Saturday, 19 May 2012

Sandalwood and Environmental Law in East Timor

Original Citation: 2004 ETLJ 4

The island of Timor was famous centuries ago for its vast forests of sandalwood trees. Even before the colonization by the Portuguese, the existence of the sandalwood forests had been documented in 1436 by Chinese traders. In those documents, Timor was described as “a region of mountainous terrain covered in sandalwood trees and the country produces nothing else.”  The island of Timor was included in a map of the known world in 1529 while Java was not. The first Portuguese person who visited Timor, Duarte Barbosa, wrote in 1598 that “white sandalwood on the island is very abundant and the Moors in India and Persia attached a very high value to it with many benefiting from the sandalwood trees”.

During the Portuguese period, although other “commodities” such as honey, wax and slaves were also exported from the island, the focus of trade was sandalwood.

The influence of the sandalwood trade extended to the structure and development of the local political systems. The power of kings on the northern coast of Timor in the 16th century was a direct result of the sandalwood trade.

The Destruction of the Sandalwood Forests of East Timor during the Indonesian Occupation
In analyzing the ecological impacts of the Indonesian occupation of East Timor which began in 1975, Aditjonro  notes that the monopoly on the voracious exploitation of the sandalwood forests was controlled by a company, PT Denok, run by a relative of one of the leaders of the invasion, Sumampouw. In 1979, the principle shareholder of this company set up another company dedicated to the export of sandalwood; namely, PT Scent Indonesia and in one year of operation felled thousands of tons of sandalwood. This company, through the use of the Armed Forces of Indonesia, forced the East Timorese to log the sandalwood, without regard to the age of the trees, even tearing out the roots of the trees which contain the most concentrated aromatic. Criticism of this practice went unheeded in Jakarta and, in 1982, PT Scent Indonesia produced 240 tons of sandalwood timber and exported large amounts of sandalwood oil. This went on for at least another 8 years. The company invested Rp1.2 billion – the largest investment in East Timor – and employed 42 workers. In 1990, PT Scent Indonesia claimed to have produced 465 tons of sandalwood oil and powder worth Rp500 million. In the following 4 years, PT Scent Indonesia exported sandalwood oil from Jakarta in 50 kg drums with a value of US$150 per kilogram.

But the exploitation of sandalwood was not limited to oil and powder. In 1979, Sumampouw’s relatives established another company, PT Kerta Timorindo, which specialised in handicrafts and statuettes made from sandalwood and marble, employed 30 workers in its factory near the airport in Comoro, Dili, nearly all of whom were Javanese. The statuettes were mainly of Buddha, Jesus and Mary which were sold to Buddhists in East Asia and Catholics in Europe (principally, Italy) who thought they were helping the East Timorese by buying these products but who did not realise that they were assisting environmental destruction in East Timor and the oppression of the East Timorese people.

With this massive exploitation, the amount of sandalwood fell dramatically and none was replanted. In 1986, 328 tons of sandalwood timber, 300 kg of oil and 64.7 tons of powder were produced. Six years later, production fell to 118 tons of timber and 40 kgs of oil and no powder. Exports of sandalwood product fluctuated. In 1986, oil exports were 2.3 tons; in 1987, 5.6 tons and, in 1988, 6.3 tons. This fell to 1.8 tons in 1989 but climbed again to 3.8 tons in 1990. Exports of powder fell from 109.7 tons in 1986 to 40 tons in 1990.

These facts demonstrate an ecological scandal. The Indonesian government allowed the excessive exploitation of sandalwood in contravention of its own environmental laws.

According to one source, the Portuguese banned the exploitation of sandalwood in 1926 following its intensive exploitation for 300 years of its rule in East Timor. Unfortunately, the excessive exploitation of sandalwood showed that Indonesia was able to do in two decades what the Portuguese were not able to do in four centuries; that is, almost completely destroy the sandalwood forests of East Timor.

Regulation No. 2000/17 on the Prohibition of Logging Operations and the Export of Wood from East Timor
This regulation was one of the earliest legislative interventions by UNTAET. It came into force on 08 June 2000.

General Purpose
The general purpose of this regulation is to reduce deforestation in East Timor pending an inventory of the forests of East Timor and the establishment of a sustainable forestry industry . It did not purport to amend the applicable environmental law in East Timor derived from the Indonesian legal system  and expressly provides that any such law which provides greater protection than that contained in the Regulation remained in effect.

General Prohibitions
The regulation set out the following prohibitions:

(a) the cutting, removal and logging of wood from land in East Timor;
(b) the export from East Timor of wood in any form, including logs, planks, plywood or furniture, and
(c) the burning or any other destruction of forests.

These activities or attempts to perform these acts are offences.

