Oil palm company's scam reported

Tuesday, November 11, 2008 The Jakarta Post

Oil palm company's scam reported

Jon Afrizal , The Jakarta Post , Jambi Tue, 11/11/2008

Batanghari Regent Syahirsah SY has filed a report to local police over an alleged scam by a private oil palm company they were involved with in a joint venture.

The report, dated Oct. 10, 2008, alleges PT IIS failed to pass on oil palm proceeds to the Batanghari regency from 2001 to 2004.

The inconsistency came to light when the regency administration ended its contract with the company in the oil palm estates of Danau Bangko, Singoan and Sangkilan in Muarabulian district.

Since Batanghari regency began managing the estate for themselves, proceeds from the plantation have allegedly soared.

When managed by PT IIS, profits ranged from a maximum of Rp 20 million to a low of Rp 3.57 million. Under regency control, average profits have increased to Rp 50 million (US$5,500).

In June this year, the Batanghari regency administration handed over management of the oil palm plantations to CV Putra Tunggal and received around Rp 273 million per month from the joint venture.

Batanghari Police chief Adj. Sr. Comr. Tata Suwarta has questioned a number of regency officials over the report findings.

"We have interviewed Batanghari regency officials, such as Erpan, Zuhdi Asran and Mulawarma. We have also questioned those from PT IIS," said Tata recently.

However, police would not confirm whether or not the case would be categorized as graft until the investigations were complete. "We are still waiting for a statement from the plantation office head who is still in Jakarta," said Tata.

A manager from PT IIS, Yuhari, declined to elaborate but said PT IIS had so far handed over proceeds to the regency administration.

"We have transferred funds to the Batanghari regency administration. We have explained this to the police," he said.

The oil palm estate spans 82 hectares and was part of the remaining land to be handed over by PT IIS to the administration in 2001 under a plasma conversion agreement.

In the agreement PT IIS, as plantation holder, was required to set aside 30 percent for credit installments and 40 percent for the plantation's operational funds.

The remaining 30 percent of harvest proceeds were supposed to be transferred to the regency each month as an earnings contribution.
The land transfer report -- signed by Dahri Nasution from PT IIS and former Batanghari regent Abdul Fattah -- was witnessed and approved by local legislative head Burhanuddin Mahir. The report revealed that during the planting period of 1992 to 1993, the company turned over Rp 10 million per plot.

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