OJK Officially Published Green Taxonomy to Get Financing in Sustainable Principles

Doc. InfoSAWIT
OJK Officially Published Green Taxonomy to Get Financing in Sustainable Principles

InfoSAWIT, JAKARTA – Otoritas  Jasa  Keuangan  (OJK) officially published documents of Green Taxonomy as the way to accelerate financing program in sustainable principle in financial sectors. Many civil organizations did appreciate it for this is positive thing from the government and the same with what President Joko Widodo decided to revoke more than 2.000 licenses in plantation, forestry, mining, mineral, and coal in this country in January 2022 to stop illegal business in natural resources.

Executive Director of TuK INDONESIA, Edi Sutrisno said, what has happened showed material risks for banks which delivered funds to the sectors that are risky to forests, such as, palm oil and wood. Disobedience and illegal issues take place for a very long time.

“Without higher test and environmental protection, strong social, and governance, these banks may keep funding the risky sectors. Green Taxonomy of OJK can be directly tested to the companies whose their licenses are revoked,” Edy said, as in the official information to InfoSAWIT recently. 

From the companies whose the licenses are revoked, there are three subsidiaries of  Korindo that will have no massive areas, more than 65.000 hectares (ha) in forest use license. The companies are PT. Papua Agro Lestari (32.348 ha), PT. Tunas Sawa Erma (19.001 ha), and PT. Berkat Cipta Abadi II (14.435 ha). 

The companies do not develop most of the areas and are in vast primary rain forests status. The revoked licenses are equal to more than 40% of Korindo’s area concession in total. One thing for sure, this will impact to the groups’ asset values. But Bank Negara Indonesia (BNI) consistently reported Korindo as the top 10 clients in agriculture, and delivered loans about US$ 191 million in 2018.

“BNI should actually notice how their financing gets exposed to the companies that operate risky business. Now with the exposed assets, what the country decided, financial service institutions should respond it,” Edi said.

But the motivation behind the license revocation is not clear yet. It is unknown still if the revocation will help to recover land rights and end deforestation or if the land and conflict with people trigger deforestation. (T2)