The Palembang High Court has overturned a lower court's decision to clear pulpwood firm Bumi Mekar Hijau (BMH) of illegally setting fires on its concession land in 2014.
According to a copy of the Aug 12 ruling that was seen by The Straits Times, the firm was found to have "committed an unlawful act".
The High Court also ordered BMH, which supplies products to Indonesia's Sinar Mas Group, to pay 78.5 billion rupiah (S$8 million) in damages.
The award is a small fraction of the 7.8 trillion rupiah in damages sought by the Environment and Forestry Ministry when it first filed the civil suit against BMH last year.
Still, green groups such as the Indonesian Forum for the Environment (Walhi) hailed the latest verdict as a "small win" for Indonesia's conservation efforts.
Walhi's South Sumatra chapter director Hadi Jatmiko said: "On the one hand, the court is on the side of the environment by saying BMH is guilty of having illegally burnt 20,000ha of its own concession in 2014. But it is disappointing that the compensation is less than 1 per cent of the total sum demanded."
Mr Jasmin Ragil Utomo, who is from the Environment and Forestry Ministry, yesterday acknowledged the court's decision.
"The most important thing is that the court has declared that the company has committed a violation," said Mr Jasmin, who is the ministry's director for environmental dispute settlement.
BMH's lawyers declined to comment on the case, saying they have not received an official copy of the latest verdict.
This is not the first time BMH is in the news over allegations related to forest fires. Indonesia's Peatland Restoration Agency earlier this year said the firm has been ordered to restore 95,000ha of damaged peatland in its concessions.
Satellite data from Global Forest Watch detected at least 22 fire alerts in their pulpwood concessions between Aug 21 and Sunday.
Indonesia - through its Environment and Forestry Ministry - has been taking errant firms to task over illegal forest fires that have been the cause of transboundary haze pollution.
Haze from fires in Kalimantan and Sumatra returned in recent weeks, prompting fears of a repeat of last year's crisis, which sent air pollution levels to a record high and affected millions of people in the region.
Yesterday, heavy rainfall across Indonesia provided much-needed relief for people in Sumatra's Riau province.
Several areas in Riau were hit by severe air pollution in recent days, prompting some schools to suspend classes since Monday.
Indonesia's National Disaster Management Agency (BNPB) yesterday said a combination of rain and fire-fighting efforts, including cloud-seeding operations, helped improve air quality.
Dr Sutopo Purwo Nugroho, who heads BNPB's data and information division, said the air pollution standard index for most regions in Sumatra was generally under 50, or in the "good" range.
In Riau's Rokan Hilir regency - one of the worst-hit areas in recent days and where fire-fighting efforts were focused yesterday - the air quality was "moderate".
"Fire-fighting operations in the six provinces of Riau, Jambi, South Sumatra, West Kalimantan, Central Kalimantan and South Kalimantan will continue," said Dr Sutopo.
A total of five BNPB helicopters as well as three fixed-wing aircraft have been deployed to douse fires in Riau, he added.
