[Kabar-indonesia] 1 of 2: Tempo Cover Story: Fallen in the Forests [3 reports]

[JoyoNews at aol.com]

3 Tempo Magazine Cover Story Reports (1 of 2): 

- Fallen in the Forests 

- A Speck in The Jungle 

- Logging Destruction 

Tempo Magazine   
No. 03/VII
Sept 19-25, 2006 

Cover Story 

Fallen in the Forests 

Arrested in Beijing, timber businessman Adelin Lis is charged with causing 
the 
state to lose Rp227 trillion (US$24.7 Billion) -- fom illegal logging, unpaid 
taxes and untold ecological damage. Fifty other such businessmen are being 
hunted down by the police. Tempo's report: 

HE is known as the 'King of Sumatra Timber.' He looks regal indeed-even when 
he was brought back to Medan as a detainee, on Saturday two weeks ago. One 
brigadier-general-Johny Wainal, Deputy Chief of North Sumatra Police-and 30 of 
his subordinates came to pick him up at Polonia Airport. The tightly guarded 
police convoy escorted him out of the airport, crossing the town to the building 
housing the North Sumatra Regional Police Directorate General of Criminal 
Investigation. 

There, the 'King,' Adelin Lis, 49, was put in a cell on the ground floor. 
Inside the 16-square-meter cell, his influence could still be felt. Usually 
occupied by five prisoners, the cell is now occupied by Adelin alone. Five fully 
armed members of the Mobile Brigade stood guard outside the three-layered door 
leading to the cell. 

Adelin was a fugitive from the North Sumatra Police when he was arrested in 
Beijing, while applying for a new passport at the Indonesian embassy. On the 
way to a clinic to have his heart checked, four of his unarmed escort were 
attacked and beaten up, allowing Adelin to escape. The pursuit that followed led 
them to the Sheraton Hotel grounds. Eventually, however, Adelin, who was on 
Indonesia's Top Most-Wanted list, was recaptured. 

He was flown back to Jakarta escorted by the embassy Consul Yan Maringka, and 
on to Medan. Adelin's capture could strike fear in the hearts of big-time 
illegal loggers. Some of them are moving freely in Indonesia. Some fled abroad, 
to Hong Kong, China, Malaysia, and Singapore. 

Forestry Minister M.S. Kaban holds a list of dozens of names-whose stature is 
even higher than Adelin. "Adelin at least had the concession rights (HPH). 
But these people didn't have the HPH, yet they are felling trees everywhere," 
said Kaban. "They should be the ones to be arrested." 

                                                           | | |

Adelin Lis was not the Minister's target. According to Kaban, today there are 
approximately 50 people who should be arrested by the police. They operate in 
Papua, Kalimantan, Sulawesi, and Sumatra. The list was submitted to the 
National Police Chief, General Sutanto and Attorney General Abdul Rahman Saleh a 
year ago. However, so far, not one name on the list has been arrested by the 
police. 

Among the names is, Ting Ting Hong, who operates in Papua, Palembang, Riau, 
and Kalimantan. Then there is Abi Besok, who illegally felled trees and 
smuggled them to Malaysia from Riau. Next is William Hendrik, timber businessman from 
Papua who deals with investors from India and China. 

According to Kaban, these businesspeople live in Hong Kong, Singapore or 
Malaysia. They frequently come in and out of Indonesia. Hence the Minister's 
recommendation that they be quickly detained. 

The area covered by the big guns ranges from Sumatra, Kalimantan, to Papua. 
According to Kaban's calculations, they steal from areas totaling 2.8 million 
hectares. "The annual losses incurred by the state as a result are 
approximately Rp45 trillion," he told Tempo. 

These jointly logged forests are not as comparable to Adelin Lis' 16,000 
hectares of operation in Batang Gadis National Park in Mandailing Natal regency, 
North Sumatra province. By Tempo's calculations, Adelin owes the state some 
Rp4.3 trillion. 

