Indonesia flags fires at concessions of six Malaysian planters

This article first appeared in The Edge Financial Daily, on October 3, 2019.
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KUALA LUMPUR: The Indonesian government is investigating fires at concessions belonging to six Malaysian planters in the country.

A statement by the ministry of environment and forestry dated Sept 25 said the companies included Ahmad Zaki Resources Bhd’s PT Ichtiar Gusti Pudi, and Kuala Lumpur Kepong Bhd (KLK)-linked PT Menteng Jaya Sawit Perdana and PT Adei Plantation and Industry.

Meanwhile, PT Sime Indo Agro, linked to Sime Darby Plantation Bhd, TDM Bhd’s PT Rafi Kamajaya Abadi, and Silver Investments Ltd’s PT Kebun Ganda Prima were also on the list.

“Legal proceedings are being conducted against 55 concession holder companies and one individual,” the statement read.

Of the six Malaysia-linked companies mentioned in the statement, TDM’s Rafi Kamajaya Abadi had the largest affected area, with 600ha identified in West Kalimantan.

In total, some 19 foreign-owned companies were listed by the Indonesian government — with seven Singapore-linked companies and a Hong Kong-linked company named.

According to the statement, some 10,076ha were affected.

At press time, queries submitted to TDM by The Edge Financial Daily were left unanswered.

Meanwhile, a spokesperson for KLK said it had nothing new to add to its Sept 14 statement on the matter.

It had then confirmed a fire hotspot affecting 2.8ha of PT Adei Plantation and Industry’s 14,400ha estate. It also confirmed that 4.25ha of the estate, including an isolation area, had been sealed off for ongoing investigations by local authorities in Indonesia.

According to the Sept 25 statement from the ministry, the fire in PT Adei Plantation and Industry’s estate is under investigation.

KLK said it maintains a zero-burning policy and that it has fully equipped firefighters at its estates who undergo yearly certified training and patrol the estate’s area vigilantly.

Meanwhile, Bernama reported yesterday that the Malaysian Palm Oil Association chief executive Datuk Nageeb Wahab said that Malaysian oil palm companies, especially members of the Roundtable on Sustainable Palm Oil (RSPO), had stopped practising open burning since 1985, way before the establishment of the RSPO in 2004.

He said companies like KLK, Sime Darby Plantation and Genting Plantations Bhd had replaced open burning with another method that involves chipping of oil palm trees.

“Instead of burning [them], they chipped the trees and spread [them] out so [they] become biomass (fertiliser)…we have been doing that since 1985 when they (industry players) discovered the technique,” he said.

Nageeb was responding to news on the six Malaysian-linked companies being investigated by the Indonesia authorities for fires at their concessions.

Elaborating further, Nageeb said for some estates, fires spread into their plantations but they had managed to bring them under control rather quickly, except for TDM which has plantations of a larger scale.

Bernama reported that Malaysian oil palm companies had refuted the allegation levelled against them with some saying the recent fire incidents happened outside their areas of operation.

Sime Darby Plantation, for example, said that the fires were located in lands occupied by local communities, while IOI Corp Bhd was reported as saying that it has put in place a surveillance system and dedicated resources to put out fires within its boundaries.

“The problem is when it is a dry season, you just throw a cigarette to spark a fire, but the point is all these companies are ready with equipment to help. Most of our members have those facilities,” Nageeb explained.

Nageeb, who is also chairman of Felcra Bhd, instead urged both Malaysia and Indonesia to work together to overcome the issue and put a stop to the ongoing negative perception about the commodity in the European Union.

Last month, Indonesian Environment and Forestry Ministry law enforcement director-general Rasio Ridho Sani was quoted as saying that under Indonesian criminal law, the courts can impose punishments including jail terms for company executives, fines and seizure of company profits.