10 July 2015

PT Barumun Agro Sentosa

Jl. DC. Mahakam Blok C No. 14 Padang Golf Polonia

Medan 20157, Indonesia

Attn: Bapak Husin, Assistant to Director

Re: Complaint Case PT Barumun Agro Sentosa (PT BAS)

Dear Bapak Husin,

With reference to the complaints lodged by Hepli Harahap, the chairman of Gerakan Pemuda Untuk

Keadilan Rakyat (GPUKR), Ujung Batu, District Padang Lawas Utara, Sumatera Utara dated 19th January

2015 and his letter on 16th February 2015 against PT BAS respectively, as well as your letter dated

9thFebruary 2015 and 24th February 2015 is referred to.

The RSPO Secretariat has conducted a verification process (Please see the Attachment 1. Chronology of the

complaint). On 18 June 2015, the Panel made a decision that the substance of the complaint is not genuine

and the evidence submitted is weak. Therefore, the Complaint Panel has agreed to close the case.

Thank you.

Sincerely,

Amalia Falah Alam, Indonesia Complaint Coordinator – on behalf of the RSPO Complaints Panel

CC: Bapak Hepli Harahap, Gerakan Pemuda untuk Keadilan Rakyat

Attachment 1. Chronology of the complaint

1. RSPO received a complaint on 19th January 2015 from the Complainant, Hepli Harahap against PT BAS.

The complaint concerning land and the non-payment of IDR7,5 billion in compensation. In response

to this complaint, the RSPO has asked clarification from PT BAS on the allegations.

2. On 9th February 2015, PT. BAS sent a formal letter to RSPO with response to the allegations, which

explained these follow points:

a. PT BAS has complied with the laws and regulation in Indonesia.

b. PT BAS has a grievance system by which the community can lodge a complaint and PT. BAS never

received any complaint related to this land.

c. PT BAS is committed towards the community and environment matters, and has conducted a

Social Impact Assessment (SIA).

d. PT BAS is committed to its Corporate Social Responsibility (CSR) programme.

e. With regards to the land claimed by the Complainant, PT BAS holds an official permit in

accordance with the laws of Indonesia.

f. PT BAS has indicated its willingness to enter into negotiations with the Complainant but the

Complainant chose to do a demonstration against the company.

g. PT BAS was unable to find GPUKR’s office at the address that was given by the complainant

h. PT BAS stated that the allegations lodged by the Complainant was not supported by adequate

evidence.

3. RSPO received the reply from the complainant on 16 February 2015 in response to PT BAS letter

dated 9th February 2015, which has several points as below:

Point 1

a. Section 1 of the HGU PT. BAS No. SK.67/HGU/DA/86 dated 2 December 1986 states that “the Hak

Guna Usaha (HGU) can be invalid if PT BAS does not comply with the applicable conditions”.

b. If there is an area that is managed by the community, PT. BAS has an obligation to compensate

them. One of the obligations is “If there is land cultivated/occupied by local community in the

HGU area, PT BAS has an obligation to complete the compensation to the community in a best

possible way”.

c. From the minutes of ground checking exercise (Risalah Pemeriksaan Tanah B) by BPN (National

Land Authority) North Sumatera Province No. 12/PPT/B/1985 dated 12-14 June 1985, page 3, it

is specified that “in the area of PT Mujur Plantation, about 1.672 Ha is cultivated by the

community”. In the JANTOP-TNI AD map of 1977 and printed in 1982, the land cover of Gariang

Sipanunda area was rubber plantation, according to the map legend/information.

d. Haji Soleh Hasibuan who owned the rubber plantation in Gariang Sipanunda (25 Ha) and bought

it from Bongsu Siregar in 1980, who bought the land earlier from Djalaut Baginda Naga in 1957.

