX Herwirawan, told Mongabay that the request from Surya's company would be put on hold pending an appeal in the criminal case.
Dirty palm oil leaks overseas
During the trial, it was revealed that palm oil from Surya's illegal operations was flowing into global supply chains. Agus Sudarmadi, head of the Treasury Department's Customs and Goods Bureau, testified in December that export records from 2010 to 2021 showed palm oil was exported to six countries: India, Malaysia, the Netherlands, Kenya, Italy and Singapore.
He added that his office does not have the authority to trace the source of palm oil back to plantations.
Made Ali, executive director of Riau-based environmental NGO Jikalahari, said the revelations made Surya's case a transnational case.
He noted that the Netherlands and Italy, as members of the European Union, have agreed to halt deforestation and trade in products such as palm oil from illegal sources under a deforestation law expected to be passed this year. .
“When the European Union protests, [against dirty commodities] New law bans all exports from Indonesia to Europe [that aren’t sustainable or legal]our palm oil [still] It comes from deforestation,” Maid Ali said. “Maybe we can push Europe to set higher standards for traceability.”
Banner image: An aerial view of Surya Dalmadi's Duta Palma oil palm plantation in Riau province. Image courtesy of Greenpeace.
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