Case Study 9: Merauke, PT Merauke Rayon Jaya

Issues of potential concern:

• Changes to Forest Moratorium • Concession issued by Soeharto still valid • Weak regulations • Indigenous opposition

A view over PT Merauke Rayon Jaya's concession 2 Oct. 2020.

The largest change to the Forest Moratorium map in Papua Province has been made to accommodate not an oil palm plantation, but an industrial timber plantation, PT Merauke Rayon Jaya (PT MRJ).414 Its case also differs from the other case studies in this report because the change was made not in response to a company request, but after the MoEF lost a court case brought by the company. However, it is relevant to this report because it illustrates clearly how the government’s long-term failure to produce a clear and unambiguous system of forest regulation allows flawed projects instigated many years ago to continue to pose a threat. The sheer amount of primary forest at risk of being destroyed in this concession, as well as the scale of the threat to Indigenous people’s land rights, culture and livelihoods, also demand attention.

© Yayasan Pusaka Bentala Rakyat

PT MRJ was issued a forest utilisation business permit for plantation forest (IUPHHK-HT) on 5 January 1998 – in the last months of Soeharto’s presidency – to plant an industrial forestry plantation on 206,800 ha of mostly primary forest in Merauke Regency. The company was owned by the Texmaco Group of Marimutu Sinivasan, reportedly a close friend of Soeharto.415 The current president director of the company, Martin Hutabarat, is a member of the Indonesian House of Representatives, representing an area in North Sumatra for the Gerindra party.

At the time the permit was issued, the Asian financial crisis was gathering force and the Texmaco Group was in trouble, reportedly borrowing US$2.7 billion from state banks.416 Even though the company’s debts were taken over by the Indonesian Bank Restructuring Agency, the body set up to salvage casualties in the financial sector in the aftermath of the crisis, which offered Marimutu Sinivasan generous terms to recover his assets, he nevertheless lost many of them.417 He did recover PT MRJ, but left the concession undeveloped for many years.

In July 2014, Zulkifli Hasan’s administration issued a decision revoking PT MRJ’s permit, on the basis of inactivity.418 The company appealed against the decision in the administrative court (PTUN). It claimed that since 2010, although it had not actually cleared forest or built facilities, it had carried out surveys, been in communication with local Indigenous communities and tried to get further permits to enable it to carry out development-related activities, some of which (including yearly work plans and a permit to build an access route) had been rejected by the local government.419

The case reached the Supreme Court, which decided in favour of the MoEF, but PT MRJ appealed against this decision. On 20 June 2017 the Supreme Court delivered its decision in favour of PT MRJ and ordered that its permit be reinstated.420

By that time, 133,481 ha of primary forest and 2,109 ha of peatland within the concession had been included in the Forest Moratorium map,421 but this land was removed from the map on the moratorium’s 15th revision in December 2018 on the basis that, with the validity of the 1998 permit reaffirmed, the justification for its inclusion in the moratorium had disappeared. During 2019 and 2020 the company reportedly approached Indigenous communities around the concession, but encountered opposition from both the Marind ethnic group around Selouw village in Merauke Regency422 and the Wambon Tekamerop people, who live in several villages in Subur sub-district of Boven Digoel and Ulilin sub-district of Merauke.423

415 Fung N & Sentana IM (1999) 416 International Crisis Group (2001) p21 417 International Crisis Group (2001) p21 418 SK251/Menhut-II/2014 419 Supreme Court of the Republic of Indonesia (2017) 420 Supreme Court of the Republic of Indonesia (2017) 421 Yayasan Pusaka Bentala Rakyat (2019b) 422 Yayasan Pusaka Bentala Rakyat (2020a) 423 Yayasan Pusaka Bentala Rakyat (2019b)

Map of PT Merauke Rayon Jaya (HTI concession) showing moratorium revisions 14 and 15.

A lot has changed since 1998, when PT MRJ’s permit was issued. Soeharto has long since fallen, and his system of offering lucrative logging permits to cronies424 has been challenged. The Papuan Special Autonomy Law was introduced in 2001, reaffirming Indigenous Papuans’ customary rights over their ancestral land. On the debit side, other nearby areas of primary forest have become oil palm plantations, breaking up the ecological integrity of the Southern Papua Lowland Rainforest Ecoregion.425

Around the world, however, there is a much greater acceptance of the need for urgent action to confront the climate and biodiversity crisis and to respect Indigenous land rights, all of which means conserving remaining forests and peatland. Counting above-ground biomass alone, there are 18.9 million tonnes of carbon stored in the forests of PT MRJ’s concession – more than the amount emitted annually by Austria.426

It is therefore unacceptable that the Indonesian Government is acting as though there is no further means to challenge a concession undeveloped since its permit was issued two decades ago, and which is poised to destroy an area of primary forest twice the size of Singapore. If the government has until now failed to ensure a sufficiently strong legal framework then it must issue well-designed and unambiguous regulations enabling the ministry to step in regarding cases like PT MRJ’s where the social and ecological case for revocation is clear.

© Yayasan Pusaka Bentala Rakyat

Indigenous people erect a sign reading "The Wambon Tekamerop people in Subur village oppose PT Merauke Rayon Jaya, in accordance with [Constitutional Court Decision] 35/PUU-X/2012 2 Oct. 2020.

424 Human Rights Watch (2003), Chapter 3 425 One of WWF’s Global 200 ecoregions (see WWF website ‘Southern New Guinea lowland rain forests’). 426 Calculated using the carbon stock averages for each vegetation class contained in Indonesia’s 2015 Forest Reference Emission Level submission (Ministry of Environment and Forestry (2016)) and the MoEF’s 2019 land cover map.