Where did the Rp227.02 trillion figure released by the Environment Department 
come from? "We calculated it based on the ecological and biodiversity 
aspects," said Dasru Chaniago, head of environment investigation at the Environment 
Department. The details, according to Dasru, include losses due to timber 
theft, ecological losses, and the rehabilitation costs of damaged environment. 

If the above calculations are used, the figures would be spectacular-nearly 
five times the Forestry Minister's version. Compare it to the 2005 State Budget 
of Rp377 trillion. Such a model is indeed regulated in the Law on Environment 
Management. If that was the figure used, then this is the "most expensive" 
illegal logging activity in Indonesia. 

Adelin's case began when local communities reported his activities to the 
North Sumatra Police in 2005. There was an investigation, but no results for some 
time. 

In January 2006, a team from the National Police Headquarters went to the 
Batang Gadis National Park. Two weeks later, the North Sumatra Regional Police 
announced that the three companies owned by the Adelin family were suspected of 
carrying out illegal logging activities. They are PT Mujur Timber, PT Keang 
Nam Development Indonesia and PT Inanta Timber Trading. 

Adelin, director and commissioner in the three companies, was declared a 
suspect. So was Adenan Lis, Adelin's older brother, and Lee Suk Man, a Korean 
citizen who was Keang Nam's field manager. On February 22, 2006, Adelin Lis was 
officially declared a fugitive. 

Head of the North Sumatra Regional Police, Inspector-General Bambang Hendarso 
Danuri, then asked the Environment Department to calculate state losses 
caused by Adelin and his companies. "It's a team of experts from the Environment 
Department who determines the value of the losses," said Bambang Hendarso. The 
Finance Development Controller (BPKP) has its own figure: approximately Rp674 
billion. 

The Batang Gadis National Park is said to be the richest tropical forest in 
Sumatra. According to the Keanekaragaman Hayati (Kehati) Foundation, the 
natural characteristics of the National Park represent the natural riches of 
Sumatra's highland and coastal areas. In the forests covering an area of 108,000 
hectares can be found a variety of flora and fauna native to Sumatra, such as 
tapirs and elephants. 

Adelin's arrest shocked the people of North Sumatra, especially those in 
Sibolga. In the capital of Central Tapanuli regency, the Lis family members are 
prominent citizens. Their businesses are diverse, from hotels to various 
businesses in the forestry sector. 

The business was founded by Acik Lis alias Ling Huang Sen, Adelin's father, 
in 1952. He founded PT Mujur Timber and purchased the forestry concessions in 
Rantau Prapat, Bagan Siapiapi and Barumun. 

In the 1970s, the rights expired. For­tunately Mujur­ Timber then bought 
forestry con­cessions in Central Tapanuli, today called Mandailing Natal regency. 
In 1978, the family established a timber processing plant, PT Mujur Timber. 
Adelin was appointed as one of the directors. Together with his siblings, he was 
successful in developing his father's legacy to a giant business in North 
Sumatra. 

In 2005, the people reported illegal logging activity in Batang Gadis. The 
National Police team managed to find evidence of illegal logging by Keang Nam 
and Inanta in the protected forest area. The police also discovered evidence 
that Mujur Timber fenced the stolen timber. According to the Regional Police 
Chief, there were also illegal logging activity outside the areas controlled by 
the Lis family-the products were processed at the holding company. From here, 
the products were "flown" overseas. 

Ever since Adelin and Adenan were declared suspects and fugitives, the three 
companies practically stopped their operations. "Everything was confiscated by 
the police. The plants, the tugs, and timber supplies stopped," said Sakti 
Hasibuan, the family's lawyer. 

The charges against the Lis brothers have expanded because on the land 
previously worked by PT Keang Nam and Inanta, there was no reforestation as required 
by Forestry Minister's regulations. In fact, the land was transformed into a 
palm oil plantation. 

