Meet the S. Korean Companies Destroying Indonesia's Virgin Rainforest

In the 1850s, travelling British naturalist Alfred Russel Wallace described New Guinea as “a country which contained more strange and new and beautiful natural objects than any other part of the globe.”

Almost 150 years later, American ornithologist Bruce Beehler echoed Wallace’s sense of awe, calling part of the island “as close to the Garden of Eden as you’re going to find on Earth.” Tree kangaroos, birds of paradise, cassowaries and giant rats are merely the most flamboyant rock stars of a world brimming with unique flora and fauna, much of it still undiscovered.

Wallace had witnessed the fringes of the huge island and knew that its untold natural wonders lay largely undisturbed, nestled in the folds of “rugged mountains, retreating ridge behind ridge into the interior, where the foot of civilized man had never trod.”

But Beehler and his team of scientists combed the remote Foja Mountains at a time when New Guinea’s “lost world” was rapidly being found by white European settlers, its resources being converted into cash at the expense of its local people and its incredible biodiversity. The western part of the island was now occupied and administered by Indonesia, and the government in Jakarta was eager to collude with big business to “develop” the region known by its people as West Papua. 

Today, one of the world’s last major untouched rainforests is being cut down, burned and erased forever by some of South Korea’s biggest companies. These firms are playing a leading role in destroying West Papua’s unique ecosystem while polishing fraudulent green credentials at home.

Subsidiaries of prominent South Korea’s chaebol (family-run conglomerates) including POSCO and Samsung, plus South Korean-owned Indonesian conglomerate Korindo Group, have been cutting down primary forest to make way for oil palm plantations, abusing the rights and livelihoods of local people and, in some cases, burning felled timber to clear rainforest land — a practice illegal under Indonesian law.

More disturbingly, the activities of these companies receive little negative coverage in the South Korean media, where the companies are often praised for their commercial success. The corporations involved apply liberal doses of greenwash to gloss over their environmental malfeasance.

Last corner of paradise

West Papua, Indonesia’s easternmost region (comprising, confusingly, the administrative provinces of West Papua and Papua, and bordered to the east by the independent state of Papua New Guinea), is home to one of the world’s last great rainforest wildernesses, a cornucopia of biodiversity. More than four times larger than South Korea, it is home to countless unique trees, plants, birds, animals and other wildlife, much of which has yet to be discovered or described by scientists.

Most virgin rainforest on the western Indonesian island of Sumatra is already gone. Its counterpart in Kalimantan, the sprawling Indonesian part of Borneo, is rapidly heading the same way. Now, even West Papua is following suit.

West Papua has been earmarked since 2011 for large-scale economic development as part of the Indonesian government’s Indonesian Economic Development Masterplan (MP3EI). MP3EI aims to accelerate Indonesia’s trajectory to “developed” nation status, in many cases by exploiting natural resources of regions so far left largely untouched.

Merauke Integrated Food and Energy Estate (MIFEE) is a typical part of MP3EI that aims to develop a large part of Merauke Regency in the south of West Papua. Described by some scholars as a “textbook land grab,” MIFEE was designed to be a “breadbasket for Indonesia,” producing crops, including 937,000 tons of palm oil, on a series of large concessions sold to investors. Virgin rainforest was conceded to Indonesian and foreign companies, to be replaced with crops such as rice, sugarcane and oil palm.

Projects like MIFEE also help further the colonization of West Papua through the migration and settlement of Indonesians from Java and other more populated islands as workers. 

Coming clean

“PL” once worked for a major Korean company in Papua but has now turned whistleblower. He acknowledged that he was formerly “an accomplice” to environmental destruction, and spoke to Korea Exposé on the condition of anonymity, citing fear of reprisals.

PL described a process where the Indonesian government grants concessions to businesses while only perfunctorily following local laws regarding the indigenous occupants of forest land.

“Indonesian law states that a company with official permission to develop forest resources must provide compensation to the indigenous inhabitants of the concession, build them housing and employ them as workers, as well as giving them 20 percent of the concession to farm for themselves,” he said.

“The compensation payment for a 40,000-hectare concession should be about 100,000 U.S dollars, but [the businessman in charge] pays local inhabitants only about 30,000 dollars.” (Here, PL named a Korean-turned-Indonesian businessman who has made a career out of obtaining and clearing rainforest concessions, including those owned or later purchased by POSCO-Daewoo and Korindo.) “He might give a bit more if they protest, but not the full amount.”

