Case Study 6: Mimika, PT Prima Sarana Graha

Issues of potential concern:

• Exploiting loophole in Oil Palm Moratorium • Violation of forest release regulations • Abandoned concession • Violation of and changes to Forest Moratorium

On 30 August 2019, nearly one year after the Oil Palm Moratorium came into force, Siti Nurbaya’s ministry released 21,082 ha of forest estate in Mimika Regency to PT Prima Sarana Graha (PT PSG) for an oil palm plantation, for which the company had been issued a location permit in 2012. The same decree also released 52 ha for sports facilities in the same area.400

PT PSG was in possession of an inprinciple approval for forest release, which means that a company can apply for a forest release decree once all conditions have been met. This approval had been issued by Zulkifli Hasan on 25 September 2014 – during his last week as minister, when he issued a large number of permits, decrees and approvals throughout Indonesia, including for many of the companies featured in this report.

PT PSG Forest Estate Map

400 Permit (map) reference: SK636/Menlhk/Setjen/Pla.2/8/2019. This concession is shown on maps of areas released from the forest estate on the MoEF WebGIS service, http://geoportal.menlhk.go.id/arcgis/home/webmap/viewer.html?webmap=0387032be5f648f99f8be9ba30f4d2ca.

PT PSG also possessed an environmental permit, issued by the Governor of Papua on 26 August 2014. As such it met one of the main requirements under the 2018 Ministerial Regulation on Procedures for Releasing Forest Estate Land.401 However, our investigations have not been able to show that the issuing of an environmental permit was followed by the issuing of an IUP. PT PSG is not named on any of the lists of companies possessing an IUP provided by the provincial government in response to data requests from Greenpeace Indonesia, including the most recent list, sent by the Provincial Plantation Agency on 22 July 2020. The apparent failure to obtain an IUP for five years after obtaining an environmental permit should have raised concern at the ministry that PT PSG may have been unable (or not intending) to develop its concession, leading to a risk that the area released would be abandoned.

In any case, the release of forest by Siti Nurbaya’s administration did not comply with the regulation then in force because it exceeded the 20,000 ha limit on how much land could be issued to a single company or group at one time.

As regards the compatibility of the forest release with the Oil Palm Moratorium, in the forest release decree for PT PSG, the MoEF justifies its action by stating that it is only instructed to apply the moratorium if applications for forest release have not reached the stage of boundary survey (tata batas), which in PT PSG’s case took place in November 2016. This is nevertheless an important loophole in the moratorium (see discussion in Part 2 of this report). The concession is mostly marked as secondary forest on national land cover maps, meaning that most of it is unaffected by the Forest Moratorium, which prohibits only the issuing of new permits on primary forest and peatland. However, there is a small area of primary swamp forest within the concession, which was still included within the moratorium map when PT PSG obtained its location permit from the Bupati of Mimika Regency, Klemen Tinal, in 2012, meaning that the issuing of the location permit violated the Forest Moratorium. Since then, this primary forest has gradually been removed from the Forest Moratorium map in the course of its third, fourth and seventh revisions – the last of these after the company had already been given in-principle approval for forest release. The area is nevertheless still shown as primary forest on the latest (2019) land cover map. The forest release decree itself refers to an area of 118 ha of primary swamp forest in the concession, which appears to correspond to the area removed from the moratorium map.

PT PSG 2019 Land Cover Map

PT PSG is part of the Mega Masindo Group, owned by Paulus George Hung, a timber baron from Malaysia who owns several logging concessions throughout West Papua. Although his name appeared on a list of operatives suspected of illegal logging targeted by a 2006 crackdown, and he was reported to have been declared a formal suspect, he was able to avoid prosecution and re-establish himself in the logging business, reportedly changing his name from Ting Ting Hong and taking Indonesian citizenship.402 A source inside the Ministry of Forestry reportedly told Tempo magazine in 2011 that Hung obtained new logging permits after several meetings to lobby then Minister for Forestry Zulkifli Hasan.

The Mega Masindo Group is not known to operate any oil palm plantations, but prior to her 2019 granting of forest release to PT PSG, in 2015 Siti Nurbaya’s administration had already granted forest release for oil palm plantations to two other companies in the group: PT Papua Lestari Abadi and PT Sorong Agro Sawitindo, both with concessions in Sorong Regency, Papua Barat Province. To date, neither company has developed its concession.

Greenpeace Indonesia has also been unable to find any reports from local Indigenous groups or in the media that PT PSG has been active on the ground since 2014, and therefore suspects that its concession may be abandoned. This lack of activity on the part of both PT PSG and its sister companies in Papua Barat casts doubt on whether the Mega Masindo Group has a serious intention to develop plantations. However, PT PSG’s concession is located very close to Timika City, the town which services Indonesia’s largest mine, the Grasberg gold and copper mine, and therefore attracts a certain wealth. As a result, developable land near the city and outside the forest estate constitutes a potentially valuable asset.

The city’s expansion plans have already started to encroach onto the concession. In February 2019, several months before the forest release decision was signed, the local government reportedly met with the MoEF because some of the land included in the in-principle forest release approval issued to PT PSG was needed for a sports complex.403 However, when Siti Nurbaya’s administration decided to release 52 ha of land for this sports complex, it is not clear why the same moment was chosen to release 21,082 ha for a plantation, on the basis of an in-principle approval issued nearly five years previously.

402 Tempo.co (2011a) 403 Djuma A (2019), Seputar Papua (2019)