Indonesian sago plantation company gets record $107 million fine for fires that caused haze in 2015

A cyclist rides along Gardens by the Bay East with the Singapore skyline shrouded in haze on Oct 13, 2015.
A cyclist rides along Gardens by the Bay East with the Singapore skyline shrouded in haze on Oct 13, 2015. PHOTO: ST FILE

JAKARTA - A Jakarta district court has ordered sago plantation company PT National Sago Prima to pay a record 1 trillion rupiah (S$107 million) for causing the fires that spread uncontrollably in 2015 and causing choking haze. 

The court ruling, passed on Thursday (Aug 11), orders Sago Prima to pay a 319 billion rupiah fine and another 753 billion rupiah to cover the cost of rehabilitating the burnt 3,000 hectares of land in the Meranti islands in Riau province. 

The total amount is the biggest fine ever imposed on a plantation company.

The environment and forestry ministry had brought the suit in October 2015 against the company, a unit of publicly-listed oil palm plantation company Sampoerna Agro, accusing it of negligence for causing forest fire. 

The three-judge panel, led by Mr 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 on Friday morning. 

"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 many to sustain losses. Airports are forced to close, schools cannot operate. So, such ruling serves justice well, especially for the residents of Meranti islands," Mr Patra added.

Mr Harjon Sinaga, a lawyer representing Sago Prima, said his client is considering their next step, including a possible appeal.

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

"We are considering our future steps, including a possibility to appeal."

Sago Prima, a unit of publicly-listed oil palm plantation company Sampoerna Agro, 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 Sampoerna family, who controls Sampoerna Agro, switched business focus to agriculture after raising US$2 billion in 2005, selling their stake in Indonesia's  then-second largest cigarette maker H. M. Sampoerna to a US company that owns Marlboro cigarette brand.