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Minister of Environment v. PT Kalista Alam - decision

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On November 8, 2012, the Indonesian Ministry of Environment (the MoEF) filed a tort-based lawsuit against a corporation, PT Kalista Alam, for damage caused by land clearing. The lawsuit is based on Articles 88 Environmental Protection and Management Act (the 2009 EPMA) and article 1365 of Indonesian Civil Code. The Plaintiff argued that the defendant had drained and burned the peatland which caused fires inside the concession areas. The plaintiff also argued that the defendant failed to provide prevention tools to avoid fires in the concession. The MoEF then explained forestry regulations in Indonesia obliging every license holder to provide fires control measures—in which the defendant considered violating its obligations. The MoEF claimed that fires inside the concession had caused significant environmental damages. These damages comprise of ecological damage, damage to biodiversity and carbon release, and economic losses due to land degradation. Accordingly, the MoEF sought compensation of IDR 115 billion and restoration costs amounting to IDR 250 billion. 

For the carbon losses, the MoEF stated two type of climate damages caused by the defendant. Firstly, the fires inside the concession areas had released 13,500 tC into the atmosphere. The MoEF set that the carbon release cost is IDR 90,000 per ton which costs the defendant of IDR 1.2 billion. Secondly, the MoEF claimed that the fires had also reduced the ability to absorb CO2 of the peatland. A total of IDR 425.3 million was required to repair the losses. 

On January 8, 2014, the district court granted half of the plaintiff’s claim against the defendant. Nonetheless, the district court decided that the defendants had violated the regulations and were liable for all environmental losses. On August 15, 2014, the Court of Appeal upheld the lower court decision. On August 28, 2015, the Supreme Court upheld the district court decision and refused a cassation from the defendant. On February 10, 2017, the defendant filed request for an extraordinary review (peninjauan kembali) and brought new evidence. The defendant argued that judges on lower court based their judgment with inadmissible evidence as regulated in Article 1866 of Indonesia Civil Code. On April 18, 2017, the Supreme Court once again rejected the request (peninjauan kembali) and upheld the lower court ruling.

Minister of Environment v. PT Kalista Alam

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Minister of Environment v. PT Kalista Alam - decision

Policy instrument

Risk

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance