One of Indonesia’s biggest palm oil tycoons has been sentenced to 15 years in prison and ordered to pay US$2.6bn for bribing officials to allow him to convert thousands of hectares of land in Sumatra into oil palm estates, Aljazeera reported on 24 February.
Prosecutors accused Surya Darmadi of bribing several Indonesian officials in Riau Province to allow him to convert more than 36,420ha of forest into oil palm plantations under subsidiaries of his company, PT Duta Palma.
They claimed Darmadi had inflicted state losses of 73 trillion Indonesian rupiahs (US$4.8bn) through his corruption — making him the perpetrator of the biggest corruption scheme in Indonesia’s history. Darmadi was also accused of committing money laundering and tax evasion from 2002 onwards, Aljazeera wrote.
Finding Darmadi guilty of corruption and money laundering, Judge Fahzal Hendri ordered the tycoon to repay 2.2 trillion rupiahs (US$144M) that he previously owed the government and a further 39 trillion rupiahs (US$2.5bn) in state losses.
However, the judge cited Darmadi’s age and ongoing heart problems as reasons not to hand the 71-year-old a life term as requested, the report said.
Darmadi’s sentencing was a watershed as palm oil companies typically escaped legal action due to widespread corruption that had allowed them to bribe officials, Aljazeera quoted the director of Paradigma, a Sumatran NGO, as saying.
“Darmadi’s case is exceptional because we rarely see those in the palm oil industry held to account,” Riko Kurniawan said. “This is truly unprecedented.”
Indonesia is the world’s largest producer and exporter of palm oil, shipping more than 30M tonnes of palm oil products in 2022.
In a 2021 report, Greenpeace Indonesia said that oil palm plantations had been the “largest single cause of deforestation in Indonesia over the last two decades”.
The country lost 230,000ha of its primary forest in 2021, according to Global Forest Watch.
In 2018, Forbes listed Darmadi’s net worth at 20 trillion rupiahs (US$1.3bn), Aljazeera wrote.
The case was first heard in 2014 when Indonesia’s Corruption Eradication Commission accused Darmadi of bribing the former governor of Riau Province to amend forestry regulations to make it easier for PT Duta Palma to operate.
In 2022, Darmadi was accused of making payments to the former head of Indragiri Hulu District in Riau Province, who issued operating permits for five of PT Duta Palma’s subsidiaries.
Darmadi fled Indonesia in 2014 but returned to the country of his own accord last year, resulting in his arrest, the Aljazeera report said.