Land Conflicts Complicate Effort to Spare Forests From Palm Oil in Borneo

0117-warning-dilarangA new investigation by environmental groups shows that palm oil producers misled local farmers resulting in disputed community land contract agreements between the two groups. Read more below to find out the surprising way that the palm oil companies and the Indonesian government are addressing these grievances.

A widely-heralded effort to spare carbon-dense rainforests and peatlands from palm oil development in Indonesian Borneo is facing new criticism after an investigation by rights groups found evidence of unresolved conflicts over community land. 

The report, published Friday by the Forest Peoples Program and TUK-Indonesia, looked at a carbon conservation pilot project run by Golden Agri Resources (GAR), a Singapore-based agribusiness giant that is one of Indonesia’s largest palm oil producers. GAR owns PT Kartika Prima Cipta (PT KPC), a palm oil company that operates in West Kalimantan’s Kapuas Hulu district. 

KPC’s concession has been controversial since it began operations in 2007, because it acquired a permit to convert land used traditionally by small farmers, according to the report. As is often the case in Indonesia, community members saw little compensation, had limited recourse to reject the project, and had poor understanding of the contracts they ultimately signed. 

Nugatory compensation was paid to community members while getting them to permanently surrender their lands, through an unclear process which gave them the false impression that they could get their lands back after 30 years,” states the report. “Not a single one of the hundreds of farmers who unwittingly sold their lands to PT KPC has a copy of the contract.”

While the scenario is strikingly common in Indonesia, the difference with the KPC concession is that the situation wasn’t immediately rectified once GAR signed its breakthrough forest conservation policy. The policy, signed in 2011 after a damaging campaign by environmental groups, commits GAR to protect high carbon stock forests and high conservation value areas, while seeking free, prior informed consent from local communities before developing new plantations. 

In fact, argues the report, the GAR’s forest conservation policy may have made the situation worse by exacerbating conflict within communities and effectively sanctioning the shift of lands traditionally managed by communities over to company ownership. The net result is the proposed conservation set asides “are deeply unpopular both with those communities refusing the company’s presence and with those that have pinned their hopes on oil palm,” according to the report. 

Marcus Colchester, Senior Policy Advisor at the Forest Peoples Program and lead author of the report, explained that the forest conservation policy — as it currently stands — will limit the ability of communities to continue their traditional livelihoods. 

The imposed land use classification of the high conservation stock (HCS) approach itself ignores both customary rights and traditional systems of forest management. So rather than build on what is there, the HCS system seeks to get the communities to surrender their forests and forest-fallows and pass them to company control, thus further restricting the communities’ livelihood base and customary forest management regimes,” Colchester told 

That is why even the communities in the concession that have effectively refused oil palm are also refusing the HCS and HCV systems and this is why we recommend that these communities lands are excised from the concession and, in discussion with the government, the land rights of these communities are affirmed and secured.” 

However, GAR now appears to be taking the criticism to heart, in recent months initiating a conflict-resolution process and a system for airing and addressing grievances. There are also other signs of progress, according to the report. 

The company has openly committed itself to making improvements and has shown goodwill at international, national and local levels,” the report states. “It has shown it is open to dialogue and taking advice, even from its critics.” 

Where the communities have strongly resisted the take-over of their lands, the company has not taken lands by force and it has now made a verbal commitment to stop seeking to get these communities to surrender their lands. The company has also stopped clearing forests and peatlands and HCV areas.” 

While the report welcomes these developments, it says the case nonetheless offers useful lessons for companies similar forest conservation policies. For example, Asia Pulp & Paper (APP), an Indonesian forestry giant, and Wilmar, the world’s largest palm oil producer and trader, recently made parallel commitments. 

The lessons learned from GAR’s mistakes need to be carefully heeded by other companies seeking to apply the same approach,” said Colchester. “They must start by respecting communities’ land rights, securing their livelihoods and making clear from the start which areas they plan to take over for both plantations and conservation. They also have to be transparent about the terms of land deals. Only then can communities make sensible decisions about whether or not to allow these operations on their lands.” 

Anton Widjaya, Director of Friends of the Earth affiliate WALHI-West Kalimantan, added that recognition of community rights should underpin all land deals, whether they involve conservation, conversion, or extraction. 

These kinds of projects are only going to work once local and national governments first recognize peoples’ rights and companies understand that they are there as guests of the local communities rather than as feudal landlords,” said Widjaya in a statement. “This is what it means when we say that all such operations require communities’ free, prior and informed consent.” 

While such a notion may seem far-fetched given historical trends in Indonesia, where large swathes of land have been seized from local communities and handed over to plantation, logging, and mining companies, there are signs that business-as-usual approaches to land management may be poised to change. For example in May 2013 Indonesia’s Constitutional Court ruled that customary forests should not be classified as “State Forest Areas”, potentially giving indigenous and local communities the right to manage their customary forests across tens of millions of hectares of land. AMAN, Indonesia’s largest indigenous peoples’ group, has since filed a petition asking the Indonesian government to immediately implement the ruling. Some are taking their own steps to enforce the decision, posting signs in indigenous territories reading: “Customary forests are no longer State forests. Indigenous Peoples are implementing the Constitutional Court’s Decision No. 35/PUU-X/2012″ 

The Constitutional Court decision is significant because Indonesia’s central government has control over the country’s vast forest estate, effectively enabling agencies like the Ministry of Forestry to grant large concessions to companies for logging and plantations even if the area has been managed for generations by local people. In practice that meant ago-forestry plots, community gardens, and small-holder selective logging concessions could be bulldozed for industrial logging, pulp and paper production, and oil palm plantations. In many cases, industrial conversion sparked violent opposition from local communities, which often saw few, if any, benefits from the land seizures. 

Indonesia has one of the highest rates of forest loss in the world. Industrial activities — notably logging, conversion for timber and oil palm plantations, and mining — are a major driver of deforestation, especially in Indonesian Borneo (Kalimantan), Sumatra, and Indonesian New Guinea (Papua and West Papua). However forest recovery has been observed some areas where communities have been granted land tenure. For example, the island of Java — where community forests are rapidly expanding — now has more forest than it had a decade ago. 

CITATION: Marcus Colchester, Norman Jiwan and Emilola Kleden. Independent Review of the Social Impacts of Golden Agri Resources’ Forest Conservation Policy in Kapuas Hulu District, West Kalimantan. Forest Peoples Programme and Transformasi Untuk Keadilan. January 2014


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