JAKARTA, Indonesia (From The Straits Times) -- A major Indonesian pulp and paper firm, Riau Andalan Pulp and Paper (Rapp), has temporarily ceased operations in part of a concession in Riau province, as forestry authorities begin to review whether it built canals on peatland in the area illegally.

The case involves Rapp's concession in Pulau Padang in Riau, where green groups say the firm is developing fire-prone peatland in contravention of the company's own conservation policies and national laws. The firm is the operating arm of Singapore-based Asia Pacific Resources International Holdings, one of the world's largest pulp and paper companies.

The firm's directors were summoned to meet senior officials from the Environment and Forestry Ministry as well as the Peatland Restoration Agency (BRG) to clarify an incident last Monday, where its outsourced security guards had barred BRG officials from entering the concession in Pulau Padang, an island about 11/2 times the size of Singapore.

The "unannounced inspection" led by BRG chief Nazir Foead was a follow-up to villagers' complaints in June that the firm had built drainage canals, which serve to lower the water table in peat areas to make conditions conducive to growing acacia trees used to produce pulp.

Mr Nazir told reporters Rapp had been given a "stern verbal warning" over the denial of entry, while Environment and Forestry Ministry secretary-general Bambang Hendroyono said a review was under way to check if the firm had indeed built canals to open up peatland. The review is "expected to last three months at the latest", Mr Bambang said.

Officials also say the firm had agreed to work with BRG to restore damaged peatland outside the concession but within the Pulau Padang landscape, and allow the government to resolve social conflicts with surrounding villages.

Rapp president director Tony Wenas apologised to BRG over Monday's incident, saying it was "an internal standard operating procedure error". The security guards had failed to report to their superiors about the visit, he said. "We have acted firmly and reviewed the SOP so it won't happen again," he told reporters.

When asked about the allegation of drainage canals on the concession, Mr Wenas said that "there's opening of firebreaks and reservoirs as part of prevention of land and forest fires".

Separately, Mr Nazir told The Straits Times that BRG and the Environment and Forestry Ministry will be setting up a team of experts to collect "physical data about the canal map work and depth of peat".

Until then, BRG would stick to its earlier findings that there was "opening of canals", which it said was against government regulations that strictly prohibit the construction of canals, which could result in peatland becoming dry and vulnerable to fires. Peatland with a depth of at least 3m must be protected, according to the law. Burning peatland produces thick, acrid smoke.

"We saw only one canal, so now we need to see the whole area," he said. "So far, we have listened to them... that the canals function as reservoirs but we need to find out for ourselves."

Eyes on the Forest, a coalition of Indonesian non-governmental organisations, said late last week that satellite images showed Rapp has continued to drain Pulau Padang's peatland, despite the Environment and Forestry Ministry's instruction to stop land clearing on peatland for forestry and plantation business, even in areas already licensed.