Sawmill legality certificate revoked in forgery fiasco at heart of Papua oil palm mega-project

28.08.2020

A major sawmill complex linked to the world’s biggest palm oil project in Indonesia has had its mandatory timber legality certification revoked in light of official allegations of faked licenses.

Revocation of Tulen Jayamas Timber Industries’ (TJTI) legality certificate is the latest development in a long-running faked permits fiasco surrounding the sawmill and the entire Tanah Merah palm oil project it relies on for raw materials.

Without the certificate from Indonesia’s mandatory timber legality verification system (SVLK), the factory will no longer be able to export its ply and lumber. The shipments were expected to finance conversion of the surrounding forests into oil palm plantations.

TJTI, majority owned by notorious Malaysian logging multinational Shin Yang, was established to process $6 billion of tropical wood from clearance of 280,000 hectares (ha) of largely virgin forests in the scandal-hit Tanah Merah palm project in Boven Digoel, Papua province. 

The project was the focus of The Secret Deal to Destroy Paradise, a 2018 Earthsight investigation with Mongabay, through The Gecko Project which featured on the front page on Indonesia’s biggest investigative news magazine Tempo. The probe revealed permits were issued from behind bars, violence against indigenous landowners, and the use of fake nominees to hide the involvement of politically powerful individuals.

The Tanah Merah project is the world's largest palm oil development and could see 280,000 hectares of forest converted in Papua, Indonesia.

In November 2019 Earthsight alerted timber auditors at certification firm PT Borneo Wanajaya Indonesia (BWI) to an official “stop work order” imposed on the sawmill the same month. The sawmill stop work order was issued by officials at Boven Digoel’s Investment Coordinating Office after they concluded that the sawmill’s environmental licence had been faked.

The following month, environmental news website Mongabay and The Gecko Project published credible allegations from relevant Papuan officials that the permits for the oil palm plantations supplying wood to the sawmill had also been faked. Earthsight then also alerted the legality auditors which had certified the logging operations supplying the sawmill to these new allegations.

Following nine weeks of correspondence, on 27 January 2020 BWI auditors finally told Earthsight they would undertake a “special audit” into the faked plantation permits and the faked environmental licence. Auditors for the plantations, PT Inti Multima Sertificasi (IMS), also pledged to conduct a special audit into the alleged faked plantation permits. Earthsight published details of both pledges in February 2020.

BWI’s pledged “special audit” did occur in late-March 2020, and on 16 April assessors announced they had suspended certificates of legal compliance for TJTI’s sawmill for three months, citing the faked environmental licence and stop work order as justifications. The audit report details that further correspondence between BWI and Boven Digoel’s Investment Coordinating Office from 1 to 12 February 2020 had confirmed that TJTI’s environmental licence was judged to be fake.

BWI’s suspension gave TJTI the opportunity to retain a valid certification if it was able to demonstrate its environmental licence was legally issued by relevant officials by 16 July. 

The PT IMS’ website now states the sawmill’s certification was revoked on 17 July, indicating TJTI was unable to evidence it had a legally issued environmental license.

The Tulen Jayamas Timber Industries sawmill in Papua has had its SVLK certification revoked.

The sawmill is a key factor in the Tanah Merah plantation project, the biggest single threat to Indonesia’s forests in recent years. The large complex was established as a joint venture involving the same companies clearing the surrounding forest. Sales of timber from it were expected to finance the entire development. With those sales now blocked, the project’s future may be in doubt.

Forest advocates have argued that the project represents a key test for the Indonesian government’s commitment to halting deforestation and associated climate emissions, and whether key policies are working. These include the country’s much vaunted timber and palm oil legality certification schemes, its beneficial ownership laws, and a promised review of oil palm plantation permits across the country.

It remains unclear, however, whether the action taken by timber legality auditors will prove to be the first step towards the cancellation of the entire project campaigners and local activists have been calling for.

The decision prevents TJTI from legally exporting timber products, because all such exports require verification under the SVLK scheme. But it may still be able to sell timber domestically, and the timber legality audits have yet to fully explore the arguably more serious forgery allegations regarding permits for the plantations supplying the mill.

Though two of the plantations supplying the mill - PT Graha Kencana Mulia (PT GKM) and PT Megakarya Jaya Raya (PT MJR) - also had their legality certificates suspended by IMS’ auditors (in July 2019 and March this year respectively), this was due to the expiry of annual logging permits. IMS’ audit reports made no mention of the faked permit allegations which emerged last December. BWI’s March 2020 special audit report on the mill makes no mention of the alleged fake oil palm plantation permits.

Satellite imagery shows 250ha of forest within PT MJR was cleared rapidly between 8 December and 26 January 2020, while fresh logging roads were also driven through forest at PT GKM at the same time. It is unclear whether PT MJR and GKM have acquired new logging permits, or if they have engaged PT IMS to audit them again.

Road expansion takes place within the Tanah Merah development, March 2020.

It is also unclear if TJTI’s sawmill has stopped operating, despite its revoked legality certificate and the official imposition of a stop work order.

The revocation of TJTI’s sawmill certificate represents some progress. But clearly, if the SVLK is to be deemed credible more needs to be done by auditors and government officials charged with verifying the legality of the country’s biggest oil palm linked timber operation.

The allegations of the faked permits underpinning major certified timber operations that broke in late 2019 indicated that what could be the world’s biggest illegal logging operation had been officially certified legal under Indonesia’s flagship timber verification scheme. 

Despite the plantation permit forgery allegations coming from the very officials purported to have issued them, seven months after they were made public no government officials are known to have yet formalized or progressed a legal complaint about the plantations. 

Other Indonesian government agencies with relevant responsibilities, including the Ministry of Forestry and Anti-Corruption Agency have also remained disappointingly silent about the scandal-wracked project.

Only time will tell if Indonesian officials will eventually bring real justice to the affected area and halt the bulldozers once and for all.

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