Councillor jailed for blackmailing palm oil company

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)