Forestry & Plantation
The forestry industry, specifically logging, has reached its peak, and corroborated by concerns of environmentalists that the rainforests of Indonesia are approaching the danger of extinction. As a result, other large scale forestry industry actors, mostly pulp and paper ones, the Government and other market operators have been trying to replace the gap left by logging by developing industrial forests. However there is still concern since the land areas reserved for industrial forests in a number of cases are in conflict with mining concessions, palm oil and other plantations, transmigration projects, and areas reserved for residential purposes. Another important concern also results from past practices where land areas were assigned to the industrial forest operators from natural forest areas or old natural forest areas that had been logged by logging companies and urged to be replanted for conservation purposes.
The facts that palm industry contributes a significant number of taxable income for the Government and support millions of people’s life do not stop environmentalist from questioning the sustainability of the industry from a conservation perspective that requires the biodiversity of Indonesian nature environment to be maintained. There is an issue where the areas granted to palm oil businesses belonged to logging companies, which would not be in line with guidelines that these logged areas should be restored to its diverse natural habitat, and not used for mono-cultures such as palm plantations. Another serious issue is forest fire arising from bad practices of forest clearing by irresponsible concession holders, which destroy the environment, while the smoke impacts the health of the people in surrounding areas, including Indonesia’s neighboring countries, as well as affecting flight safety.
As a result, the government, the international community and organizations, environmentalists, the industry, and financial institutions have come up with plans to regulate the industry by imposing very strict compliance rules on how to do sustainable operations. Many operating procedures, systems and requirements are standardized and applied, including international and domestic ones, and those who breach it will have to deal with refusal directly not only from the market and consumers, but also tree criminal charges.
Legal services in these areas have therefore changed drastically to reflect the new policies. Strict compliance, legal due diligence, legal opinions, negotiations and contract drafting are changed to be very specific such that only lawyers with in-depth knowledge of the industry understand and are capable in providing appropriate services. LGS with its decades of experience in this industry provides a high level of confidence to clients (government, industry, and lenders) in dealing with all legal issues, transactional or litigation, in this delicate industry.