Djalaut Baginda Naga in turn bought the land from Baginda Raja Amas in 1955.

e. The community of Luat Ujung Batu are indigenous people that do not own legal document to

show ownership of the land. They only have the ‘surat jual beli’ (Letter of land sale and purchase)

as land ownership evidence.

f. The land owned by Haji Soleh Hasibuan located in Gariang Sipanunda which was ‘grabbed’ by PT

BAS has not been compensated. Haji Soleh Hasibuan has been trying to get his compensation

since 1993, but so far it has not been settled by PT BAS.

g. In the SK.67/HGU/DA/86, it is specified that the Minister of Forestry has agreed to release the

forest area into the HGU of PT BAS through a land swap based on regulation. In this case, PT First

Mujur Plantation (previous name of PT BAS) agreed to provide a replacement area by setting up

a compensation fund of IDR7.500.000.000 (seven billion and five hundred million rupiah). To

date, the said compensation has not yet been paid. This is found in the letter from the Head of

the Forestry Department of North Sumatera Province No.4079/Kwl-6.3/1999, dated 1 November

1999.

h. The Decree of the Minister of Home Affairs No. SK.67/HGU/DA/86 dated 2 December 1986

specified that “If PT First Mujur Plantation (PT FMP) does not fulfill the obligations mentioned,

then the HGU process will be automatically canceled”. Since PT BAS did not fulfill their obligation

consequently, SK.67/HGU/DA/86 is automatically canceled. Thus, PT BAS does not have the

jurisdiction to take the land under the regulation.

i. The area of the PT BAS plantation exceeds the land area mentioned in the permit.

j. Based on the results of the exercise conducted by BPN of North Sumatera No.7/12/IV/93 dated

15 May 1999, the area of PT First Mujur Plantation (PT FMP) is + 17.270,94 Ha, whilst in the HGU

the area of PT FMP is + 12.641,50 Ha.

Point 2

a. Hepli Harahap will also complain to ISO 9001:2008, ISO 14001:2004, Bureau Veritas, ISCC, and

Proper against PT BAS.

b. It is alleged that the company is also responsible for the destruction of Danau Meluak which has

‘dried up’ due to the plantation activities of PT BAS.

Point 3

a. Seeking clarification on whether the CSR was done by PT BAS and has met the requirements as

specified in the law i.e. UU No. 40/2007.

b. Based on the regulation of the Ministry of Agriculture No. 26/PERMENTAN/OT.140/2/2007, the

plantation company must build plasma for community of at least 20% from the total area of the

plantation.

c. The Regulation of the Ministry of Agriculture No.98/Permentan/OT.140/9/2013, the plantation

company must facilitate the development of community plantation of at least 20% from the area

of IUP-B or IUP.

Point 4

a. It is true that PT BAS had started communication with the community.

b. However, the company never settled the issue with the local communities, who have conveyed

their objections since 1993.

Point 5

a. It is alleged that the company was helping the new Bupati (Head of District) during his election

campaign, which explains why the government in Ladang Utara District had never investigated

the allegations against the company.

b. Reiterated that he the complainant; Helpi Harahap, is one of the family members of Haji Soleh

Hasibuan and has powers of attorney to convey the allegations.

Point 5a

Hepli Harahap has sent the complete evidence of land ownership of Haji Soleh Hasibuan to RSPO,

and will be sending other supporting documents if needed.

Point 5b

Since the local community has limited resources and knowledge, it is not possible for them to file

these allegations to the courts of law and go through a legal process.

Point 5c

Several meetings have been conducted to settle the issue, but since there is a lack of will from the

company, the issue has not yet been settled. Even then, the community will keep trying to pursue

their rights for the land.

Point 5d

It is was explained that Gerakan Pemuda untuk Keadilan Rakyat (GPUKR) is a local community

organization. The official documents on GPUKR will be sent to RSPO if needed.

Point 5e

Hepli Harahap has sent all the evidence of Haji Soleh Hasibuan’s ownership of the land and explained

the chronology of events to the company. He also reiterated that none of the communities have the

Sertifikat Hak Milik (land ownership certificate).

Point 5f

The community did not receive any information from the RSPO/ISPO auditor.

Additional note: the community has also reported this issue to the government and carried out

demonstration at:

DPRD office of North Sumatera (Regional House of Representative) on 5 February 2015. The

government agreed to follow up on the community’s grievances.

