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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