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A recent report from Indonesia's Supreme Audit Agency (BPK) found 115 companies are operating in forests controlled by the Ministry of Forestry. The agency called for an investigation into the companies.
The findings are based on sampling in Sumatra, Kalimantan and Maluku, among other areas. Elfian Effendi, executive director of Greenomics-Indonesia, said the number of companies operating illegally in designated forest areas is actually higher.
Effendi says that BPK has found similar transgressions in the palm oil sector, where companies have established plantations in legally-designated forest areas without the proper permits. He highlighted PT Menteng Jaya Sawit Perdana, a developer owned by Malaysian palm oil giant Kuala Lumpur Kepong Bernard (KLK) that found itself in the midst of controversy in 2011 when it allegedly cleared an area of forest protected under Indonesia's moratorium on primary forest and peatlands conversion. Effendi said BPK data showed that at least 3,827 hectares of PT Menteng's concession was in a designated forest area for which it lacked permits to develop.
A 2011 BPK report found that less than 20 percent of plantation companies and less than 1.5 percent of mining firms in Central Kalimantan had the proper licenses operate. The Ministry of Forestry estimated potential losses to the state at 158.5 trillion rupiah ($17.6 billion) in the province alone.
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