According to Bambang Hendarso, the illegal logging network using total 
felling has a simple modus operandi, namely manipulating the clarification letter on 
the legality of forest products (SKSHH). "The two companies received blank 
forms from the Forestry Office in Mandailing Natal," Bambang told Tempo, last 
week. 

With the blank forms, they were able to "legalize" illegally felled timber 
received from several other companies and individual illegal loggers. And they 
were successfully exported. Several people who helped with the Lis family's 
illegal logging activities have been sentenced. 

Among them are Nirwan Rangkuti, an employee at the Forestry Office in 
Mandailing Natal, and Susilo Setiawan, Keang Nam Manager. Jonis Purba, Keang Nam's 
tugboat skipper, was released. Four other suspects are still being tried. Among 
them is head of the Forestry Office in Mandailing Natal, Budi Ismoyo. He is 
charged with corruption and damaging the environment. 

Adelin, according to Bambang, will be charged with breaking several laws, 
ranging from illegal logging, environmental destruction, money laundering, to 
corruption. "His corruption dossier will be a separate one," he said. With these 
charges, it will be difficult for Adelin to escape. 

In the eye of the Forestry Minister M.S. Kaban, the state losses charged 
against Adelin were truly shocking. "I'm surprised," he told Tempo. "The police 
must explain where they came up with the fantastic figures," he added. 

According to Kaban, Inanta Timber and Keang Nam had the license to operate in 
the forests. "So far we haven't found any violations by the two companies," 
claimed Kaban, "including suspicions of not paying the reforestation funds 
through the Forestry Department." 

Kaban denied he was defending Adelin. He only asked the police not to apply 
discrimination in pursuing illegal loggers. "Forest concession owners were 
arrested, but no action is being taken against those who don't have concessions," 
said Kaban. 

Adelin himself denies the charges. "I did not log illegally. Everything is 
legal," Adelin said, as relayed by Sakti Hasibuan to Tempo. 

There is still a long way to go because the debate will continue in court. 
And it will be even longer when the police start nabbing the other 50 illegal 
loggers named in Minister Kaban's list. 

-- Arif A.K., Maria Hasugian, Sahat Simatupang, Hambali Batubara (Medan) 

sidebar: The Losses 

Rp227.02 trillion (US$24.7 Billion)
Environment Department 
(based on economic, ecological, and environment rehabilitation fees) 
* PT Inanta Timber: Rp225 trillion 
* PT Keang Nam: Rp2.02 trillion 

Rp674 billion 
Finance Development Controller (BPKP) 
PT Inanta Timber 
* Has not paid forest resource provisions (PSDH) (2000-2005): Rp256 billion 
* Has not paid reforestation funds (DR): US$2 million (approx. Rp18 billion) 
  
PT Keang Nam 
* Has not paid PSDH: Rp309 billion 
* Has not paid DR: US$2.9 million (approx. Rp26 billion) 
  
Rp4.3 trillion 
Calculations by Tempo 
Based on the value of the timber stolen from the protected forest area 
covering 16,000 hectares with the following assumptions: 
* Timber production 50 cubic meters per hectare. 
* Range price of US$500 (Rp4.5 million) per cubic meter. Total value of 
timber 
  theft, Rp3.6 trillion. 
* Total PSDH and DR in arrears (2000-2005), Rp674 billion 
 
---------------------------------------

Tempo Magazine   
No. 03/VII
Sept 19-25, 2006 

Cover Story 

A Speck in The Jungle 

ILLEGAL loggers in the Papua forest sell blocks of Merbau timber for 
Rp25,000. 
The same piece of wood costs 100 times that in China. So, who pockets the 
profit? Police are currently trying to trace the illegal logging proceeds of 
timber tycoon Adelin Lis. 

Every year, loggers smuggle out 300,000 cubic meters of Merbau timber, worth 
Rp1.98 trillion. Yet, this is only two-thirds of the amount smuggled by timber 
tycoon Adelin Lis from the Batang Gadis National Park in North Sumatra. 

