Deforestation in Halmahera Paves Way for Palm Oil Industry

Palm oil plantation in Halmahera
Halmahera, Indonesia

Deforestation in Halmahera Paves Way for Palm Oil Industry

Yani Mukmat, a 59-year-old mother of three, has, since the 1980s, been cultivating coconut and nutmeg on a roughly two-hectare plot on the rim of the Gane Forest in the South Halmahera district of North Maluku.

But in 2012 the Ministry of Forestry awarded palm oil company PT Gelora Mandiri Membangun (PT GMM) a concession that overlapped with her land. 

Yani was among a few dozen villagers in Gane Dalam who initially resisted the company’s efforts to evict them and buy their land at a price it set. Police arrested and detained some of the farmers who resisted on charges of obstructing the company’s operations.

Yani and her husband eventually gave up and sold most of their land, but they’ve stayed in Gane Dalam, where they continue to earn a living by planting coconut and sometimes nutmeg on the remainder of their plot. Other villagers, no longer in possession of any land, have become day laborers for PT GMM while others sold out and moved elsewhere.

PT GMM is a subsidiary of the Korindo Group, a South Korean timber and palm oil conglomerate headed by Eun-Ho Seung that also has operations in Papua and Kalimantan, the Indonesian part of Borneo Island. The company began clearing the Gane Forest in 2012 and selling its timber for a lucrative sum to the plywood industry.

The clearing of the forest brought a lot of changes to the local environment, with plagues of beetles attacking local coconut crops and harming yields, and snakes appearing where they never did before. Small rivers filled with soil and sediment from the clearing activities, contaminating water supplies and causing flooding in some areas during rainy season.

In coastal areas, the clearing has hurt mangrove forests, leading to sedimentation that has increased the murkiness of the water and damaged the nearby coral reef.

Permit discrepancies
The wide difference in IPK permits processed by the North Maluku Forest Service / Source: Hairil Hiar

Since PT GMM began its operations, annual deforestation rates for natural forest in the area have risen from 905 hectares to 3,000 hectares, according to Forest Watch International.

The mangrove forest on the coast and a bit of forest in Tanjung Rotan are all that remain of the forests in Gane Dalam, with the latter now threatened by plans to build a palm oil mill.

PT GMM Field Spokesman Mizwar Mustafa denied that the clearing of the forest had led to damage to the ecosystem and said the company had so far not received any reports of such damage. He said a team from the Forest Biodiversity and Rehabilitation Study Center (Bioref), run by state-owned Bogor Institute of Agriculture (IPB), had studied the area and concluded that there was no environmental damage but declined to give further details on the team and its results.

Although the plantation has yet to start producing, Mustafa said its parent group Korindo was positively impacting the local population through its corporate social responsibility outreach, which has so far reached Rp7 billion (US$$500,000), and taxes paid to the district. Among PT GMM's community investments are health and school assistance in South Halmahera, construction of the Gane Dalam road, renovation of a mosque, and establishment of a scholarship program for Gane Dalam students.

But the Indonesian Forum for Environment (Walhi) says construction of the palm oil mill and expansion of logging and new plantations near Tanjung Rotan and Tawa-Pasidele have not received the support of local landowners and communities and recommended that the central government freeze all of PT GMM’s operations in Gane until it makes public all its permits and key documents, including its location permit, environmental impact assessment and business permit.  

It also called on PT GMM to prove that the Korindo Group’s entire operation is complying with Indonesian laws and regulations. If flaws are identified, Walhi has asked that the government suspend their permits.

Transparency could help in clearing up some discrepancies environmental groups point to in the company’s permitting.

PT GMM’s concession, for example, is, according to the forestry ministry that issued it, meant to cover 11,003 hectares.

But data released in March 2018 by Forest Watch Indonesia, an NGO that focuses on building updated and credible forestry information in Indonesia, showed that the PT GMM permit was for 10,500 hectares of land.  Data from the North Maluku chapter of Walhi, on the other hand, showed that between 2011-2015 the government had issued the company four licenses, allowing PT GMM to make use of timber covering an area of 14,527.16 hectares.

Walhi has also called on Indonesia’s anti-corruption commission (KPK), a semi-independent government body, to investigate whether any official assisted PT GMM not in accordance with procedures or showed favors to Korindo in the issuance of permits or licenses. If that review shows that a violation did take place, Walhi has called on the KPK to then investigate the related financial transactions.

The mayor of South Halmahera has denied that PT GMM or officials broke any laws and has advocated for a quick start to plantation production in order to bring money into local coffers.

Banner image: Parts of the palm oil plantation owned by PT. Gelora Mandiri Membangun in Gani Forest, Halmahera, Maluku Islands / Credit: Hairil Hiar

Reporting for this story was supported by a grant from EJN's Asia-Pacific program. It was first published in and You can read a full version in Indonesian on Ekuatorial here.

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