Investigative Report: PT Bina Daya Bintara affiliated to APRIL clearcuts peat forest in Libo block

EoF Investigative Report / 18 January 2007

Eyes on the Forest (EoF) Investigation in August 2006 inside Libo forest block has found that about 5,000 hectares of natural forests had been clearcut in a concession of PT Bina Daya Bintara, associated with Asia Pacific Resources International Holdings (APRIL).

The logging in this concession started in August 2005. EoF observed logging activities being carried out by four contractors to PT BDB on 22 August 2006 and followed the wood from the logging sites until the receipt on 23 August 2006 by PT Riau Andalan Pulp and Paper (RAPP), belonging to APRIL.  

This is the EoF’s second investigation to find the involvement of PT Bina Daya Bintara/APRIL in allegedly illegal activities inside Libo forest block as reported by EoF Investigative Report of March 2006. The difference is that this time the company who fell the timber actually received them. In March 2006 investigation, EoF found that PT Indah Kiat Pulp and Paper (PT IKPP), a pulp mill of Asia Pulp & Paper (APP), received and stored timber from natural forest clearcutting in the same concession.    

Eyes on the Forest considers that these logging and wood purchasing operations are allegedly illegal.    Based upon EoF’s investigation, the concession license in this area was a Principal license issued by the Head of Siak District: 

• PT Bina Daya Bintara has an IUPHHK-HT (Industrial Timber Plantation) license by Decree Number 02/IUPHHK/I/2003 dated 18 January 2003. The area size of the concession where logging is happening is 8,000 hectares. 

 • This IUPHHK-HT license is issued based on Ministry of Forestry Decree number 10.1/2000 and 21/2001 where the Central Government delegated authority to Governor and District Head/ Mayor to issue such a license.     

However, since the Government Regulation Number 34/2002 dated 8 June 2002 has come into effect, IUPHHKHT license can be issued only by Minister of Forestry based upon recommendation given by District Heads or Mayors or Governors (clause 42 Government Regulation 34/2002). This is also reaffirmed in clause 102 of Government Regulation Number 34/2002. Therefore, referred to Government Regulation number 34/2002, Provincial Governors and District Heads/Mayors have no more authority to issue IUPHHKHT licenses, such as the one issued for this concession, although Ministry of Forestry Decrees number 10.1/2000 and 21/2001 have not been revoked.   

The Ministry of Forestry (MoF) has been in the process of reviewing validity of IUPHHKHT licenses issued by Provincial Governors or District Heads (Forestry Minister Decree No P.03/Menhut-II/2005 dated 18 January 2005) and banning Provincial Governors and District Heads to issue any more IUPHHKHT licenses.

Since 27 July 2005, Eyes on the Forest has been calling on all companies that are clearcutting natural forests based on such licenses to immediately issue a moratorium on all forest clearance operations. The coalition also called on all companies sourcing timber from such activities to immediately stop all deliveries (see EoF PR on 27 July 2005).    

EoF’s call for moratorium above is in line with a recommendation from Director General of Forestry Production Management of Ministry of Forestry, Hadi S. Pasaribu, through his letter dated 13 June 2006, regarding relaxation of the rules for RKT (annual working plan) Study year 2006 for PT. RAPP. The letter recommended that, in a bid to ensure both legal and business certainties, the RKT administrative service for eleven IUPHHKHT licenses (including this particular concession) should await verification approval from Minister of Forestry. 

A Letter of Minister of Forestry number S. 439/Menhut-VI/2006 dated 17 July 2006 pointed out that while PT Bina Daya Bintara had been awaiting the issuance of its license verification, the Ministry provided an exemption to the company to secure its logging operation by 2006 in an attempt to avoid the suspension of Industrial Timber Plantation development.

Considering the above, as of 2007, PT Bina Daya Bintara/APRIL should not have continued the operations in this concession.