The two hats of public security actors in Indonesia Protecting human rights or preserving business interests? Case research in the palm oil and logging sector SOMO & Inkrispena June 2017 Colophon The two hats of public security actors in Indonesia Protecting human rights or preserving business interests? Case research in the palm oil and logging sector June 2017 Authors: : Vincent Kiezebrink & Mark van Layout: Frans Schupp Dorp (SOMO) and Y. Wasi Gede Puraka & Cover photo: iStockphoto Ayudya Anzas (Inkrispena) ISBN: 978-94-6207-120-9 Text editing: Prof. Nigel White, Prof. Mary Footer and Dr Kerry Senior (Nottingham This publication has been made International Law & Security Centre, possible by financial assistance from University of Nottingham), Fleur Scheele, the Nether lands Organisation for Esther de Haan, Kris Genovese and Scientific Research (NWO/WOTRO). Gerhard Schuil (SOMO) and Robie Kholilur- rahman (Inkrispena) Inkrispena Stichting Onderzoek Multinationale Ondernemingen Jl. Lapangan Roos II No.42 RT 015 RW 005 Centre for Research on Multinational Kelurahan Bukit Duri, Kecamatan Tebet, Corporations Jakarta Selatan 12840 Indonesia T: +6221 8370 4503 Sarphatistraat 30 [email protected] – www.inkrispena.org 1018 GL Amsterdam The Netherlands Disclaimer T: +31 (0)20 639 12 91 The content of this publication is the sole [email protected] – www.somo.nl responsibility of SOMO and Inkrispena and The Centre for Research on Multinational does not necessarily reflect the views of Corporations (SOMO) is a critical, NWO/WOTRO. independent, not-for-profit knowledge SOMO and Inkrispena have reviewed centre on multinationals. Since 1973 the findings with the companies involved. we have investigated multinational We would like to thank all respondents in corporations and the impact of their Indonesia for their cooperation with this activities on people and the environment. research. The two hats of public security actors in Indonesia Protecting human rights or preserving business interests? Case research in the palm oil and logging sector SOMO & Inkrispena Vincent Kiezebrink & Mark van Dorp (SOMO) Y. Wasi Gede Puraka & Ayudya Anzas (Inkrispena) Amsterdam, June 2017 Contents Acronyms ............................................................................................................... 4 Executive Summary .................................................................................................. 4 1 Introduction ....................................................................................................... 5 2 Methodology ..................................................................................................... 6 2.1 Research objectives ...................................................................................... 6 2.2 Case study selection process ........................................................................... 6 2.3 Research questions for the case studies .............................................................. 7 2.4 Field data collection process ............................................................................ 7 2.5 Review process ............................................................................................ 9 3 Case study 1: PT Asiatic Persada ............................................................................10 3.1 Corporate profile ......................................................................................... 10 3.1.2 Asiatic Persada .......................................................................................... 10 3.1.2 Relationship between Ganda Group and Wilmar .................................................. 14 3.1.3 Ganda Group ............................................................................................. 16 3.1.4 Wilmar ..................................................................................................... 17 3.2 The role of Asiatic Persada’s security providers and human rights violations ................. 22 3.2.1 The social conflict ........................................................................................ 22 3.2.2 Security incidents and human rights violations ..................................................... 29 3.2.3 Asiatic Persada’s security providers and human rights violations ............................... 33 3.3 Conclusions for Asiatic Persada ....................................................................... 35 4 Case study 2: PT Wirakarya Sakti ...........................................................................37 4.2 Corporate profile ......................................................................................... 37 4.1.1 Wirakarya Sakti ........................................................................................... 37 4.1.2 Sinar Mas Forestry ....................................................................................... 39 4.1.3 Asia Pulp & Paper (APP) group ........................................................................ 39 4.1.3 Sinar Mas Group ......................................................................................... 42 4.2 The role of Wirakarya Sakti’s security providers and human rights violations ................. 44 4.2.1 The conflict ................................................................................................ 44 4.2.2 Security incidents and human rights violations ..................................................... 44 The case of Senyerang .................................................................................. 44 The case of Terjun Gajah................................................................................ 47 The case of Parit Jawa Timur .......................................................................... 49 The case of Lubuk Mandarsah ......................................................................... 52 4.2.3 Wirakarya Sakti’s security providers and human rights violations ............................... 54 4.2 Conclusions for Wirakarya Sakti ....................................................................... 58 5 Analysis of the case studies in the international law framework ....................................59 5.1 Corporate liability ........................................................................................ 59 5.2 State liability .............................................................................................. 59 6 Overall conclusions .............................................................................................61 2 Acronyms AS Agronusa Alam Sejahtera ADM Archer Daniels Midland AFAMSA Agrupación de Fabricantes de Aceites Marinos AMC Asiatic Mas Corporation AMS Agro Mandiri Semesta AP Asiatic Persada APP Asia Pulp and Paper BDU Bangun Desa Utama Brimob Mobile Police Brigade CAO Compliance Advisor Ombudsman CDC Commonwealth Development Corporation CPO Crude Palm Oil CSR Corporate Social Responsibility DfiD Department for International Development (UK) FCP Forest Conservation Policy FFB Fresh Fruit Bunch FPIC Free, Prior and Informed Consent FPP Forest Peoples’ Programme GAR Golden Agri-Resources HGU Land Use Permits IFC International Finance Corporation JJP Jatim Jaya Perkasa MCP Mangala Cipta Persada MIGA Multilateral Investment Guarantee Agency NILSC Nottingham International Law & Security Centre NWO The Netherlands Organization for Scientific Research PMSC Private military and security companies PPJ Persatuan Petani Jambi RSPO Roundtable on Sustainable Palm Oil SAD Suku Aanak Dalam SMART Sinar Mas Agro Resources and Technology SPV Special Purpose Vehicle TNI Tentara Nasional Indonesia URC Rapid Response Force of MCP WKS Wirakarya Sakti WWF World Wildlife Fund 3 Executive Summary This report presents the results of a research project on the role of state and private security actors in human rights violations in the extractive industry in Indonesia. While legal and policy frameworks are based on a clear distinction between public and private security actors and functions, the reality on the ground in Indonesia reveals that both the military and police are engaged in the commercialisation of security services. In fact, they often play a role alongside private security companies (mainly local, though there is some evidence of a growing international presence) and the security personnel of companies engaged in agribusiness and extractive industries. This has led to serious human rights violations of indigenous peoples and other local inhabitants, who often find themselves entangled in protracted conflicts with multinational companies over access to their land. This report includes the results of two case studies: one on palm oil company Asiatic Persada, owned by the Ganda Group, and one on logging company Wirakarya Sakti, owned by the Sinar Mas Group, both Indonesian multinationals. These two case studies, which involved fieldwork in Sumatra in July and August 2016, reveal a pernicious and deliberate erosion and violation of rights of local inhabitants across the spectrum of security actors, showing that public security actors are protecting corporate interests rather than performing public functions. The implications of these findings are considered in terms of legal responsibilities as well as access to justice, highlighting some of the challenges of non-judicial grievance mechanisms such as the IFC’s Compliance Advisor Ombudsman and the RSPO Complaints Mechanism. The report ends with a call for necessary legal and policy changes. The research was carried out in a consortium