Councillor jailed for blackmailing palm oil company

BENGKULU (JP): A district court in Bengkulu sentenced on Saturday a local councillor and a "legal consultant" friend to seven years in jail for provoking locals to illegally demand land compensation from a foreign palm oil investor.

The panel of judges at the Argamakmur District Court in North Bengkulu regency found Mahidin Atu, deputy speaker of the local council, and "legal consultant" Zulkifli Ismail guilty of stirring up the villagers to destroy and burn PT Agro Muko's offices and buildings in North Mukomuko, costing the company Rp 900 million (about US$109,000).

Ismail claimed locally he was a legal consultant despite the fact he is a junior high school dropout.

The villagers demanded that Agro Muko pay Rp 16.05 billion in land compensation.

Agro Muko is a joint venture between Indonesian, British, German and Belgian companies.

Presiding judge Solahuddin said Mahiddin, as a public figure, was not supposed to use violence and blackmail in defending the public's interest.

Zulkifli, as a legal consultant, was supposed to uphold the law rather than violate it, the judge further said.

Both defendants claimed their move was aimed at defending the rights of the local villagers but the judges found that both defendants had asked the villagers to share one-third of the compensation as a success fee.

"I regret the actions of both defendants, given the fact that the government is now taking pains to invite foreign investors to improve the country's economy," Solahuddin said.

"The defendants' action has created a sense of legal uncertainties among foreign investors," he added.

Solahuddin stated Agro Muko's operations had brought a positive impact to the provincial economy, he said.

Mahidin, from the Indonesian Democratic Party of Struggle (PDI Perjuangan), and his family members who were attending the court session, broke into tears after Solahuddin read out the panel of judges' decision.

Lawyer Hupoyo said he was satisfied with the court's decision despite the fact the jail term decided by the judges was two years lower than his demand.

He said the case could become be a good precedent for other similar cases elsewhere in the country.

"This is the first court decision in Bengkulu in favor of foreign investors," he said.

Agro Muko also welcomed the court's decision.

"We have to protect the rights of the foreign investors. Once they don't feel safe, they will run away," company advisor Murniyati said, adding the supremacy of law was the basic requirement for the country to attract investors.

Chairman of the Indonesia Palm Oil Producers Association Derom Bangun told The Jakarta Post on Monday that the court's decision was a good step for Indonesia to ensure investors about the country's legal certainty.

"It shows foreign investors that our country still has a willingness to enforce the law", Derom, who is also chairman of ASEAN Vegetable Oil Club, said.

Lawyer Ansjari Bachsin, representing Mahiddin and Zulkifli, told reporters after the court session he would appeal the decision.

He said Agro Muko had appropriated almost 4,000 hectares of land from the villagers but, thus far, had paid compensation to only a few of them.

He said the lives of the villagers were miserable because they had lost their land and had no jobs, given the fact that the company preferred to recruit outsiders to the locals.

Agro Muko started operating in Argamakmur in 1987 with a initial concession of 10,000 hectares. Since then, the company has expanded its palm oil plantation to 22,000 hectares.

The villagers of Teras Terunjam, Lubuk Sahung, Air Dikit, Pondok Linang and Saribulan claimed 4,000 hectares of the 10,000 hectares of land initially appropriated by the company belonged to their ancestors, and as such, had to pay them compensation.

However, the company said based on information from the local government, the land belonged to the state and the villagers were squatters.

The company was, thereby, only obliged by the local government to pay compensation for the plants grown by the villagers.

The company said it had paid compensation to the villagers for plants they had grown prior to the operations of the company but the villagers started protesting late last year to demand more compensation.

The protests culminated on Jan. 17, 2000 when about 500 villagers led by Mahiddin and Zulkifli went on the rampage, destroying and burning most of the property at the company's home base in North Mukomuko.

Many plantation and mining companies across the country have been facing troubles from local communities amid the breakdown of law and security following the resignation of former president Soeharto in 1998.

The villagers, who dared not speak out during Soeharto's administration, now claim investors wantonly took over their land without full compensation. (02)