Clarification against

The Misinformation
about KORINDO

September 23rd, 2016

Ver 1.0
Korindo has been practicing ‘No Deforestation, No Peat, No Exploitation’, in
compliance with all palm plantation related regulations of the ­Indonesian
government. The group has been contributing to the development of P ­ apua
region since the 1990’s, and will continue being the company that grows
hand-in-hand with the people of Papua.

In August 2016, AidEnvironment published a report regarding manage-

ment activities of Korindo a company currently managing palm plantations
in Papua, Indonesia which was commissioned by organizations entitled
Mighty* and The Korea Federation for Environmental Movements. Through
this clarification, we would like to provide objective evidence explaining as
to why the statements made in the report are not at all acceptable.
*Mighty is a campaign arm of Waxman Strategies as stated in Waxman’s official twitter
account (@TeamWaxman), a lobbying company from the USA.
 Clarification against the misinformation about Korindo

1. ABOUT KORINDO

Korindo was founded back in 1969 and has been operating for the past 47 years. It is a 100% Indonesian
company. The company mainly focused on hardwood development in its beginning phase but soon moved
to plywood/veneer in 1979, to newsprint papers in 1984, to plantations in 1993, and finally to the palm oil
­plantation in 1995. This progression coincides with Indonesian government’s policies-hardwood exporta-
tion ban and secondary processing industry fostering in 1983. Korindo has been acknowledged for its proper
­f­orest resources development and fostering related processing industries, contributing to Indonesia’s macro/
micro economic developments. The company was also a­ cknowledged for successfully supplying domestic
newsprint papers, answering properly to the government’s call to reform the newspaper industry which was
100% reliant to imported newsprint papers. This tendency of the firm and its executives-pertaining largely to
the corporate social r­ esponsibility-has continued on to constructing a collective wood processing complex in
Central Kalimantan in 2013. In 2016, the firm has also added a cohesive effort to an experimental rice planta-
tion in the v­ icinity of Merauke area, to further contribute towards Indonesia’s self-sufficiency in food.

Through the endeavors of forest plantation and palm oil plantation, Korindo has successfully d­ eveloped an
environmental-friendly industry where economic value is derived directly from forest and forest resources.
The company has also added to the nationwide employment rate through hiring local r­ esidents of its project
sites. Looking at Papua Province in particular, Korindo hires 10,000 ­employees from the Asiki region alone,
and the sum of local taxes paid by Korindo in Merauke Regency and Boven Digoel ­Regency adds up to the
30% and 50% respectively of their local taxes. The company has also set up the first medical facility in Asiki
region because there was none, and has been providing diagnosis and medicines completely free of charge
ever since. And the company is currently establishing a general hospital which will provide a higher level
of health care services to about 20,000 local people in cooperation with Korea I­nternational Cooperation
­Agency.

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 Clarification against the misinformation about Korindo

2. CLARIFICATION I : NO DEFORESTATION

Papua Province Land Use Plan

Korindo’s development is neither imprudent nor ill-considered. Indonesian government specifically
divided the development region and conservation region in Papua through the National Development
Plan. According to the data suggested by the Ministry of Forestry in 2014, only 6% was designated as
APL in Papua province-an area permitted for development for the purpose of agriculture, residential
area, infrastructure and more. All of Korindo’s plantations area has been designed within the APL.

Trans-Papua Development
In addition, all of Korindo’s palm oil plantations were all established centering the Trans Papua
­region-the region where the government was concentrating all of the Papua developmental efforts.
It must be noted that in the 1990’s this was deemed impossible because there were no infrastructural
facilities such as roads, ports, and more. Korindo however, has been growing the enterprise in size
through installing these infrastructures one-by-one.

