Fiber supplier fined by Supreme Court to pay IDR 16.2 Trillion fine

EoF News / 23 November 2016
Felled timber from natural forest clearing by PT Merbau Pelalawan Lestari in Kerumutan block, Pelalawan, Riau. Photo ©Eyes on the Forest, March 2005

A timber supplier of Asia Pacific Resources International Limited (APRIL) in Riau was fined by Supreme Court in August trial to pay compensation amount to 16.2 trillion (US$1.19 billion) for illegal logging and environmental destruction occurred during 2004-2006 in Pelalawan district, Riau province.

Report from Supreme Court website last week that quoted by media said that PT Merbau Pelalawan Lestari, an APRIL timber supplier since 2003, was found guilty conducting illegal logging of 5,590 hectares and environmental destruction of 1,873 hectares of its concession.  

The losses calculated by the Ministry of Environment and Forestry that MPL should pay are Rp 12 trillion and Rp 4 trillion from the two plots deforested respectively (, 18 Nov). It is the biggest fine that a company must pay to the government in forestry related court in the country.

The court ruling concluded that MPL breached the law by clearing forest outside its timber plantation license (IUPHHJ-HT) that released by Pelalawan District Head in 2002. The APRlL timber supplier had cleared 7,466 hectares based on its annual work plan in 2004, 2005, and 2006.

The judges ordered PT MPL to pay compensation to the Ministry of Environment and Forestry. The company was tried first in 2008 by Pekanbaru District Court when they won. At Pekanbaru High Court in 2014, the company also won the lawsuit.

Bambang Hendroyono, Secretary General of Ministry of Environment and Forestry told media last week that the fine would be allocated for Riau forest restoration as well as the State loss caused by the illegal logging (, 17 Nov).

Corruption Eradication Commission (KPK) hailed the decision of Supreme Court. Laode Muhammad Syarif, deputy chairman, said it was the court ruling was a great decision. “MA [Supreme Court] court ruling against PT Merbau Pelalawan Lestari is an impressive jurisprudence. If environmental [case] can implement it, there should be corruption case can do too,” he said as quoted as saying by (18 Nov).

PT MPL is one of 14 timber companies in Riau that their cases closed by the Riau Police in 2008. They are affiliated to two pulp giants, APP and APRIL. PT MPL is also related to corruption cases that jailed Pelalawan District Head Azmun Jaafar and Riau Governor Rusli Zainal.

Woro Supartinah, coordinator of Jikalahari, said that APRIL should be responsible to for MPL penalty whether to pay compensation or other actions due to the giant company received illegal logging timber from MPL’s operation. “From moral and ethical perspectives, APRIL should tell its customers and public honestly that they have produced pulp and paper from illegal logging sources,” she said. “Not by denying their affiliation as they announced reactively to the court ruling.”

In a press statement APRIL said it stopped sourcing fiber from PT MPL since February 2005. APRIL also denied that MPL was not its affiliate.