PL showed Korea Exposé grainy video footage of a traditional ceremony in a remote village, where a Korindo representative met elders to seal the land handover deal with the blood of a freshly-slaughtered chicken. “They break the promises anyway,” PL said of Korindo.

Franky Samperante, founder and director of indigenous people’s organization Pusaka Indonesia, echoed PL’s assertions that Korindo and POSCO-Daewoo had broken promises of “prosperity, economic empowerment, employment, educational facilities, profit sharing and so on.”

“Korindo and [POSCO-]Daewoo do not provide sufficient information to the public about their business plans, [and there is] much manipulation of information about land rights and benefit sharing,” said Samperante.

“Companies promise and give money, while the presence of security forces means [indigenous] people are forced to give up their rights and sign contracts.”

Stifling local opposition to such projects appears to have been facilitated by the fact that West Papua has itself effectively been an occupied colony of Indonesia since 1963, with a heavy and reportedly violent military and police presence.

Last September, NGO Mighty Earth and several other groups, including Korean Federation for Environmental Movements, released a report slamming Korindo for clearing virgin forest, illegally burning biomass to clear land for oil palm planting, and abusing the rights of local forest-dependent communities in West Papua.

Despite Korindo’s reported denials, Mighty Earth used satellite imagery to show an almost exact correlation between forest clearing by several Korindo subsidiaries and systematic, dense outbreaks of fire. Conversely, hardly any fires occurred in the remaining forest around the cleared concession areas or in existing oil palm plantations. According to Mighty Earth, of the more than 50,000 hectares of forest cleared by Korindo since 1998, 11,700 have been primary forest — that which has never been subject to human interference. 

Mighty Earth campaign director Deborah Lapidus told Korea Exposé that Korindo “appears to have maintained the moratorium since reinstating it after we exposed the breach. However, it could decide to start up the bulldozers again at any time. So the 75,000 ha of forests remaining in its concessions are at extreme risk.”

Korindo certainly appears to be a damaging player in Indonesian palm oil, but it’s not the only one. In 2015, Norway’s Government Pension Fund Global divested itself of holdings in POSCO and Daewoo International Corp (the latter is a subsidiary of the former that renamed itself POSCO-Daewoo last year) due to perceived “risk of severe environmental damage”: namely, more clearing of primary forest by Daewoo subsidiary PT Bio Inti Agrindo (BIA) in Indonesia.

POSCO-Daewoo communications official Kim Choong-soo referred Korea Exposé to PT BIA’s 2016 environmental and social report in response to a request for verification of these allegations. The report makes no mention of primary or virgin forest, merely stating that its code of conduct includes “protect[ing] High Conservation Value areas (HCVA) and striv[ing] to conserve biodiversity.”

“Additionally, we plan to proceed with HCVA delineation work with specialists to clearly distinguish HCVA zones within operating sites,” the report states, though evidence suggests the company has already cleared at least 10,000 ha of primary forest since 2012. The report also claims that PT BIA does not engage in burning and that it obtained “free, prior and informed consent” from local communities and indigenous people before starting work on its Papua concession. 

The alleged exploitation by South Korean businesses is not confined to West Papua: On the northwestern Indonesian island of Sumatra, Samsung Group subsidiary Samsung C&T was heavily criticized in a December 2016 report by Korean Transnational Corporations Watch (KTNC Watch), a coalition of NGOs and other groups, for its negative effects on the human rights of workers and local community members.

Adverse impact on workers included child labor, exposure to toxic chemicals, labor and contract conditions and poor living conditions. Local indigenous people were harmed from water shortages due to plantation irrigation canals, water pollution, having their forest-based livelihoods threatened, land disputes and payment of bribes by Samsung C&T to undermine the unity of the local communities.

In response to these allegations, Samsung C&T issued a statement saying, “The material published by APIL in December 2016 is based on the unilateral claims of certain locals and differs somewhat from the truth.” The company emphasized that it was “working continuously to create a safe and eco-friendly workplace.”

Meanwhile, in yet another development, fellow subsidiary Samsung SDS entered a strategic partnership with Korindo Group in June, prompting Lapidus at Mighty Earth to describe it as “an unholy alliance of Korean companies exploiting Indonesian resources and people.”