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 Clarification against the misinformation about Korindo

Korindo’s palm plantations

have been developed on the
both side along section ①

Jakarta Post, http://www.thejakartapost.com/news/2016/09/08/papuans-wait-another-day-development.html

3. CLARIFICATION II : ZERO BURNING

Application of ISPO Standard

Indonesia is the world’s top producer of palm oil and they
strategically foster the palm oil industry as the core indus-
try of Indonesia. At the same time, Indonesia has also faced
the challenges to minimize adverse social and environmen-
tal impacts. In order to secure the future of both forests and
economic growth of Indonesia, the Ministry of Agriculture
has launched a national certification scheme ISPO – Indone-
sian Sustainable Palm Oil. Korindo has actively followed all
the provisions of Indonesian government such as zero burn-
ing policy and moratorium on peatland from the past and
also started to adopt good agricultural practice based on
ISPO to make it possible to balance healthy ecosystems and
improved livelihoods.

As of September 2016, PT. Tunas Sawa Erma has passed

through all procedures necessary for ISPO certification and
is now at the stage of signing. PT. Berkat Cipta Abadi and PT.
Dongin Prabhawa are currently under the assessment process. O ­ ther companies also vigorously reflect
ISPO standards to all aspect of palm plantation management although they are not eligible to apply for
the ISPO certification because they are still in the early stage of development. Particularly with regard to
the zero burning, all companies have prepared and enforced 1) facilities and systems for fire control, 2)
SOP of fire control, 3) training for fire protection and extinguishment.

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 Clarification against the misinformation about Korindo

Herewith we convey to employees, daily laborers, contractors and local people in surrounding area
as follows :

1. Any person who deliberately set fire to the land will be subject to criminal sanctions;
2. It is prohibited to open land within the company’s management area without permission from
the Company/Head of the Division.

If anybody is known or found as violating the above regulations, he/she will be submitted to
authorities and prosecuted. That are based on :

a. Republic Act No. 18 of 2004, Section C48 ArticleI :

Any person who intentionally open and/or cultivate land by burning will be charged
imprisonment with up to 10 years and fined of 10 billion rupiah.
b. Law No. 41 of 1999, Section 50 Article 3 points d :
Each person is not allowed to burn forest/land and who breaks this intentionally will be charged
imprisonment with up to 15 years and fined of 5 billion rupiah.

Korindo’s management in each plantation has regularly released announcement to prevent the intentional
and harmful use of fire in the concession area.

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 Clarification against the misinformation about Korindo

Effect of Long Dry Season, 2015

The organizations-Mighty et al-have provided satellite image analysis and photographs of the sites,
stating that Korindo is forming palm plantation through arson. This statement is simply invalid.
­According to the Global Forest Watch site -a forest fire monitoring site- most of the Papua region in the
latter half of 2015 was set on wildfire, including the areas designated as protective areas where there
are no corporate activities such as palm plantation.

Protected Area

Protected Area

This could easily be confirmed by the Washington Post’s coverage of the wild fire over a vast area-twice
the size of Jakarta-that occurred in California. This shows that no nation could be safe from the natural
disaster, including not only the Republic of Indonesia but also the United States of America.

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 Clarification against the misinformation about Korindo

Washington Post, https://www.washingtonpost.com/news/energy-environment/wp/2016/08/15/california-is-in-

flames-right-now-with-fires-fueled-by-historic-drought/?utm_term=.aec63971602d

Consequently, the statement claiming Korindo’s plantation development as the main cause of the
haze in 2015 is a malicious false allegation. During the period of haze, Korindo’s plantation develop-
ment was less than 4500ha. Even if we would assume the entire development area being put on fire, it
would only constitute less than 0.2% of the total area burned in Indonesia-2.6 million ha.

Mechanical Land Clearing

Mighty has made the claim that Korindo used ‘slash and burn’ to reduce the enormous cost of land
clearing for the palm plantation development. However it is thought to be because they did not un-
derstand the whole concept of ‘slash and burn’ and ‘mechanical land clearing’. ‘Slash and burn’ is a
farming method to make fire on trees across the forest and create a field as shown in the photo below.
It typically used little technology. But photos presented AidEnvironment’s report does not show any
evidences of ‘slash and burn’ in Korindo’s palm plantation but it clearly shows that land clearing was
finished by heavy equipment. Because Korindo already spent all the cost for the land clearing by the
mechanical land clearing, there would be no economical benefits for the company to burn even the
pile of disposed wood.

