The wealth of Indonesia’s richest flourishes on palm oil

Wanna know why your haze problem isn’t going away any time soon?

Indonesia’s commodities (and government revenues) account for around 60 percent of exports.  A good 50% of Indonesia’s share of commodity exports is attributed to palm oil.

Palm oil accounts for 11% of Indonesia’s export earnings of $5.7bn.

On the 5th of March 2015, a Jusuf Kalla criticised neighbours for “grumbling about haze”.

“They have suffered because of the haze for one month and they get upset,” the Jakarta Globe quoted him. “Singapore shouldn’t be like children, in such a tizzy.” he said.

Some days later, his colleague Jero Wacik warned Malaysia and Singapore not to “tell stories to the world”. To put things into perspective, Jero Wacik served as the Minister of Energy and Mineral Resources of Indonesia until September 2014 following his naming as a graft suspect by the Corruption Eradication Commission (KPK).

jero

Jusuf Kalla, who serves as the Vice President of Indonesia since 2014, had good reason for being sympathetic to the burning.

Before Kalla went into politics, he was a businessman. He led a company called NV Hadji Kalla. A company that (amongst other businesses) deals with *wait for it* palm oil.

Jusuf_Kalla

Jusuf Kalla’s brother-in-law is Aksa Mahmud. A multi-millionaire that founded Bosowa, one of the largest conglomerates in eastern Indonesia. It has interests also in …you never guessed: palm oil.

Bosowa’s factory is linked to Multi Agro’s subsidiaries and is located in Aceh Jaya.

On the 30th of June 2015, PT Bosowa Megalopolis, a subsidiary of PT Multi Agro Gemilang Plantation, Tbk (MAGP) has gained an additional permit for an area of 3,000 hectares in Sumatera to develop new palm tree plantations.

There are so many companies that have a stake in Sumatra that it’s hard, without extensive investigation to determine who’s responsible for the blazes in each forest.

According to Time magazine (15th September 2015), hundreds gathered in Riau’s capital city Pekanbaru, where officials have issued a state of emergency, and were seen crying and praying for rain in front of the governor’s office.

One of the business partners of Jusuf Kalla is Chairul Tanjung, whom he just opened a new theme park with. Chairul Tanjung runs Para Group, which includes CT Corp, a company that has interests in – voila, palm oil. 

Now, to be clear I am not alleging corruption, collusion or nepotism. I’m trying to point out how deep this problem actually is.

What they have is a combustible mix of poverty and corporate greed, each willing to exploit the other. There are people, both rich and poor, powerful and weak, all with a stake in burning large plots of land in a bid to clear the way for commercial crops.

Singapore can do little. We need them more than they need us.

What are our options really? Sanction them? The Indonesians will laugh their head off and ask you to please go ahead. No use going the “tough talk” route either because we’ve had a history of military friction with them and we really do not want to end up in pointless and childish war of words.

Meanwhile, people are choking on smoke that soars up to 2000 PSI. Children and the elderly are coughing their lungs out. Diseases are developing in people. We do not yet know of the long term effects long term exposure to the smog will have on our lives.

With these things plaguing their conscience, I wonder how the CEOs and government leaders sleep at night.

Oh yes, with a state-of-the-art air conditioner and industrial strength air filter of course.

 

 

 

 

About the author

Benjamin Chiang

Benjamin Chiang is an enthusiast of good advertising, deep thinking, labour issues and chocolate. He writes also at www.rangosteen.com and occasionally on Yahoo!

The views expressed are his own.

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