ST25052007-Palangkaraya/Demond Wee/ A palm oil plantation worker is spraying herbicide in central Kalimantan on the island of Borneo, Indonesia had the fastest pace of deforestation in the world between 2000-2005, with an area of forest equivalent to 300 soccer pitches destroyed every hour,
KUALA LUMPUR: FIMA Corp Bhd
has begun legal proceedings to challenge the order by the National Land Agency (BPN) under Indonesia’s Agricultural and Spatial Planning Ministry to revoke its subsidiary’s land cultivation rights (Hak Guna Usaha or HGU) affecting 3,691.9ha planted area.
In a filing with Bursa Malaysia, the plantation and security printing company said its 80%-owned Indonesian subsidiary, PT Nunukan Jaya Lestari (PTNJL), had decided to challenge the Ministerial Order to revoke its HGU with immediate effect.
The order, received on Aug 23, was premised on the HGU being improperly issued due to administrative irregularities performed by certain officers of the National Land Agency, East Kalimatan, at the time of the issuance of the HGU in 2003 which resulted in parts of the area within the HGU to overlap with forestry areas.
The planted area affected represents nearly 30% of Fima’s oil palm planted area in Indonesia (based on data from Fima’s portal).
On Friday, PTNJL filed an application in the State Administrative Court (Pengadilan Tata Usaha Negara or PTUN) in Jakarta seeking an order to annul the Ministerial Order on several grounds.
These include PTNJL, a bonafide owner of the HGU for value, having good title to the HGU as it has complied with and fulfilled all procedural requirements and obligations in obtaining it.
The company also contended that the reasons raised by the defendant, on which the Ministerial Order was issued (i.e. the administrative irregularities occasioned by the BPN officers at the time of the issuance of the HGU in 2003) were invalid.
“They (the reasons) are not within the contemplation of nor fall within the reasons set out in various substantive laws that would allow a HGU to be revoked and therefore could not form the legal basis for the Ministerial Order,” Fima said.
Thirdly, it said the Ministerial Order contravened the “general principles of good governance” and violated the provisions of various substantive laws in Indonesia.
PTNJL also sought an order from PTUN to postpone the enforcement of the Ministerial Order pending full and final determination of the matter by the Indonesian courts.
“Notwithstanding the Ministerial Order, the local government in the Nunukan district, in the interest of good order, has given its undertaking and allowed PTNJL to continue to lawfully operate its plantation operations until the final determination of the matter by the Indonesian courts,” it said.
“Based on current circumstances, the board is of the opinion that this suit will not have any immediate material operational and financial impact on the group.”
Fima did not give an estimate of the impact on its earnings if the Ministerial Order were retained.
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