But businesses that seem to regard Indonesia’s people and nature as a giant cash cow do have a source of vulnerability: their revenue streams. In 2016, several of the world’s biggest palm oil traders stopped using Korindo’s palm oil. In June of 2017, the Forest Stewardship Council (FSC) accepted a formal complaint against Korindo by Mighty Earth — if it is upheld, several Korindo subsidiaries could lose their FSC certification, leading to a loss of business from companies who only buy FSC-certified timber.

(FSC certification “ensures that products come from responsibly managed forests that provide environmental, social and economic benefits,” according to the FSC website.)

Whether such activities are enough to undermine the profitability of rainforest destruction and human rights abuses altogether remains an open question. PL believes it will make no difference:

“It doesn’t matter if [palm oil traders] Musim Mas and Wilmar stop buying from Korindo,” he said. “There’s so much demand from smaller companies that they can still easily sell it.”

Korindo representatives sent Korea Exposé a series of FAQ lists that partially addressed the allegations against the group. “We do not develop…in virgin rainforest areas,” Korindo stated, adding that it only used “land for palm oil that has been zoned for development by the Indonesian government,” that it “does not utilize burning to clear land” and that all due process had been followed in reaching deals with traditional landowners.

One recurring theme in Korindo’s PR material is the alleged demanding of additional compensation by indigenous people after a deal had been sealed.

Without access to all local communities involved, it is hard to verify these claims. But overriding questions remain: Is the Indonesian government going to keep on allowing the deforestation of such irreplaceable areas until there are none left? To what extent are the livelihoods of indigenous communities threatened in all this “development”?

Effective greenwash or lack of interest?

One puzzling aspect to such activity by South Korean firms overseas is the lack of criticism from the South Korean press, and a lack of restraining measures from the South Korean government.

On the contrary, most domestic reports shower Korindo with compliments, commenting on its planting of trees overseas, its receiving massive investment from a Korean securities company (in late 2016, just two months after Mighty Earth accused Korindo of burning forests), or the stature of Korindo CEO Seung Eun-ho as an international businessman and a pillar of Asia’s expatriate Korean community.

Here is a typical excerpt from a blurb in a 2011 documentary about Seung aired on Arirang TV, a state-owned English-language broadcaster: “In this episode we listen to the story of this mogul who successfully built a business empire on foreign turf by embracing the local culture and cooperating with his 200,000 employees.”

“The trust placed in Seung by the various departments of the Indonesian government is almost infinite, inviting him to practically all important events and meetings. In fact, Korindo is setting the future foundation for green business in Indonesia with its 100 percent use of recycled scrap, afforestation and bio-energy projects.”

South Korean coverage of POSCO-Daewoo is similarly positive, such as a report by economic news outlet EBN that mentions the company’s “development of future food [sources]” with no hint of the adverse effects on the ground in West Papua.

Korindo itself generates copious amounts of greenwash, with efforts such as this promotional video posted to YouTube in 2016:

 

“South Korean media are interested in whether Korean companies abroad make money,” Kim Jong-chul, an attorney at Advocates for Public Interest Law (APIL) and an author of KTNC Watch’s 2016 report on Samsung C&T’s activities in Sumatra, told Korea Exposé. “They don’t care how.”

Kim’s report concluded by highlighting the need for the South Korean government to protect foreign citizens from human rights violations by South Korean companies, saying “the [South] Korean government’s offices in Indonesia appeared to utterly disregard this role of monitoring and protection.”

The G20 Hamburg summit earlier this month resulted in a declaration by world leaders that explicitly stated the need for sustainable global supply chains: “We commit to fostering the implementation of labour, social and environmental standards and human rights in line with internationally recognised frameworks.”

“South Korean media barely reported this,” said Kim at APIL. “Many countries now have national action plans specifically regarding the conduct of their companies overseas. From an international perspective, the South Korean government clearly has a duty to protect foreign citizens” from the actions of South Korean firms.

In June this year, the United Nations Working Group on business and human rights concluded its first official visit to South Korea with a statement saying, “More needs to be done, both by the [South Korean] government and businesses, private and public, to strengthen the protection against business-related human rights abuse at home and abroad.”

While the South Korean government fails to act, more local communities in West Papua will fall victim to corporate abuses. More species will be bulldozed and incinerated into oblivion.

PL thinks the problem is bigger than the South Korean government. “You can’t stop deforestation in Indonesia because it makes money for Indonesian government officials, furthers the [economic] development of Papua and makes money for Koreans. The Korean government doesn’t even know what’s going on,” he said.

 

Cover image: Felled rainforest on a Korindo concession in Papua (Source: Mighty Earth)