Tuesday, January 1, 2013

SMART and GAR take responsibility for land cleared without IPK process

Source: http://www.smart-tbk.com/newsroom_latest.php


21 December 2012

PT SMART Tbk (SMART) and its parent company Golden Agri-Resources (GAR) clarify that land clearing took place on 2,449 hectares (ha) of land, without going through the necessary Timber Clearing Permits process, also known as Izin Pemanfaatan Kayu (IPK). This took place between January 2011 and May 2012 in three GAR concessions in Kapuas Hulu, West Kalimantan, namely PT. Kartika Prima Cipta (KPC), PT. Paramitra Internusa Pratama (PIP) and PT. Persada Graha Mandiri (PGM), which are managed by SMART. SMART and GAR are accountable and take responsibility for this mistake and have since counselled and suspended the staff involved.

In practice, before land clearing, SMART marks out the areas to be developed in its concessions and submits the IPK application to the Provincial Forestry Office for approval. SMART will also submit IPK applications for the subsequent areas to be developed when required. The IPK application process takes about six months. During the process, local officials will survey the land for any commercially valuable timber. If commercially valuable timber is found, an IPK licence is required and SMART will pay the relevant licence fee.

In November 2010, SMART submitted the IPK applications for those areas it intended to develop in PT KPC, PT PIP and PT PGM. Based on these applications, the Provincial Forestry Office issued letters of recommendation stating that IPK licences were needed for some of the areas, while the IPK licence was not required for the rest of the areas. Accordingly, SMART paid the relevant licence fee where the IPK licence was needed and proceeded with land preparation in those areas which do not require the IPK licence.

Additionally, there were 2,449 ha outside the November 2010 IPK application. Instead of going through the IPK process, SMART's officers initiated a survey to identify any commercially valuable timber in these 2,449 ha. Based on the learning of the earlier IPK surveys by the Provincial Forestry Office, such as vegetation conditions in areas that do not require IPK licence, SMART's officers concluded that there was no commercially valuable timber in the 2,449 ha. Hence, SMART proceeded to clear the land without submitting the IPK application to the Provincial Forestry Office.

In May 2012, SMART recognised that it was a mistake not to go through the IPK process and submitted the IPK application. Officials of the Forestry Offices of West Kalimantan Province and Kapuas Hulu District deployed three teams to survey the 2,449 ha. The surveys concluded that there had been no commercially valuable timber in the 2,449 ha, confirming the SMART team's finding that there had been no need for the IPK licence in these areas after all.

"While the survey confirmed that IPK licences were not necessary, we acknowledge that this does not vindicate the company for clearing land without the due IPK process. We take responsibility for this mistake as the IPK process and our own SOPs were not complied with. Moving forward, we have taken the opportunity to tighten our SOPs to ensure stricter compliance," said Mr Daud Dharsono, President Director, SMART.

Moving forward

SMART will be implementing tighter SOPs which will provide guidance and clarity in decisions pertaining to land clearance. These will be cascaded through the entire organisation. SMART will be implementing training programmes to ensure understanding of the SOPs and will use this opportunity to remind all field officers to comply with SOPs and conduct the required due diligence.

Added Mr Dharsono, "We are accountable for our actions and are grateful for the commitment of our partners, despite this incident and will continue to forge ahead with our collaboration."

SMART remains committed to playing a leading role in developing a strong multi-stakeholder platform to develop solutions for sustainable palm oil production which involve conserving the forests, creating much needed employment and ensuring the long-term growth of the palm oil industry which is a vital part of the Indonesian economy.

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