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Corruption in Indonesia’s forest sector: No victimless crime

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Corruption in Indonesia’s forest sector: No victimless crime

Episode 4 of the Corruption Tapes podcast: A discussion on Indonesia's corrupt forest sector
2 June 2021

Although deforestation has declined in recent years, Indonesia still has one of the world's highest deforestation rates. Investigative journalists find corruption continues to be a main facilitator.

Corruption in Indonesia’s forest sector has proven notoriously hard to tackle. Elaborate schemes include corporate secrecy, corrupt local leaders and shell companies, with the corruption reminiscent of the plot of a soap opera. Investigative journalism shows, for example, how cleaners in a Jakarta slum were unwittingly listed as owners of big companies involved in a deforestation-driving plantation project in Papua.

Episode 4 – Corruption in Indonesia’s forest sector: No victimless crime. Available on Soundcloud and Spotify (40 minutes).

In a new episode of the Corruption Tapes, Aled Williams, senior adviser at the U4 Anti-Corruption Resource Centre, is joined by Tom Johnson of the Gecko Project and Philip Jacobson of Mongabay. Both are investigative journalists who have done extensive recent work on corruption in Indonesia’s forest sector. They discuss how deeply entrenched corruption is at the local administrative level, and how secrecy and unseemly links between companies and politicians make it hard for local communities to address suspected foul play.

Corruption entrenched in local administration

The sheer size of Indonesia's forests is difficult to grasp. This is the third largest stretch of tropical forest in the world after the Amazon and Congo basins. It is home to some of the most iconic species in the world, like the orangutan. But deforestation is changing the land, and the damage done may be irreversible.

Threats to Indonesia's forests have evolved over time along with major political changes. In the mid-2000’s, Indonesia saw a shift towards more localised governance via decentralisation. More power and authority was given to local leaders (bupatis). But this shift coincided with a growing global demand for palm oil. Winning elections was a costly exercise and local politicians found they could pay their way to office. According to Tom Johnson, this led to a perfect storm.

– You had companies with a lot of capital and district officials who could issue land permits without much scrutiny. And you had the ability to win the local elections if you put a lot of money into it.

The incentive for ambitious local politicians to engage in corruption was there. The result was unlawful permits handed out by local leaders to big companies who established shell corporations to hide illicit money flows.

In a series called Indonesia for sale, the journalists probed the connections between these political shifts and the rise of plantations. They aimed to understand how governance and political changes were exploited.

– We looked at how the potential for corruption led to a boom in plantations, and whether this contributed to deforestation. We found that problems with deforestation and conflicts between local communities and plantation companies can be linked to permits that were issued at the time. It was widely believed that local chiefs were bribed for permits, but the evidence was merely anecdotal, says Tom Johnson.

In this episode of the Corruption Tapes, he sheds light on how the journalists worked to expose the corruption in practice, using court and licensing documents, and tracking down the people who were involved to interview them. What they have been able to document is alarming.

– Some people think that corruption can be a victimless crime. But in our work, we explored the counter arguments, and we found that corruption did harm both to local communities and the environment, he says.

Recently, the Indonesian government took important steps to reduce the number of permits licensed on false pretenses. In early January 2022, a significant number of already licensed permits were revoked as part of a government review. Yet, there are risks that the government’s scheme will not necessarily contribute as positively as one might expect.

Will the government redistribute the revoked licenses transparently and fairly, protect the remaining natural forests, and restore lands to the indigenous peoples and local communities who claim them? Or will the licenses simply be re-issued to companies and other actors who will complete the deforestation of the land in question?

How to counteract corruption

Despite global attention both to the negative health effects of palm oil and the often dramatic environmental consequences of palm oil plantations, serious concerns around palm oil projects continue. The last few decades has seen an increase in land conversion for plantations. Vast forests have been turned into palm oil plantations or areas used for planting fast-growing timber species. This large-scale conversion has been one of the most important drivers of deforestation, with corruption a frequent element facilitating the conversions. So what can be done to curb the problem?

Although activism is challenging work, there are success stories demonstrating how communities can be effective in achieving change. Grassroot movements and civil society organisations directing attention towards corrupt practices can gain significant momentum with the right support.

In the Aru Islands, one group managed to prevent a planned sugar cane plantation that would have wiped out one of the most biodiverse areas in Indonesia. They proved permits had been issued unlawfully by a corrupt politician, then started a social media campaign that gained support from local institutions like the university and church. Media outlets picked up the story and the attention contributed to put an end to the plans.

Sharing information and public debate about corrupt practices is important. The Gecko Project and Mongabay illustrate how investigative journalism can contribute to improved awareness and spur debate. According to Tom Johnson, investigative journalism can have an impact and lead to changes on three levels:

  1. Specific projects or individuals.
  2. Regulations or policies.
  3. Better understanding of corruption.

Continued action from the state is also crucial. Over the past years, Indonesia’s anti-corruption commission – KPK – has forged a reputation for successfully cracking down on cash bribes, including in the forest sector. But the commission has had to choose its investigations carefully and has come under increased political pressure. It remains to be seen whether the KPK will continue its work to pursue sophisticated forest-related corruption cases involving shell companies and money laundering techniques.

Tune into the Corruption Tapes podcast for a fresh approach to the debate on how to tackle the devastating effects of corruption on conservation! Available on Soundcloud and Spotify.

For more resources, see:

The podcast is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of the author(s) and do not necessarily reflect the views of USAID, the United States Government, or individual TNRC consortium members.

    About the author

    Aled Williams responsible for U4's thematic work on corruption in natural resources and energy.

    Disclaimer


    All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

    This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)