An Indonesian court yesterday rejected a petition by a major Indonesian pulp and paper company that challenged a government decision to void the firm's 10-year business plan.

Riau Andalan Pulp and Paper (Rapp), the operational unit of Singapore-based pulpwood firm Asia Pacific Resources International Limited (April), said that it would adjust the plan, which governs its daily operations, to meet Ministry of Environment and Forestry (MOEF) directives.

The dispute between Rapp and the MOEF involved differences over government efforts to speed up plantation companies moving off flammable peatlands. Rapp has large areas of peatlands within its Sumatra concessions.

The ministry had accused the company of failing to comply with new peatland protection laws, which aim to prevent annual haze and encourage plantation firms to move their operations to non-peatlands through land swop deals.

April said it protects large areas of peatlands, which are a major source of haze in the dry season, in its concessions. But it called on the ministry to agree to a more measured move off peatlands to avoid major business disruption and job losses.

The MOEF disagreed and wanted Rapp to revise its 10-year work plan, which all plantation firms must submit for ministerial approval. Failure to comply means a company must halt operations.

Rapp challenged the decision earlier this year to cancel the firm's business plan and sought the East Jakarta Administrative Court's help to mediate in the dispute.

Yesterday, a three-member panel of judges rejected its petition on procedural, not legal, grounds.

The firm responded: "Rapp intends to adjust the company's general working plan, as per directives from the Ministry of Environment and Forestry."

"The newly revised (plan) will significantly impact our business activities. Nevertheless, we will comply with the directives from the MOEF."

In the meantime, the firm's pulp mill can keep operating but no planting and harvesting on the concession areas covered by the work plan can be carried out, which will affect thousands of jobs.

Rapp also challenged the ministry's reliance on a law this year that decreed plantation firms must quickly switch to non-peatlands via land swops. The Supreme Court in October struck down the regulation, saying it was ambiguous and could cause legal uncertainty.

In its statement, the firm said: "We will continue to work to meet our commitment to conserve one hectare for every hectare planted (one-for-one goal), which currently stands at 83 per cent - or 419,000ha - of forest under conservation and restoration."

Its concessions under the work plan cover a large area of pulpwood trees in Riau province, directly across the Malacca Strait from Singapore. More than half the total concession area is peatland.

Dr Bambang Hendroyono, Secretary-General of MOEF, told The Straits Times that the ministry gave Rapp 14 working days from Dec 8 to revise its work plan.

"We have set a target to have all work plans... completed within this year. That is the ideal deadline," he said. "We are facing dry weather ahead and in 2018, we have Asian Games. We don't want to see anymore fire (and) haze then."

He said plantation firms, overall, did well in the recent prevention measures, adding: "Now only about 40 per cent of the total 85 plantation companies have completed their work plans.

"If the April group, which consists of more than 30 companies, completes its work plan, we will have 80 per cent of the 85 companies having completed their work plan."