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When Fines Fail, How Can Companies Be Made to Pay for Deforestation?

Nearly a year after an Indonesian court ordered a timber company to pay country's largest ever fine for deforestation, the government has been unable to collect the money, prompting campaigners to call for tougher sanctions against illegal loggers.

Merbau Pelalawan Lestari (MPL), a timber company, has launched a case review against the court's decision to impose a 16tn rupiah fine (£900m), which it incurred for illegally deforesting nearly 2,000 hectares of Sumatran forest.

Timber companies and agricultural commodity firms, especially palm oil producers, have benefited for too long from illegal deforestation in Indonesia, says Kiki Taufik, global head of Greenpeace’s Indonesia forest campaign.

“Consistent and systematic law enforcement is urgently needed to send a serious warning that other destructive plantation companies should heed: deforestation has consequences,” Taufik says. “The government must take more serious measures when companies break the law, including revoking licenses or seizing assets.”

It is not only MPL that hasn’t yet been required to pay up. Palm oil producer Kallista Alam is challenging a 366bn rupiah fine (£20.4m) levied in 2015 for using fire to clear around 1,000 hectares of the Leuser Ecosystem, a protected rainforest in Sumatra.

Tom Johnson, head of research for non profit Earthsight, echoes calls for tough government action. Asset seizures would likely create a “better disincentive” than fines, which companies are either too small to pay or which can be challenged in the courts, he states.

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