Exemptions from the Prohibitions
But the Regulation  also provided certain exemptions to these prohibitions. Any person or legal entity who wished to conduct logging operations or export wood in any form for the limited purposes of use by the pharmaceutical industry, the cosmetics industry or “for such other purposes and upon such conditions as deemed essential by UNTAET for the economy of East Timor which were authorized by UNTAET Directive may apply to the UNTAET Agricultural Affairs Unit (now the Forestry Unit of the Department of Agriculture, Fisheries and Forests) for an exemption to the prohibitions".

The second exemption to the prohibitions, which did not require any application for exemption is in respect of logging operations for the purposes of producing wood for traditional farming and other domestic, traditional or cultural uses, the construction of traditional houses, and the construction of religious buildings in East Timor. But this second exemption applies only in respect of logging operations on land that is below 1500 metres elevation and which has a slope of less than 25 per cent.

The third exemption to the prohibition on the export of wood pertained to wood used locally to make handicrafts and exported by individuals as part of personal household effects or luggage.

The penalties for the offences of breaching the prohibitions or failing to comply with any exemption conditions are severe. In addition to any civil and criminal penalties provided for under the applicable law derived from the Indonesian legal system, a person is liable to:

(a) to a penalty not exceeding US $5,000, to be determined by the Head of the UNTAET Agricultural Affairs Unit; and
(b) to confiscation of the wood together with any tools, equipment and vehicles used for the purposes of logging operations or the transportation of wood subject to prohibition under this Regulation.

If the offence is committed by a legal entity other than a business registered under UNTAET Regulation No. 2000/4 (now UNTAET Regulation No 2002/04), then the following penalties, in addition to the civil and criminal penalties under the applicable law apply is a fine not exceeding US $500,000, to be determined by the Head of the UNTAET Agricultural Affairs Unit.

If the offence is committed by a business registered pursuant to UNTAET Regulation No. 2000/4 (now UNTAET Regulation No 2002/04) then the penalty, in addition to any civil and criminal penalty under the applicable law, is a fine not exceeding US $500,000, to be determined by the Head of the Agricultural Affairs Unit as well as the cancellation of the registration of that business and confiscation of the wood together with any tools, equipment and vehicles used for the purposes of logging operations or the transportation of wood.

If a legal entity which has obtained an exemption to the prohibition fails to fulfill the conditions attached to any such exemption, then the legal entity is also subject to cancellation of the exemption granted.

All financial penalties accrue to the East Timor Consolidated Budget, as provided for under UNTAET Regulation No. 2000/1.

Review of Administrative Decisions
The Regulation provides for administrative review of decisions made under the Regulation. A person or legal entity against whom a decision has been made may apply in writing to the Deputy Transitional Administrator  for a review of that decision within 30 days of the decision.

The Deputy Transitional Administrator was required, 30 days of the date of an application to either uphold or overturn the original decision, and to give written notification of the reasons for the decision to the person or legal entity. It also provides that, pending the establishment of adequate judicial procedures for administrative matters, a person or legal entity may challenge a decision of the Deputy Transitional Administrator to uphold the original decision adverse to their interests with the competent judicial authorities in East Timor which are obliged to apply the same substantive norms as would be applicable under the procedures for administrative matters.

The legal and illegal trade in sandalwood continues in East Timor to the present day. During the UNTAET period, it was still possible to buy statuettes of Jesus and Mary and fans carved from sandalwood. At the date of writing, such statuettes continue to be sold clandestinely on the streets of Dili. Vials of sandalwood oil may be purchased in the departure lounge at the Nicolau Lobato airport in Dili and fans said to be made from East Timorese sandalwood may be purchased from retailers in Dili. Twenty tonnes of sandalwood were reported to have been seized on 20 August 2002. In September 2002 in Dili, East Timorese police apprehended 7 lorries loaded with sandalwood which were believed to have originated from the District of Baucau. The timber was confiscated and handed over to the Ministry of Forestry and Agriculture. It was believed that the sandalwood was to be sold in  Indonesian West Timor and that more sandalwood was stockpiled in Baucau. On 27 February 2004, East Timor customs officials seized 3 tons of sandalwood timber from a container in Dili.

Stocks of sandalwood which had been logged during the Indonesian occupation remained and their value proved irresistible so, pursuant to section 3 of Regulation No 2000/17, provision was made for exemptions from the prohibition on the export of sandalwood.

UNTAET Directive No. 2002/3 on Certain Exemptions to Regulation 2000/17 (of 8 June 2000) on the Prohibition of the Export of Wood from East Timor

Purpose of the Directive
This Directive came into force on 20 March 2002 . It implements the exemption provisions contained in Section 3 of UNTAET Regulation No 2000/17. The preamble notes that the purpose of the Directive is to provide “a system for exempting from the application of UNTAET Regulation No. 2000/17, in a manner that protects the public interest of East Timor, the export of sandalwood logged prior to 8 June 2000, and for the realization of revenues therefrom”.

