Indonesian palm oil tycoon gets15-year prison sentence

One of Indonesia’s biggest palm oil tycoons has been sentenced to 15 years in prison and ordered to pay US$2.6bn for bribing officials to allow him to convert more than 36,420ha of forest in Sumatra into oil palm estates, Aljazeera reported on 24 February.

Prosecutors accused Surya Darmadi of bribing officials in Riau Province to benefit subsidiaries of his company, PT Duta Palma. They claimed Darmadi had inflicted state losses of IDR 73tr (US$4.8bn) through his corruption – making him the perpetrator of the biggest corruption scheme in Indonesia’s history. Darmadi was also accused of money laundering and tax evasion from 2002 onwards, Aljazeera wrote.

Finding Darmadi guilty of corruption and money laundering, Judge Fahzal Hendri ordered the tycoon to repay IDR 2.2tr (US$144M) he previously owed the government and a further IDR 39tr (US$2.5bn) in state losses. However, the judge cited Darmadi’s age and ongoing heart problems as reasons not to hand the 71-year-old a life term as requested, the report said.

Darmadi’s sentencing was a watershed as palm oil companies typically escaped legal action due to widespread corruption that had allowed them to bribe officials, Aljazeera quoted the director of Paradigma, a Sumatran NGO, as saying.

“Darmadi’s case is exceptional because we rarely see those in the palm oil industry held to account,” Riko Kurniawan said.

Indonesia is the world’s largest producer and exporter of palm oil, shipping more than 30M tonnes of palm oil products in 2022. In a 2021 report, Greenpeace Indonesia said oil palm plantations had been the “largest single cause of deforestation in Indonesia over the last two decades”.

In 2018, Forbes listed Darmadi’s net worth at IDR 20tr (US$1.3bn), Aljazeera wrote.

Darmadi was accused by Indonesia’s Corruption Eradication Commission in 2014 of bribing the former governor of Riau Province to amend forestry regulations. In 2022, he was accused of making payments to the former head of Indragiri Hulu District in Riau, who issued operating permits for five of PT Duta Palma’s subsidiaries. Darmadi fled Indonesia in 2014 but returned of his own accord last year, resulting in his arrest.