Arrested in Beijing two weeks ago, Lis has been charged with causing the loss 
of Rp4.3 trillion to the state. Ironically, Adelin Lis is just a speck in the 
jungle of illegal loggers in Indonesia. 

Every year, illegal loggers cut down trees valued at Rp45 trillion in an area 
five times the size of Bali Island. According to Forestry Minister M.S. 
Kaban, there are 50 major illegal logging tycoons operating in Indonesia. 

Names submitted by M.S. Kaban as illegal loggers: 

The Laundering Money Machine 

Illegal loggers sell blocks of Merbau timber for Rp25,000 to cover their 
daily expenses. The same piece of timber sells for 100 times that price in China. 
Adelin Lis and other illegal loggers launder their trillions before they can 
spend it legally. 

This is why illegal logging is listed as a serious crime in the Criminal Law 
Money Laundering Regulations, on the same level as drug abuse. According to 
Yunus Husein, head of the Financial Transaction Report & Analysis Center, the 
Lis family is involved in money laundering. 

The Money Machines 

Legal 

Source of timber: Inanta Timber Company (HPH permit covering 41,000 hectares) 
Keang Nam Company (HPH covering 59,000 hectares). 
Processor: Mujur Timber Company. 

Illegal 

Source of Timber: Batang Gadis National Park in North Sumatra. 
Area: 16,000 hectares. 
Destinations: China, Malaysia, Europe, Telur Island. 
Temporary storage for illegal timber located in the middle of the Indian 
Ocean, 12 hours from Mandailing Natal Beach. 

Aceh 
Acan (Janes Tan) 
Status: illegal logger and supplier of illegal timber from Mt. Leuser 
National Park in Langkat. 
Other locations of operation: North Sumatra. 

North Sumatra 

Aseng 
Status: Illegal logger 

Aweng 
Status: involved in timber smuggling in Tanjung Balai, Asahan. 

Riau 

Abi Besok 
Status: owner of illegal timber processing factories, supplier of illegal 
timber and smuggler of illegal timber to Malaysia. 

Ali Jambi 
Status: illegal logger and smuggler of Ramin timber. 

Jambi 
Aleng and Akiong 
Status: suppliers of illegal timber. 

Jakarta 

Eddy S. 
Status: sells fake licenses to sell natural products 

South Sumatra 

Haji Salim 
Status: supplies and smuggles illegal timber. 

Surabaya 

Sundono 
Status: illegal timber buyer. 

West Kalimantan 

Ng Tung Peng 
Status: illegal logger 
Location of operations: the protected forest of Martinus. Owns 15 sawmills 
in Lanjak Banjau. 

Tian Hartono 
Status: illegal logger 
Suspected of owning a timber processing factory linked to PT Rimba Ramin and 
PT Hasil Rimba. 

Central Kalimantan 

Abdul Rasyid 
Status: involved in illegal logging activities in the Tanjung Puting National 
Park. 

Asoy (Ansui) 
Status: Funds timber smuggling to Malaysia. 

East Kalimantan 
Chris Chandra 
Status: Funds illegal logging in Tarakan. 

Syamsudin 
Status: illegal logger and smuggles timber to Tawao. 

Ubah, Sukarman, and Baso Ali 
Status: illegal loggers in Manumbar. 

Akiat, Tukiran, Amin, Ali, Edo 
Status: Illegal loggers in Pangdan, Sangkulirang. 

Memeng and Arif 
Status: illegal loggers in Batu Lepok Perondongan and Pelawan. Suspected of 
owning several illegal sawmills. 

Ramli Ompong 
[Tarakan] 
Status: Funds illegal logging in Tarakan. 

Papua 
Ting Ting Hong 
Status: illegal logger. 
Other locations of operation: Palembang, Riau and Kalimantan 

Yongkie [Papua] 
Status: involved in timber smuggling from Papua. 
Headquarters: Surabaya 

Wiliam Hendrik 
[Sorong] 
Status: linked to the MV Braveli Falcon illegal logging case. 
Suspected of cooperating with illegal dealers from India and China. 