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 Clarification against the misinformation about Korindo

An example of slash and

burn. Korindo has never
used this method for the
plantation development.

An example of mechanical
land clearing. Piles of dis-
posed wood on the right
picture of AidEnvironment
report clearly shows that
Korindo used mechanical
land clearing method for
plantation development.

In addition, in the most regions mentioned in the report, piles of disposed wood and palm trees
­planted about 2 years ago, are observed as in the photo below and these piles will act as natural fer-
tilizers when they are discomposed. It is the counterevidence that there was no arson in Korindo’s oil
palm plantation with the purpose of land clearing or any other operational reasons.

An UAV image of PT. Ber-

kat Cipta Abadi which was
taken on June 2016. Young
palm trees are growing bet­
ween piles of disposed
wood which can’t be found
if they are burnt during the
land clearing process.

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 Clarification against the misinformation about Korindo

This photo taken on Sep-

tember 2016 also shows
remaining piles of dis-
posed wood in PT. Berkat
Cipta Abadi.

4. CLARIFICATION III : NO EXPLOITATION

FPIC Procedure
The statement accusing Korindo of violating the rights of local residents in developing its palm plan-
tation is also a false allegation. According to the government regulation, business permission for new
palm plantation registration cannot be granted without at least 3 public hearings that are participated
by local residents, formal agreement of the local residents and compensation plan that fits the local
government’s standards. Korindo is also well aware of this and has been conducting public hearing &
agreement with participation of the local residents, agreement of the villages, facilitating activities of
corporate social responsibility including proper compensation.

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 Clarification against the misinformation about Korindo

These activities are all confirmed by Papua Province Forestry Service and Agricultural Agency of
­Merauke and Boven Digoel Regencies. Even the report drafted by the NGO, ‘Burning paradise’ states
in page 19 that Korindo does not proceed the plantation development without the local residents’
consent. In addition, the company’s statistics provide that 30% of Korindo’s Papua office is comprised
of indigenous people, and that they all receive wages for above the minimum wages per regions
­suggested by the government.

North Maluku Case

PT. Gelora Mandiri Membangun (Hereafter noted as GMM) received business license over 10,000ha
of Southern Halmahera, Maluku Province, Indonesia in December of 2011 and has been developing
palm plantation ever since. Based on the findings of July 2016, GMM has finished Palm plantation over
4,500ha of the total area.

There were a total of 8 villages from 3 counties in the vicinity of GMM plantation. GMM did face
­oppositions from some of the villages in the beginning phase of the plantation, but through the means
of public hearings participated by the local residents, the company could establish agreements with all
of the villages, which has been the basis of rightful compensation and the majority of local residents’
support towards GMM’s development of palm plantation. GMM has also been largely contributing to
the local employment rate expansion by hiring a total of 260 local residents. This is 54% of the total 480
employees at the site.

Agreement on local resident’s farm in the concession area.

Agreement Between PT.GELORA MANDIRI MEMBANGUN And Awis Village’s Representatives - Religious
Leader, Community Leader and Youth Leader concerning the plantation which is located in the con-
cession area (hereinafter called the “Agreement”) is made and entered into this day, Monday, 2nd of
September, 2013, by and between

Awis village agreement. PT. GMM established agreement with all of the villages in
the vicinity of PT. GMM plantation.

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 Clarification against the misinformation about Korindo

In addition, for Gane Luar village’s opposition of 1,000ha of land for plantation development on the
basis of water source protection, GMM has drafted a protection agreement with the village, registering
the HGU excluding the suggested area.

