Watchdog groups want Indonesian President Joko Widodo’s government to investigate permits for the Tanah Merah project, whose owners are shrouded in secrecy.
The Indonesian government must put an immediate halt to land clearing in the Tanah Merah project, a vast stretch of land in Papua earmarked to become the world’s biggest oil palm plantation, environmental advocates and anti-graft watchdogs say.
Spanning 2,800 square kilometers, the land sits at the heart of one of the world’s last great tracts of unbroken rainforest, on the giant island of New Guinea.
Only 2% of the land has been cleared, but if the entire project area is cleared as planned, it will release as much carbon as the US state of Virginia does annually by burning fossil fuels.
Well-placed observers argue the project is clearly intended to benefit the cabal of wealthy and connected individuals who have coalesced around it, and will fail to deliver development to the indigenous Papuans living in its shadow. They are calling on Indonesian authorities to cancel the licenses underpinning the project, or subject them to special scrutiny as part of an ongoing review of existing permits.
Maze of secrecy
The Tanah Merah project was the subject of a joint investigation published last month by Mongabay, The Gecko Project, Tempo and Malaysiakini. The article revealed how ownership of the project has been concealed by a maze of shell companies, front shareholders, fake addresses and offshore secrecy jurisdictions, making it impossible to tell who will benefit from the destruction of the rainforest in Boven Digoel district, Papua province.
Even local government officials are in the dark about who is behind the project, which was approved during a chaotic period in the district. Some of the permits for the project were issued by a politician who was in jail at the time on unrelated charges of corruption, for which he was later convicted.
“The forests of Boven Digoel are immensely important to the indigenous people[s] of New Guinea, whose culture and livelihoods depend on the bushmeat, sago and fruits the forests provide and its clean flowing rivers,” Gemma Tillack, forest policy director at the Rainforest Action Network (RAN), said in an e-mail. “The region is also a global biodiversity hotspot with species found nowhere else on Earth.”
She called the Tanah Merah project a “scandal” that “reveals how Indonesia’s rainforests and communities are being sacrificed for the greed of overseas investors and corrupt politicians, pretending to be promoting development.”
‘Frontline of global extinction’
Indonesia is the world’s top producer of palm oil, an edible oil found in countless consumer products as well as biofuels. At the same time, the country has lost more tropical forest since the turn of the century than any nation but Brazil, largely a result of unbridled plantation expansion. This deforestation has catapulted Indonesia up the ranks of the world’s top greenhouse gas-emitting countries and put it on the front lines of the global extinction crisis.
“Far too often these problems are treated as though they are caused by a group of rogue individuals on the ground,” said Eleanor Nichol, campaign leader at Global Witness, an international NGO that campaigns against corporate secrecy.
“The reality … includes a handful of incredibly powerful and well-resourced multinational companies and elite businesspeople, who hide their identities behind anonymous companies incorporated in secrecy jurisdictions like the Cayman Islands and Singapore. This anonymity allows these people to finance wide-scale destruction of climate-critical rainforests without scrutiny or consequence.”
The identities of some of the investors behind the Tanah Merah project have come to light. Malaysian logging firms Shin Yang and Rimbunan Hijau have stakes in the project. Shin Yang is a major shareholder in the sawmill under construction, and Rimbunan Hijau is a minor shareholder in a company with land for a plantation.
Another shareholder is Chairul Anhar, secretary general of the Indonesia-Malaysia Business Council. And another is Desi Noferita, whose brother, Edi Yosfi, is known as a powerbroker in the National Mandate Party, or PAN, an influential Indonesian political party.
The billionaire Saeed Anam family of Yemen has also been linked to the project, although representatives of the family’s conglomerate, the Hayel Saeed Anam Group, deny involvement.
Most of the companies with land for a plantation in the project are owned by holding companies registered to secrecy jurisdictions in the Middle East or Singapore, making it impossible for observers to identify the true shareholders.
“We need to call time on anonymous companies,” Nichol said. “This year the UK demanded its Overseas Territories open up, and all EU member states are about to introduce public registers of the real owners of anonymous companies, so they won’t be anonymous any more. The rest of the world needs to follow suit.”
In March, Indonesian President Joko Widodo issued a regulation giving companies one year to disclose the identities of their “beneficial owners” to the government, although in a young democracy like Indonesia it is not certain that such a regulation will be enforced.
“This case is a clear example of why enforcement of the new regulations on beneficial ownership is so important, to ensure that whoever is behind a project like this is held to account,” said Arie Rompas, a forest campaigner with Greenpeace Indonesia. “If the license review process promised by [Indonesian President Joko] Widodo’s government through the palm-oil moratorium is to be credible, concessions such as these must be revoked.”
Review of permits
In September this year, President Jokowi, as he is popularly known, declared a freeze on the issuance of new permits for palm plantations and ordered a review of all existing permits. Phil Aikman, campaign director for Southeast Asia at Mighty Earth, called the Tanah Merah project a “case in point” of why the moratorium on new permits “didn’t go far enough.”
“The moratorium should also have applied to rainforest and peatland areas in existing concessions, such as those held by shady shell companies in the Boven Digoel district in Papua,” he said.
Permits issued for palm plantations across Papua, including in Boven Digoel, are marked by “many irregularities” and a “lack of transparency,” said Mufti Ode, of Forest Watch Indonesia.
“The impact is that many companies have emerged who only want to seize natural resources without regard to environmental conditions and the rights of indigenous peoples,” he said. “Companies proven to have violated the licensing process and who fail to recognize the existence and rights of the people must [have their licenses] revoked.”
Eric Wakker, co-founder of sustainability consultancy Aidenvironment, called for the Indonesian government to issue a stop-work order on development within the project and to review the permits underpinning it.
“Given its history, to me it is clear that this Tanah Merah problem is the governments’ of Malaysia and Indonesia to sort out, which minimally begins with a stop-work order and subsequent transparent review of the issued permits,” he said. “The current governments are in power because people voted for clean development, so that means they must be seen to undo previous governments’ mistakes as well.”
He said he hoped Indonesia’s anti-corruption commission, the KPK, would take a look at the Tanah Merah project, and even work with Malaysia’s anti-graft agency, the MACC, which is “now much more free to operate than previously” after the ouster of former prime minister Najib Razak’s government this year.
“Of course, this is not to deny Papuans the right to development but this project isn’t the way to deliver that to them,” Wakker said.
Tillack, of RAN, called on “any banks, investors or consumer good manufacturing companies connected to actors behind the Tanah Merah project” to “immediately cut ties” with them. She noted that Unilever and Nestlé, two of the biggest palm oil users, had already stopped buying from the Hayel Saeed Anam Group.
“As the world’s leaders unite in Poland to solve the climate crisis, we must call on political leaders to do what they can to ensure that the Tanah Merah project does not proceed,” she said.
“If we lose this fight, if Shin Yang builds its giant sawmill, we will not only lose virgin rainforests that are the thriving heartbeat of Indonesia, we will lose the one chance we have to limit temperate increase to 1.5 degrees Celsius and stabilize our climate.”