BPN Office of North Sumatera Province on 5 February 2015.

BPN will confirm the results of their exercise and clarify the issue with BPN South Tapanuli and

follow up on their grievances.

PT BAS office in Medan.

PT BAS was willing to pay the compensation for the replacement area of IDR7,5 billion.

4. Conference Call between RSPO Secretariat with PT. BAS on 3 March 2015. The result of the meeting

is as follows:

a. PT. BAS revealed that the land disputes in North Sumatera is common and the complaint is not

genuine. The Complainant has his own personal agenda.

b. Other family members of Haji Soleh have never complained to PT BAS.

c. With this regard, RSPO Secretariat should ask the complainant to submit, the “Power of Attorney

Letter/Surat Kuasa” as proof that the Complainant is representing Haji Soleh or his family.

d. RSPO Secretariat will ask the complainant to furnish information on the exact location and the

coordinates of the claimed land (25 Ha).

e. The map submitted by the complainant is not the HGU map and PT BAS does not know from

whom the complainant got the map.

f. Regarding the land compensation process, PT BAS only dealt with the Head of Village and paid

the compensation to him.

g. PT BAS never received any documents signed by the community.

h. The complainant cannot show evidence on the legality of the land ownership; he only showed the

Akta Jual Beli/transaction receipt; that cannot prove if the owner has resold the land to another

party.

i. PT BAS met with the complainant 3 times.

The complainant has alleged three main demands:

(i) The 25 hectares of the land that is owned by Haji Soleh to be compensated;

(ii) PT BAS has a debt with to the Government of Indonesia of IDR 7.5 billion. This allegation

was based on the a Letter of the Ministry of Forestry SK.67/HGU/DA/86, Letter

No.1148/Menhut-II/97 dated 28 September 1997 and Letter No. 1206/Menhut-

VII/1997 dated 8 Oktober 1997 to the Governor of North Sumatra that approved PT FMP

to use the land and to compensate for the forest amounting to IDR 7.5 billion;

(iii) The land that managed by PT BAS was larger (± 17.270,94 Ha) than the HGU (± 12.641,50

Ha). This allegation was based on the results of assessment by Badan Pertanahan

Nasional/National Land Agency of North Sumatera No. : 7/12/IV/93 dated 15 Mei 1999.

5. RSPO had a meeting with the complainant on 4th March 2015. The results of the meeting is as

follows:

a. Haji Soleh Hasibuan is the husband of the Complainant’s aunt. Both Haji Soleh and his wife

have passed away.

b. Complainant believes that the land (25 hectares) owned by Haji Soleh has not been

compensated. Complainant is open to PT BAS carrying out ground verification.

c. Complainant alleged that PT BAS has polluted Danau Meluak.

d. RSPO Secretariat has asked the complainant to send :

i. Letter of authority(Power of Attorney) from the family of Haji Soleh;

ii. The GPS coordinates of the land (25 hectares) owned by Haji Soleh;

iii. The letter from the Head of Village Ujung Batu, which can show the list of persons who

had been compensated by PT BAS.

6. The additional evidence was sent by the complainant to the RSPO Secretariat on 6thMarch 2015.

7. RSPO Secretariat received an email from PT. BAS with an attachment i.e. a letter to Police Department

against Bapak Hepli Harahap on 6thApril 2015.

8. PT BAS has alleged that Bapak Hepli Harahap was providing false information to public, organizing

demonstrations and extorting money from the company. This allegations were sent to the police after

the publication of a report in the local newspaper about the demonstration and the subsequent

assault on GPUKR by a group of unknown persons. The news was published in Daily Waspada dated

14thJanuary and 26thFebruary 2015, in the Daily Medan Bisnis dated 26thFebruary 2015, and

Koarnews, an online news site on 17th and 24thFebruary 2015.

9. RSPO Secretariat had another physical meeting with PT. BAS on 5 June 2015.

10. PT BAS explained that they reported the complainant to the police because the complainant gave

false information to the media and asked for money (IDR 150 million).

11. To date, the RSPO has not received any further response or clarification from the complainant despite

many attempts.