Europe 

KAHRS, the third-largest wood floor distributor in the world, admitted to 
Telepak and the EIA that it could not guarantee that its supply of Merbau timber 
came from legal suppliers. 

JUNCKERS, the fourth-largest wood floor distributor in the world, located in 
Denmark, admitted that 80-90 percent of its raw material was purchased from 
Indonesia-from unknown sources. 

AMSTRONG/BRUCE, the largest wood floor distributor in the world, admitted 
that the Merbau timber it acquired came from Papua. Armstrong/Bruce's supplier 
could not prove the legality of the timber. 

NORTH AMERICA 

GOODFELLOW. The Telapak non-government organization and the Environmental 
Investigation Agency (EIA) discovered that Goodfellow, the largest distributor of 
wood floors in Canada, had been using Merbau timber without checking the 
legality of its distributor, the Seng Fong Company, which buys the timber from an 
illicit agent in Papua. 

MONEY LAUNDERING 

DEPOSITS 

The laundered money is deposited into bank accounts and is integrated into 
the finance system. 

Bank Mandiri 

Account I 
Debit Rp28.3 billion 
Credit Rp8.3 billion 

Account II 
Credit Capital Rp2.5 billion 

Lippo Bank 

Debit US$21,034 (Rp189.3 million) 
Credit US$14,296 (Rp128.7 million) 

Foreign Banks [no data available) 

The illegal logging proceeds are deposited in foreign bank accounts. 
Indonesian Police are cooperating with the Chinese Police Department to track down the 
illegal cash. 

OBSCURING 
The money is transferred to other private or company accounts or used to 
purchase other currencies to obscure the money source. 

* Adenan Lis [status: fugitive] 
* Lee Suk Man [Manager of Inanta Company, South Korean, status: fugitive) 
* Susilo Setiawan [manager of Inanta Company, status: in police custody] 
  Money is transferred to hundreds of other private and company accounts 
  both inside and outside Indonesia. 

INTEGRATING 

The laundered money is used to purchase assets or invest in legal companies. 

Police are aware that Adelin Lis owns many companies, but they have been 
unable to determine where the laundered money is channeled. 

The Lis Family Business Empire 

AAdelin Lis was born in Medan, the fourth of eight siblings. Adelin embarked 
on his business career when his father, Ling Huang Sen, appointed him director 
in the Mujur Timber Company, one of the family's timber companies founded in 
1978. Since 1980, Adelin and the Lis family empire has expanded into 
plantations, hotels, and fisheries. 

Timber 

The Mujur Timber Company employs approximately 5,000 workers. 

Branches: 

Inanta Timber Company, HPH license over 41,000 hectares. 
Keang Nam Comppany, HPH license over 59,000 hectares 

Palm Oil Plantations 

Gruti Lestari Perkasa Company (North Sumatra) 
Rimba Mujur Company (North Sumatra) 

Fisheries 

PT PAS (Sibolga, North Sumatra) 
Cold Storage (Belawan, North Sumatra) 

Properties 

Nauli Bisnis Center (Sibolga, North Sumatra) 

Hotels 

Wisata Indah Hotel (Sibolga, North Sumatra) 
Emerald Garden Hotel (Medan, North Sumatra) 
Hollywood Pandan (Kalangan, North Sumatra) 
Poncan Gadang Hotel (Mursala Island) 
Villa (Mursala Island) 

Golf Courses 

Mujur Golf Course (Kalangan, North Sumatra) 
Emerald Golf Course (Jakarta) 

Sources: Telapak/EIA, Greenpeace, Tempo research and investigation team. 

-- Bagja Hidayat, Poernomo G. Ridho, Hambali Batubara (Medan), 
Yosep Suprayogi 
 
-------------------------------------
 
Tempo Magazine   
No. 03/VII
Sept 19-25, 2006 

Cover Story 

Logging Destruction 

Adelin is accused of destroying forests by using locals 
for logging in 16,000 hectares of National Park. 

