Corruption allegations against Korindo palm oil conglomerate

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Activists have called on the Indonesian authorities to launch an investigation into the allegations of corruption by the Korindo Group, a privately-owned conglomerate. Investigative journalists uncovered a $ 22 million "advisory" payment from the company. The activists are also pushing for the protection of the rights of indigenous communities affected by the company's palm oil operations. Korindo has so far cleared 25,000 hectares (62,000 acres) of rainforest in West Papua.

The investigation, a collaboration between Mongabay, the Gecko Project, the Korean Center for Investigative Journalism-Newstapa and Al Jazeera, examined the irregularities related to the payment and the role they played in the rapid expansion of Korindo's oil palm plantations in Indonesia’s easternmost province of Papua.

The payment was made to a Korean man named Kim Nam Ku as Korindo secured the rights to large areas of the province. Korindo gave contradicting explanations for the payment by initially calling it an "advisory fee" paid to this "expert" who helped obtain the necessary land rights, but later described it as part of a "share purchase transaction".

Anti-corruption experts who investigate the payment affirm it conformed to a typology of corruption programs that used bogus advisers as a facade to deliver bribes to government officials. Korindo has denied paying bribes, but Edi Sutrisno, Director of the NGO TuK Indonesia, called on the National Anti-corruption Agency KPK (Komisi Pemberantasan Korupsi) to launch an investigation into these allegations of corruption.

"The KPK must immediately investigate these allegations and take this matter seriously, by coordinating and cooperating with law enforcement networks in other countries," he said.

The study published by Mongabay and the Gecko Project on 25 June 2020 also revealed how Korindo allegedly failed to deliver on the promises they made to indigenous Papuans to persuade them to give up their land claims. Furthermore, the study contains witness testimonies explaining how the presence of the military and police intimidated the land rights holders and restricted their freedom to express their opposition to the conglomerate's operations.

On 29 June 2020, Korindo released a statement in response to the investigation. Korindo explained that the company had contributed "significantly" to development in the region and "was committed to respect community rights". Korindo described the results of the "advisory" payment as "false news".

On 1 July 2020, TuK and other NGOs, including the Indonesian Environment Forum (Walhi Indonesia), held a demonstration in front of the KPK Headquarters in Jakarta to join the call for an investigation. "We have to help the Papuan communities whose forests have been destroyed because politics and law enforcement decisions are taken here in Jakarta," said Tubagus Soleh Ahmadi, Director of Walhi Jakarta.

TuK had exposed details of the payment in Korindo's financial reports and previously reported them to the KPK. The anti-corruption agency refused to make a statement to whether it had initiated an investigation.

The NGOs also protested in front of the headquarters of Bank Negara Indonesia (BNI) in Jakarta. According to a research by the TuK and the U.S.-based NGO Rainforest Action Network published in 2018, the bank is Korindo's largest creditor. Korindo has been clearing Indonesia's rain forests since the 1970s and is BNI's sixth-largest customer in the agricultural sector. The company received loans of 2.8 trillion rupiah ($ 195 million) in 2017. Edi said the BNI should review its funding for Korindo in light of the company's recent corruption allegations and track records of human rights violations.

BNI's "sustainability strategy" requires its customers to "take into account” “the problem of deforestation [and] the potential for overlaps with the land of the surrounding communities". "When we refer to BNI's policies, Bank Korindo should stop approving credits," said Edi.

On 3 July 2020, more than 120 NGOs from Indonesia and other countries published a statement which urged the government, Korindo's business partners and donors, and other agencies to protect the indigenous communities in West Papua against human rights violations. The NGOs referred to the recent case of Papuan farmer Marius Betera, who died hours after he was allegedly beaten by a police officer in a Korindo field office after he complained about Korindo's destruction of his banana garden. The statement also asked security services, including the police, to protect people's rights instead of acting in the interests of businesses.

The Forest Stewardship Council (FSC), which has certified some of Korindo's forest operations, urged the company to hire an independent third party to assess any allegations of human rights violations and prevent such an event from happening again. "The company agrees," said the FSC. "In addition, the company must give affected parties access to legal remedies."

The FSC itself has examined Korindo in the past and found "clear and convincing evidence" that Korindo has violated the rights of indigenous people in West Papua by failing to inform local communities about plans to convert their ancestral land into oil palm plantations. Moreover, there were multiple case studies in which the company did not provide fair compensation to the communities for their land.

Pastor Anselmus Amo, the Head of the Justice and Peace Department of the Arch-diocese in Merauke (SKP-KAME), said that the indigenous communities could not make a free decision about the cession of their land to Korindo because security forces and government officials attended meetings between residents and the company. "The company entered [Papua] without the free, prior, and informed approval [of indigenous communities]," he said. "They provided information [their intention to set up plantations] while bringing the government and the security forces with them. The presence of many security officers puts pressure on the villagers. This has led people to give up their ancestral land without free consent."

View documentary about the Korindo corruption case on Aljazeera

Read full article about the journalistic investigation on Mongabay