Haze fires: Jakarta court fines sago firm $110m

A view of a fire burning in Musi Banyuasin Regency, South Sumatra, Indonesia on Aug 8.
A view of a fire burning in Musi Banyuasin Regency, South Sumatra, Indonesia on Aug 8.PHOTO: REUTERS

PT National Sago Prima slapped with biggest combined fines imposed on a plantation company

A Jakarta district court has fined a sago plantation company a record 1.07 trillion rupiah (S$110 million) for causing the fires that spread uncontrollably last year, causing choking haze.

The South Jakarta district court's ruling, passed on Thursday, orders PT National Sago Prima to pay a 319 billion rupiah fine and another 753 billion rupiah to cover the cost of rehabilitating the burnt 3,000ha of land on the Meranti Islands in Riau province.

The combined fines are the biggest imposed on a plantation company.

The Environment and Forestry Ministry brought the suit last October against the company, a unit of the publicly listed oil palm plantation company Sampoerna Agro, accusing it of negligence for causing forest fires.

The three-judge panel led by Judge Effendi Mukhtar, however, rejected the ministry's demand to shut down Sago Prima.

Mr Patra M. Zen, a lawyer representing the government, praised the ruling in a phone interview with The Straits Times yesterday.

"With this ruling, the judges make way for the aspirations for public justice to win," he said. "We know for a fact that forest fires cause losses for many. Airports are forced to close, schools cannot operate. So, such a ruling serves justice well, especially for the residents of Meranti Islands."

But the company's lawyer, Mr Harjon Sinaga, said his client is considering its next step, including a possible appeal.

"The ruling was based on weak evidence and assumptions that were filed by the petitioner (the government)," he said, pointing out that one of the three judges had a dissenting opinion on the ruling.

Under Indonesia's legal system, a district court ruling can be appealed against in a high court before reaching Indonesia's highest appeals court, the Supreme Court.

Last September, the Supreme Court rejected an appeal by the Kallista Alam palm oil company, which had been ordered by the lower courts to pay 366 billion rupiah for illegally burning 1,000ha of forest in Aceh.

Farmers and plantation companies in Sumatra and Kalimantan often use the cheapest but most environmentally damaging slash- and-burn methods to clear land. Hiring excavators would at least quadruple the cost. Open burning is against the law, but the rule is widely flouted.

Sago Prima has repeatedly denied it purposely burnt forests to clear land.

Sago Prima produces high-quality sago starch under the brand name Prima Starch, which is sold to domestic as well as international markets, according to Sampoerna Agro's company website.

The company is controlled by the Sampoerna family. It switched its business focus to agriculture after raising US$2 billion in 2005 when the family sold its stake in Indonesia's then second-largest cigarette maker HM Sampoerna to a United States company that owned the Marlboro cigarette brand.

A version of this article appeared in the print edition of The Straits Times on August 13, 2016, with the headline 'Haze fires: Jakarta court fines sago firm $110m'. Print Edition | Subscribe