Independent audit reveals Indonesia’s biggest palm oil project still hidden from RSPO

Tuesday, July 23rd, 2019

HSA Group has denied ties to contentious mega-project to clear 2800 km² of jungle, but new Earthsight research shows staff links between Yemeni firm and the Papua project, where satellite imagery reveals fresh land clearances.

An audit of the world’s biggest palm oil development has revealed it is staffed by people who Earthsight have linked to the commodities trader Hayel Saeed Anam Group (HSA) and its palm oil subsidiary, Pacific Inter-Link (PIL). Both companies have repeatedly denied involvement in the project in filings to the Roundtable on Sustainable Palm Oil (RSPO), a palm oil sustainability certification body of which PIL is a member.

PT Megakarya Jaya Raya (PT MJR), one of seven 40,000-hectare concessions making up the controversial Tanah Merah project, had its timber permit audited by an Indonesian firm in April 2019. In their review, auditors name staff associated with the concession, among them Ferdinando Walangare and Kiki Erizzal Cahya Merta.

Walangare is listed as proxy director and Merta is the health and safety officer at PT MJR according to the audit. However, social media accounts suggest that Merta is an HSA employee and Walangare works at a subsidiary of HSA.

These new ties to HSA raise fresh doubts about the Yemeni commodity trader’s denials that it is involved in Tanah Merah.

PT MJR is the most developed palm oil concession in the controversial project, which plans to carve out of 2,800 km2 of rainforests in Papua’s remote Boven Digoel district.

The project was the focus of The Secret Deal to Destroy Paradise, Earthsight’s 2018 collaboration through The Gecko Project with news outlets Tempo and Mongabay. The story exposed how the project was mired in secrecy, that key permits had been issued from a prison cell by an official jailed for corruption, and that indigenous land-owners had been beaten into submission.

In October 2018 Greenpeace and the Environmental Investigation Agency (EIA) presented a dossier of evidence to the RSPO claiming that four of the concessions – including PT MJR –  are owned by Pacific Inter-Link (PIL), the palm oil arm of HSA.

If PIL’s involvement in clearing the Papua forest were confirmed, it could potentially result in the firm being ejected from RSPO, as well as being permanently blacklisted by many of the world’s largest palm oil buyers.

Deforestation in the Tanah Merah project. Image by Nanang Sujana for Earthsight.

PIL and HSA have consistently denied their involvement.

Both argue that previous claims on their websites to have controlling stakes in over 160,000 hectares of concessions in Indonesia were “a mistake”, and that while they had explored the possibility of buying the land, in the end they had chosen not to.

PIL and HSA claim that the directorships in the Tanah Merah concession firms formerly held by its executives were ‘purely honorary’ and held in a ‘personal capacity’.

Final proof either way remains elusive, as the four Papua concessions are now majority-owned by holding companies in the secretive jurisdiction of the United Arab Emirates.

RSPO is investigating EIA and Greenpeace’s complaint, but progress has been slow.

“There has been very little progress made by the RSPO on the complaint submitted by ourselves and Greenpeace,” Siobhan Pearce, palm oil campaigner at EIA, told Earthsight. “PIL requested we sign a Non-Disclosure Agreement despite this being contrary to the RSPO complaint procedures. As yet the RSPO has failed to respond, nor has it advanced the case.”

As PIL and HSA Groups’ executives continue denying any involvement in Tanah Merah, social media posts by two of those named in the independent audit of PT MJR point to a different reality.

One of Walangare’s LinkedIn pages states he is the “Government Relation and PR Director For Group at PT.Pacific Indomas Group” – a company in turn historically owned and controlled by PIL, the RSPO member subsidiary of HSA.

He is also listed as “proxy director” of PT Garaha Kencana Mulia in a 2018 audit of its forest clearance activities by the same auditors. PT GKM is among the four concessions believed to be HSA-controlled.

It is unclear when Walangare updated his LinkedIn page, but Merta’s Facebook posts came months after PIL and HSA formally denied involvement in the concessions in mid-2018.

On 14 January 2019 Merta announced on Facebook that he “started new job at HSA Group” as its “Sustainability Coordinator”. The post’s location says it was written in Boven Digoel, Papua. His profile declares he lives in Tanah Merah – the location of PT MJR’s plantation.

Meanwhile, analysis by Earthsight of satellite images reveals that intact forests continue to be cleared. After the Secret Deal story made the front pages in Indonesia in late 2018, the bulldozers fell silent for months – the longest hiatus since the project broke ground in 2015.

Persistent cloud cover has obscured developments since. However, using radar imagery Earthsight detected that 300 hectares of clearance has occurred in PT MJR since May 2019. The wood produced will likely feed the large plywood factory recently opened nearby. SVLK auditors were due to visit it just last week.

Satellite Image (10 July 2019) with yellow line showing clearance in the PIL concessions up to January 2019. Red line denotes fresh clearance in PT MJR between May and July 2019.