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Deforestation in Central Kalimantan. Source: Greenpeace UK

Executives of Singapore-linked palm oil firm’s subsidiaries arrested by Indonesian authorities in bribery probe

Indonesian anti-graft officials arrested seven people, including one senior executive of palm corporation Sinar Mas Agro Resources and Technology, on Sunday (28 Oct).

Deputy chief of the Corruption Eradication Commission (KPK) Saut Situmorang declared vice president director of Sinar Mas Agro, Edy Saputra Suradja, chief executive of PT Binasawit Abadi Pratama, Willy Agung Adipradhana, and some members of Central Kalimantan parliament as suspects in the bribery case, according to Reuters.

Both Sinar Mas Agro and Binasawit are subsidiaries of Singapore-listed palm oil giant Golden Agri-Resources Ltd.

Mr Situmorang added that the suspects were accused of bribing the MPs to prevent them from investigating Binasawit's plantation permits, as well as complaints from residents regarding palm processing waste being disposed near Sembuluh lake in Central Kalimantan allegedly linked to Binasawit.

Around 240 million rupiah (approximately S$21,817) of bribe money was seized by the authorities, he added.

On the heels of the arrests, Golden Agri said: “The company will cooperate fully with the ongoing investigation and hopes that the issues can be resolved as quickly as possible,” adding that the case is “gravely concerning and regrettable”.

A statement on behalf of both Sinar Mas Agro and Binasawit assured that all parties have given the authorities full cooperation regarding the investigation.

Indonesia, the world's largest producer and exporter of palm oil, is under pressure to change its production into a more sustainable one, following calls from environmentalists who have expressed concern over the mass deforestation resulting in the loss of habitat for orangutans, as well as questionable practices surrounding the production of palm oil as a whole.