Nevertheless, a petitioning document was submitted to the National Land Agency in May of 2016
which was not drafted under the name of any local residents but under the name of Walhi-an Indo-
nesian social organization. The National Land Agency has decided that it has no basis to accept the
suggested petitioning statement of Walhi.

Distortion of the Fact from Mighty’s Press Conference

there was an interesting fact that we found in the last Mighty’s press conference on September 1 in
Jakarta, on what pastor Anselmus from SKP-KAMe* had stated that “Korindo did not preserve the com-
munity right and repressed the indigenous community therefore 17 employees (including 3 Koreans)
of Korindo were abducted by the Papua rebel forces”. That statement was totally groundless and had
reduced the reliability of other statements that was made by Mighty. In fact, the demands of the rebel
­forces were the separation and independence of Papua, the supply of weapons and financial ransom
for fi
­ nancing the ongoing battle. However, Korindo as a company who was engaged in business ac-
cording to the laws in Indonesia was not in a position to fulfil those demands, so with helps from Indo-
nesia go­vernment and after negotiation, all the hostages were released and the direct meeting with
President A
­ bdurrahman Wahid could be arranged.
* SKP-KAMe is a humanitarian group based in Merauke, papua, Indonesia.

Mighty also accused in their press conference that Korindo would only become a hit and run company
after acquiring financial business profit was really groundless since Korindo has been 47 years in forest
management business since 1969 and the palm plantation would need to be replanted for the next 30
years to sustainably producing oils that eventually it would remain totally at least about 80 years.

5. CLARIFICATION IV : NO PEAT

Korindo has not applied for or developed any plam plantation or timber plantation concessions over
the peatland until now. It was clearly proved by the environmental effect assessment which should be
done during the approval process. And in case of palm plantations in Papua, it was also confirmed by
the ecological survey which was carried out by Bogor Agricultural University on March 2016.

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 Clarification against the misinformation about Korindo

6. CLARIFICATION V : IOI*

Korindo has never traded CPO directly with IOI group until now. The company does not have enough
information to confirm for the indirect business relationships. Direct contact and inquiry to IOI group
would give you more accurate and quick answers.
* IOI Group is a global integrated palm oil player and one of the largest property development cum investment
­companies in Malaysia.

7. CLOSING REMARKS

In last April 29, the Indonesian Tempo magazine-a weekly paper with the highest authority-had an
interview with Ridwan, Governor of Bengkulu, who stated that “the Foreign NGOs who made negative
propaganda to Indonesia’s palm industry in fact are purposed to allow other fat oils industry gained
big profits from decreasing palm oil exports. Governor Ridwan also urged that palm oil is Indonesia’s
key export product that has to be protected and developed further by the entire Indonesian people.

The Ecologiest, one of the world’s leading environmental affairs magazines, also raised a question
if the anti-palm campaign is really worth through the article, “Don’t be fooled by zero deforestation
promises”. (http://www.theecologist.org/News/news_analysis/2397878/dont_be_fooled_by_zero_
deforestation_promises.html).
It explains that multinational palm oil companies who followed the NGO’s campaign from the
­beginning and also declared no deforestation policy, has already taken enough land to establish
­sufficient palm plantation by destroying more forests than anyone. And it pointed out that they sold
off problematic operations to companies that are relevant to themselves rather than reforming them.
Most importantly, it also questioned if they actually consulted local populations who were mostly
­affected.

So far Korindo has actively followed Indonesian government’s sustainable palm oil policy and has
been in compliance with all regulations associated. The idea of ‘No deforestation, No Peat and No
­Exploitation’ is fully applied in the current ISPO regulations although the term ‘NDPE’ itself doesn’t
appear in its standards. The corporation once again pledge to faithfully follow ISPO standards in palm
plantation development and management, and will use best efforts to draw the proper ways for the
sustainable palm oil development through the discussion with local government, local communities
and civil s­ ocieties of Papua and Indonesia who are the most important stakeholders.

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