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Ministry appeals court rejection of BMH lawsuit

JAKARTA -- The Indonesian government is challenging a court ruling that has freed a plantation company from a 7.9 trillion rupiah ($568 million) lawsuit, despite "strong indications" that it is partly responsible for Indonesia's annual fire and haze crisis -- which reached their worst on record last year.

     The company, Bumi Mekar Hijau, is a supplier of Asia Pulp & Paper, one of the world's largest pulp and paper producers and a core subsidiary of Indonesian conglomerate Sinar Mas Group.

     On Dec. 30, the district court in Palembang, South Sumatra, where BMH operates, rejected the government's lawsuit on the grounds that it had failed to provide evidence that BMH had been responsible for fires that engulfed 26,000 hectares of land within its acacia plantation concession in 2014.The Indonesian government, through the Ministry of Environment and Forestry, filed the civil lawsuit to the district court after the fire and haze crisis in 2014, demanding that BMH pay a total of 7.9 trillion rupiah to compensate for the government's fire emergency expenses and to rehabilitate forests destroyed by the fires.

     Eka Widodo Sugiri, spokesman of the ministry, said it lodged the appeal to South Sumatra's provincial court on Wednesday, while engaging in talks with the Supreme Court in an attempt to ensure better legal outcomes in the future.

     "We hope only judges with good environmental awareness are appointed to handle environment-related cases," Sugiri told the Nikkei Asian Review on Wednesday.

     He added the ministry decided to appeal the Palembang court's verdict because it had found "strong indications" that BMH was guilty of setting fires in its concession in South Sumatra in 2014 and 2015.

     In August and September last year, for example, satellites images showed 1,173 fire hotspots in South Sumatra. Most of them, Sugiri said, were located inside BMH's concession.

     Whether or not BMH was guilty of igniting the fires, they happened inside the company's concession and therefore should be under its responsibility, he said.

     "Appealing this verdict is part of the government's responsibility to protect the people and the environment," said Sugiri.

     "And this is also about upholding our dignity before the international public, because impacts of the fire and haze crisis were not only felt in Indonesia, but in neighboring countries as well."

     The Dec. 30 verdict came following the government's announcement that it was slapping sanctions on 23 local companies it deemed guilty of involvement in igniting fires on Sumatra and Kalimantan, and in creating a smog that covered large swathes of Southeast Asia between August and November 2015.

     The World Bank estimated in November that the economic cost of the fire and haze crisis to Indonesia alone this year will exceed $16 billion, or about 1.8% of the country's gross domestic product.

     Ignoring critics, however, the government only released initials of the sanctioned companies, some of which -- including BMH, which only became known due to the government's ongoing legal action against it -- are believed to be affiliated to large corporations.

     BMH is among 16 companies whose licenses are frozen. Three companies have had their licenses revoked, while four have been ordered to clean up their operations in the Indonesian government's largest crackdown so far on companies responsible for the annual fires and haze.

     Sugiri said that the government is also in the process of gathering documents to bring several other companies to court under separate civil lawsuits. Activists, though, remain skeptical that there will be major changes in law enforcement, citing the Palembang court's verdict on BMH as a "bad precedence" for the government's legal moves against other companies.

     "The recent verdict should serve as a lesson to the government, that we cannot rely on law enforcement institutions to uphold the law. They have instead become a safe haven for forestry criminals in Indonesia," said Zenzi Suhadi of the Indonesian Forum for the Environment (Walhi), citing corrupt police officers, prosecutors and judges.

     He suggested that the government be firmer in enforcing its punishments for companies. "The government shouldn't just freeze, but revoke licenses of those [responsible for fires and haze]."

     Asia Pulp & Paper, in response to the government's lawsuit, said it "fully respects" Indonesian law and the ongoing legal process.

     The company stressed that although it sources pulpwood from BMH, the supplier is "independently owned and operated." APP added that it will drop any supplier found to have breached its "zero burning" supply chain policy.

     "APP takes the issue of forest fires seriously," a company representative told the Nikkei Asian Review. "We are committed to working closely with suppliers to build firefighting and fire prevention capacity and support practices that promote fire-free concessions." 

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