Major new investigation exposes role of palm oil industry in bankrolling the corruption of Indonesian democracy

An in-depth article released today reveals how the global palm oil industry, which supplies an ingredient found in thousands of products on supermarket shelves in Europe and the US, is driving the corruption of elections in Indonesia, the world’s third-largest democracy.

Ghosts in the machine, from Earthsight’s The Gecko Project and environmental news site Mongabay, exposes how dark money from the palm oil industry is flushing into regional elections, allowing corrupt politicians to entrench their positions and channel land to plantation firms.

The investigation examines the events leading up to the arrest of Indonesia’s highest-ranking judge, Akil Mochtar, in October 2013. In the wake of Akil’s arrest it emerged that he had accepted millions of dollars from a number of candidates involved in regional elections across the Southeast Asian nation. The results of the many of these contests had been disputed before his court, the highest in the land, to be decided impartially.

Akil’s case, the biggest corruption scandal in years, electrified Indonesia, as it became clear that the judge had become a part of the corrupt system he was supposed to police. In 2014 Akil was jailed for life, but the source of the money used to bribe him remained in the shadows. Until now.

Ghosts in the machine traces the money to a series of land deals worth US$9.2 million, cut in the heart of Borneo in the months leading up to the regional elections in 2013. The investigation pieces together the web of shell companies and middlemen who play a central role in moving money from palm oil firms to politicians, and land licenses for plantations in the other direction. It draws from company documents, court records, and interviews with sources in Jakarta and Borneo, including confidential sources close to the people involved.

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Read Ghosts in the machine here.

Read commentary from Earthsight making the case for action on the collusion underpinning Indonesia’s deforestation and land rights crisis here.

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One of these sources, who acted as a fixer for one of the politicians central to the case, likened the relationship between palm oil firms and politicians to “a cycle of evil”.

The deals in this case represent an area ten times the size of Manhattan, covering some of the best rainforest left on the island of Borneo, inhabited by thousands of indigenous people. Ghosts in the machine reveals how the need to bankroll a corrupt and expensive election drove the politician, a district chief named Hambit Bintih, to issue licenses that were against the interests of villagers in his jurisdiction, who had repeatedly protested against the prospect of large-scale plantations.

The Malaysian company that benefited from the land deals, is selling palm oil to traders that supply supermarkets across Europe and the US.

The available evidence suggests this case is just the tip of the iceberg. Ghosts in the machine builds on an investigation released by Earthsight and Mongabay last October, titled The making of a palm oil fiefdom, which chronicled how two of the industry’s biggest companies, Wilmar and the Triputra Group, built their businesses by buying assets from the family members and cronies of another politician in Borneo, a district chief named Darwan Ali.

The corrupt use of money in elections is an established and growing problem in Indonesia. The nation’s anti-graft agency has committed to cracking down on what has become known as “money politics”, as districts, towns and provinces across the country prepare for another round of elections this June — including in Gunung Mas, the district where the land deals behind the bribery of Indonesia’s top judge took place.

Ahead of another round of regional elections this June, candidates are being arrested for engaging in corrupt acts to bankroll their campaigns on an almost weekly basis. Ghosts in the machine reveals how more illicit, secretive deals may be going on under the radar; and how even if the politicians are busted, the palm oil firms stand to benefit once again.

Tom Johnson

Head of Research

Earthsight

www.earthsight.org.uk

Earthsight Projects:

www.thegeckoproject.org Investigative reporting on land deals, corruption and rights

www.bad-ag.info Monitoring illegal conversion of forests for agribusiness

Choice Cuts: How European & US BBQs are fuelled by a hidden deforestation crisis in South America

www.timberinvestigator.info Helping Activists and Communities Investigate Illegal Logging & Trade

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