Palm oil company PT Hindoli was recently fined $1 million for unauthorized land clearing in Indonesia. Mongabay.com reports that the Cargill subsidiary accidentally cleared about 2,000 hectares of land beyond approved boundaries in 2005, and planted palm on land designated as “forest” by the Ministry of Forestry. The court settlement was held up for several years due to overlapping claims and differing approaches for calculating damages.

Cargill’s decision to pay the fine sets an important precedent. This case could spark timber compensation payments by other palm oil companies that have also cleared land illegally. The state audit board estimates timber losses from illegal land clearing at over $36 billion in Indonesian Borneo alone.

Image Credit: Rainforest Action Network/Flickr