Ministry of Environment and Forestry v. PT Arjuna Utama Sawit

Summary:

On December 31st, 2018, the Indonesian Ministry of Environment and Forestry (the MoEF) filed a tort-based lawsuit against a palm oil plantation company, PT Arjuna Utama Sawit. The plaintiff argued that fires occurred inside the defendant’s concessions area and caused damages to peatlands and ecosystem within. The MoEF claimed that the defendant had deliberately burned the peatlands with the intention of using it for plantation purposes. Moreover, neither the fire early warning system nor the detection system in the defendant’s concessions area met the requirements, a fact which the plaintiff used as proof of omissions. The MoEF mentioned that fires inside the defendant’s concessions had caused ecological and economic damages. For these damages, the MoEF requested compensation as high as IDR 243,291.006,270 for the damages and restoration costs. For climate-related damages, the MoEF claimed that the fires had contributed to the release of 4366.98 tC and a loss of function of carbon sinks which equal to 1528 tC. Since cost of released carbon is IDR 90.000 (equals to US$ 10), the MoEF ask for compensation of the released carbon and restoration amounting to IDR 530,588,070.

On October 21st, 2019, the District Court of Palangkaraya ruled in favor of the plaintiffs and held that the defendant was liable on damages caused by wildfires inside its concessions. On January 22nd, 2020, the Palangkaraya Court of Appeal upheld the district court decision and requested the defendant the same amount of cost for damages and restoration. On December 10th, 2020, the Supreme Court of Indonesia also upheld the district court decision.

At Issue: Restoration for climate damage caused by palm plantation land clearing.