JAKARTA — Flooding disasters in Indonesia are increasingly traced not to natural causes, but to corporate destruction of peatlands, NGO Pantau Gambut warns in its newest report.

The report reveals how the construction of industrial-scale canals, not just haze, poses a growing threat.

Pantau Gambut says its new report builds on earlier findings that peat degradation drives floods.

That previous analysis warned that nearly half of Indonesia’s peatlands, about 6 million hectares (15 million acres), were classified as highly vulnerable to flooding due to unchecked land degradation.

The new report goes beyond diagnosis of flood risk to trace responsibility directly to corporate concessions and weak laws.

The report found that 281,253 kilometers (175,000 miles) of canals have cut through peatland ecosystems across Sumatra, Kalimantan and Papua.

The total canal length — equivalent to roughly 65 trips between Los Angeles to New York — is mostly found within oil palm concessions and industrial plantation forests, covering areas of nearly 4 million hectares (9.9 million acres) and 2.5 million hectares (6.2 million acres), respectively.

Draining peat via canals compromises its sponge-like function, causing subsidence and irreversible drying, according to Kitso Kusin, a peat researcher at the University of Palangka Raya in Central Kalimantan province.

Once peatland loses its permanent ability to retain water, there will be uncontrolled runoff that damages the surrounding environment.

Therefore, floods in degraded peatlands aren’t “natural” but a sign of hydrological collapse caused by drainage canals, deforestation and land conversion, the report argues.

The dried-out layer of peat that remains is also highly flammable, and it’s this one-two punch of subsidence and fire that’s historically been a key driver of peatland destruction across Indonesia.

“Once damaged, peat cannot revert to virgin condition,” Pantau Gambut GIS officer Juma Maulana said. “This creates a complex disaster cycle: fires in dry season, floods in rainy season.”

Corporate accountability

With the vast majority of canals being built in concessions to dry out peatland so that crops like oil palm can be cultivated there, floods are directly tied to concession regimes, not just ecological mismanagement, said Wahyu Perdana, advocacy and campaign manager at Pantau Gambut.

“There is a strong correlation between extractive corporate activities and the increased vulnerability to flooding and land and forest fires,” he said.

From 2015-22, more than 500,000 hectares (1.2 million acres) of peatland have also been converted to monoculture, further linking industrial concessions to degradation of peatland and increasing fire and flood risks.

In terms of fire, of the 3 million hectares (7.4 million acres) of peatland burned between 2015 and 2024, more than 1.2 million hectares (3 million acres or 40%) were within concession areas, according to Pantau Gambut’s analysis.

In terms of flood, Pantau Gambut found that 41% of palm oil concessions and 27% of pulpwood concessions that are on peatlands are classified as highly prone to flood.

In the report, Pantau Gambut identified 10 companies, oil palm and pulpwood each, whose peat degradation has significantly raised flood risks.

The analysis focused primarily on the severity of peat degradation, while also considering climate and topography.

Top offenders include Genting Group (PT Globalindo Agung Lestari), Pasifik Agro Sentosa (PT Jalin Vaneo), PT Kalimantan Agro Lestari for palm oil and Asia Pulp & Paper (APP)-linked PT Bumi Mekar Hijau, PT Bumi Andalas Permai and PT SBA Wood Industries for pulpwood.

These firms not only contribute to fires but also to worsening floods in priority peat hydrological units (KHG) like Sugihan-Lumpur in South Sumatra, where 427,759 hectares (1 million acres) of peat ecosystems are at risk of flooding, the report argues.

These groups supply palm oil and pulp to global markets, linking the floods directly to international supply chains.

Weak law

The report didn’t stop at looking at the environmental destruction caused by corporations. It also looked deeper into peatland protection laws, concluding that they’re deeply flawed as they serve corporate profit interests, rather than environmental protection.

For instance, peatland protection exists only at the level of government regulations, not at the law level.

This lower status means peatland protection is easily overridden by higher laws, such as the controversial omnibus law on job creation, which even legalized previously illicit oil palm practices and reduced sanctions from criminal to administrative.

“Criminal sanctions only ‘stick’ when tied to higher laws like the environmental law or forestry law,” said Pantau Gambut campaigner Abil Salsabila. “Thus, enforcement is limited to mitigation, not prevention.”

Besides the issue of weak regulations, there’s also an issue of loosened corporate responsibility, she said.

A 2017 ministerial regulation allows companies to avoid peatland restoration duties if their concessions are burned by shifting responsibility to the government.

Technical rules from the government also do not cover peat hydrological units outside forest zones.

Lastly, a peatland ecosystem is often deemed to be damaged only when it’s burned, but not when it’s drained.

This can be seen from the fact that carbon emissions in peatlands are calculated mainly from fires, ignoring emissions from deforestation, drainage and canalization, where degradation actually begins, Abil said.

“Peat degradation emissions begin long before fire — once trees are cleared and canals dug, emissions start. Yet official analyses only count fire emissions,” she said.

Therefore, the government must use drainage, deforestation and flood as indicators of damage on par with fires, Abil added.

“The state must treat floods as equally important when measuring peatland contribution to climate targets like FOLU Net Sink,” she said.

Furthermore, when peatlands are drained by canalization, companies should be immediately hit with sanctions, without having to wait for the peatlands to burn, Abil said.

No accountability

Pantau Gambut cited the example of pulpwood companies PT Bumi Andalas Permai (BAP), PT SBA Wood Industries and PT Bumi Mekar Hijau — all three of which were sued over forest and land fire haze in South Sumatra province.

Despite repeated court sessions, the South Sumatra District Court dismissed the lawsuit, leaving victims without legal remedy.

All three companies, located within the same Sungai Sugihan-Lumpur Peat Hydrological Unit, illustrate how peatland ecosystem damage caused by corporate activities often fails to receive full legal protection.

Pantau Gambut said unless peat protection laws are strengthened and corporations held accountable, millions will continue to face fires in the dry season and floods in the rainy season — a cycle of disaster with global climate consequences.

“Without preventive law enforcement [not only repressive measures after disasters], communities will continue to suffer,” Pantau Gambut said.

Banner image: An aerial view of the Barabai city in Hulu Sungai Tengah district, South Kalimantan province, Indonesia, during flood in 2021. Image courtesy of Muhammad Ramadhana/Wikimedia Commons. 

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