Under section 1 of this Directive, the Ministry of Agriculture and Fisheries of the East Timor Public Administration is empowered to grant an exemption to the application of UNTAET Regulation No. 2000/17 for the export of sandalwood that was logged prior to 8 June 2000. Applications for an exemption had to be lodged by 19 May 2002 but the Minister for Agriculture and Fisheries was also granted power to extend, at any time prior to 19 May 2002, the period within which applications for an exemption could be made by 30 days.

The Directive contains provisions for determining the age and value of sandalwood for the purposes of the exemption.  But these provisions confer a wide discretion on the Director of Forestry to determine the date upon which sandalwood the subject of an application for an exemption. Section 3.1 provides that “[t]he Director of Forestry shall determine the date on which the sandalwood subject to any Export Exemption Application was logged utilizing the most appropriate forestry industry methods practicable within East Timor as the same shall be prescribed by the Ministry of Agriculture in administrative instructions issued pursuant to the present Directive and updated from time-to-time.”

If the Director of Forestry determines, in accordance with the application of the methods described pursuant to Section 3.1 that the sandalwood was logged prior to 8 June 2000, the Director of Forestry “shall determine the market value of such sandalwood in the international market utilizing the most appropriate methods for determining such value as the same shall be prescribed by the Ministry of Agriculture in administrative instructions issued pursuant to the present Directive and updated from time-to-time”.

If the Director of Forestry determines that the sandalwood was logged on or after 8 June 2000, the application for the export of such sandalwood “shall be rejected and all such sandalwood seized by the Ministry of Agriculture and forfeit to the Public Administration.”

Seizure Provisions
If the sandalwood is seized, the Ministry of Agriculture must give notice in writing to the person from whom the sandalwood was seized stating the reasons for the seizure and providing an inventory of the seized sandalwood and the sandalwood must be stored in a warehouse or other repository designated by the Ministry of Agriculture. Samples may be taken for examination or analysis or in the conduct of judicial proceedings.

The seizure of sandalwood is an addition procedure for the implementation of the prohibition on logging and export and does not preclude, substitute for or intervene with respect to, the prosecution of any criminal proceeding or the imposition of any criminal sanctions appertaining to the cutting, removal, logging, ownership or possession of the sandalwood seized.

Review Procedures
The Directive provides for the review of the Director of Forestry’s decisions under Section 3 on the date of logging of the sandalwood in question or the value of such sandalwood. An initiation of a review of those decisions have to be made within 7 days of the Director’s decision.

The initial review of the Director’s decisions lies with the Minister for Agriculture. An applicant may submit to the Minister “any…documentary evidence, data, statements and such other information as may be relevant to (i) a date of the logging of the sandalwood, or (ii) a value of the sandalwood, different from that determined by the Director of Forestry. The Minister must deliver his decision on the application for review in writing to the person making such submission within seven calendar days of the date of the submission, which decision, together with all documentary evidence, data, statements and such other information provided by the person making the submission, shall constitute, and shall be retained as, the official record of the consideration of the submission.

Further review of the administrative decision-making process may be made, within a further 7 days to the Dili District Court.

In the review process, the burden of establishing (i) a date of the logging of the sandalwood, or (ii) a value of the sandalwood, different from that determined by the Director of Forestry in the application of the determination procedures set forth in Section 3 of the present Directive shall at all times be upon the person seeking the review, and the Public Administration shall in no event be liable for any claim, suit, demand or liability of any kind, including costs or expenses, arising out of or in any way associated with the seizure of, or the delay in export of, sandalwood.

Export Exemption Fee
If an exemption is granted or the decisions of the Director of Forestry or the Minister to reject an application for an exemption are overturned by the Court so that the sandalwood in question may be exported, then a fee for the export exemption, equal to thirty (30) per cent of the value of the sandalwood is be payable by the applicant for the Export Exemption Application and a certificate of exemption issued by the Director of Forestry, on behalf of the Ministry of Agriculture, authorizing the
export of the sandalwood subject to the Export Exemption Application.

Groeneveldt, W. P. Historical Notes on Indonesia and Malaya Compiled from Chinese Sources, Jakarta, Bhatara, 1960 (first published in Verhandelingen Van het Genootschap Van Kunsten en Wetenschappen, Batavia, 1839) cited at page 2 in Taylor, John G. Perang Tersembunyi Sejarah Timor Timur Yang Dilupakan, Forum Solidaritas Untuk Rakyat Timor Timur 1998 being a translation of Indonesia’s Forgotten War: The Hidden History of East Timor, 1999 Zed Books.

Aditjondro, George J. Menyongsong Matahari Terbit di Puncak Ramelau – Dampak Pendudukan Timor Lorosa’e dan Munculnya Gerakan Pro-Timor Lorosa’e di Indonesia, Jakarta, 2000, Yayasan Hak and Forum Solidaritas Untuk Rakyat Timor Timur pp. 46-50.

Timor Post 01 March 2004 "Customs Seize 3 Tons of Sandalwood", pages 1, 15.

ETAN East Timor Press Review 20 August 2002

ABC News Online September 2002

(c) Warren L. Wright
Dili, 30 March 2004

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