Palm oil firm pays 'precedent-setting' fine for unauthorized land-clearing in Indonesia

24 February 2012

A subsidiary of agribusiness giant Cargill has paid a $1 million fine for clearing land for oil palm outside its concession, a move that could serve as an important example for palm oil developers operating in Indonesia, according to Greenomics-Indonesia, a Jakarta-based environmental group.
The fine was levied on Cargill subsidiary PT Hindoli after the company notified local authorities and the Ministry of Forestry that it had accidentally cleared about 2,000 hectares of land beyond the boundary of its formally licensed area in South Sumatra Province. The clearing, which took place in 2005, involved agricultural land that was still zoned as "forest" by the Ministry of Forestry even though it lacked exploitable timber.