IT has been years since the giant flickering letters "Mujur Timber" 
symbolized the prosperity of Sibolga, North Sumatra. Mujur Timber Company & Co, the 
plywood factory is located on Jalan Sibolga-Barus, Pargadungan village in Tapian 
Nauli. 

Last February, the factory belonging to Adelin Lis and family, was closed 
down by the police. Lis, an illegal logging suspect was arrested in Beijing two 
weeks ago. 

The 15-hectare factory is now abandoned. "There's no activity," said Aminudin 
Harahap, a member of the Sibolga community. There is not a soul at the 
employee dormitory not far from the factory. About 1,900 employees have stopped 
working. 

The situation today is very different. The factory, built in 1978 was always 
active in processing wood products. The raw materials came from several areas, 
especially from the licensed lumber area (HPH) or concession areas belonging 
to the Lis family in Mandailing Natal, 200 kilometers from the factory. 
However, according to police, the factory also processed illegal timber from areas 
outside the licensed area. 

The illegal timber was sent to the factory via two routes; land and water. 
According to the Director of the North Sumatra chapter of the Indonesian Forum 
for the Environment (Walhi), Job Rahmat Purba, the land route passes through 
Sale Baru village. This village was established by Keang Nam company, a branch 
of Mujur Timber, and was settled with residents from other areas. The migrants 
were employed by Keang Nam and Inanta companies to log the forest. "This way, 
it would look as if the locals were doing the logging," said Purba. The 
illegal lumber was then gathered at Telur Island in Natal, Madina, 12 kilometers 
from Natal Beach. 

On the water route, the lumber was floated down the Batang Natal River. It 
was then piled up at the Tabuyung estuary in Batang Natal. After that, large 
barges pulled the timber to a factory in Sibolga. At this factory, both the legal 
and illegal timber were processed together. The product was then exported to 
various countries including Malaysia, China and several European countries. 

Actually, Adelin Lis already owns vast legal logging areas. PT Keang Nam 
Development Indonesia owns 58.7 hectares of legal logging area, while PT Inanta 
Timber has 40.6 hectares and PT Gunung Raya Timber boasts 100,000 hectares. 

Apart from the above three companies, the Lis family owns other legal logging 
companies in Madina, South Tapanuli and North Tapanuli including PT Mutiara 
Warna, which owns almost 70 hectares, PT Panel Loka Sejahtera, PT Panei Mitra 
Makmur and PT Teluk Nauli. 

The Environment Department and the North Sumatra Police investigations 
concluded that despite owning vast legal logging areas, both PT Keang Nam and PT 
Inanta carried out illegal logging in the Batang Gadis National Park, the 
Mandailing Natal district and Central Tapanuli. 

According to Dasru Cha­niago, head of investigations at the Environment 
Department, the two companies' illegal logging activities covered 16,000 hectares 
out of 108,000 hectares of protected forest area, incurring losses of Rp223 
trillion to the nation. According to Walhi, the total illegal logging activity 
spanning over the other three districts covers 50,000 to 100,000 hectares. 

But Adelin Lis' lawyer, Sakti Hasibuan, denies his client's illegal logging 
charges. Hasibuan claims that it is difficult to determine the precise borders 
of concession areas, particularly for those who cut the trees. 

In the meantime, the illegally logged forest areas have been left bare. 
Former North Sumatra Walhi Director, Efendi Panjaitan, claims that the areas 
surrounding Batahan village, Napal and Mandailing Natal are now devoid of trees. 
Only shrubs remain. 

Some of the illegally logged forests have since been converted into palm oil 
plantations, although environmental regulations stipulate that logging areas 
must be replanted with the original vegetation. 

-- Ramidi, Hambali Batubara, Maria Hasugian 
 
-End 1 of 2 -

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Joyo Indonesia News Service
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