In the last decade, palm oil production has dominated the international vegetable oils market. The trend of palm oil expansion will continue and is predicted to triple by 2050. Indonesia and Malaysia are the main suppliers of global palm oil market with 85% production of palm oil.
Indonesia has some of the richest primary rainforest and biodiversity on the planet. 50-60 million Indonesians depend directly on forests for their livelihoods, but Indonesia has lost more than 8 million Ha of forest since 2000 – an area twice the size of The Netherlands. Historically, the conversion of primary forests into oil palm plantations is responsible for more than 10% of deforestation in Indonesia between 1990 and 2010. Today almost 50% of deforestation in Indonesia is caused by conversion to large-scale oil palm plantations, though depending on the location, that proportion ranges up to 80%, with the oil palm fields of Sumatra and Borneo going down in history as the most rapid deforestation in human existence.
Approximately 600,000-1,000,000 hectares of forest area are converted into oil palm plantations annually in Indonesia, with an area of over 8 million hectares of existing plantations today, and will be increased to 13 million hectares by 2020.West Kalimantan is the fourth largest province in Indonesia. The total area reaches 146,807 km2 or about 26.98% of the area of Kalimantan Island. West Kalimantan has a huge natural wealth ranging from the richness of natural forests, mineral resources and the potential of fauna and flora. This condition then gives the impetus for the extractive industries to invest in massively exploiting the natural wealth.
In West Kalimantan, the development of oil palm plantations has increased quite rapidly during 2006 - 2014. In 2006, the area of oil palm plantation permit was 407,083 hectares. In the period of 5 years (2006-2010) the development of the permit increased to 2,501,489.73 hectares or about 614.49%. Then, in 2014, the development of oil palm plantation permits jumped sharply to 4,456,425.39 or 178.15%.
Currently, the number of licenses granted by the Government (Central and Regional) reaches 14,317,249.73 hectares or about 97.52% of the total area of West Kalimantan. 55.17% of the total area of West Kalimantan is Kawasan Hutan (State Forest), and 30.9% or 4,513,700 ha has been controlled by large plantation companies (oil palm is majority), 15.7% or 2,293,097 ha of forest are subject to pulp and paper plantation companies, and 34.7% or 5,074,337.81 ha of mining concessions.
Source: Compilation of various data, processed Link-AR Borne,2014
With the concentration of commercial and industrial land-use concessions and land-users in West Kalimantan, there is increasing pressure on indigenous and customary communities’ access to their natural resources and essential livelihood resources. At the same time, there is a weak land governance framework, weak land administration systems, weak monitoring and law enforcement in the plantation sectors, as well as the poor land management policies and poor implementation of forest and land-specific governance in terms of forest tenure.
The vulnerability of customary and indigenous communities is further exacerbated by the lack of accessible mechanisms for recognition customary land rights or granting of rights of access to communities with customary rights to acces, managing and control customary and indigenous forests. There is no clear policy or process which gives recognition to the existence of indigenous societies that are the de facto have rights holders of the land and it’s natural wealth.
The shrinking of physical space and shrinking of policy / civic space for customary and indigenous communities to organise and mamage themselves, to enunciate and assert their rights against governments and commercial land-users as forest-based and land-based industries continue expanding into customray forest areas further triggers struggles for land in both vertical and horizontal dimensions.
This rapid and unregulated expansion of palm oil plantations is the leading cause of land-use conflicts in Indonesia, and has resulted in tenurial conflicts and significant ecological, economic, cultural and social issues. Currently there are at least 128 cases of tenurial conflicts in West Kalimantan, which generally occur because of overlapping claims between indigenous and local communities with state forest areas and / or concession license areas of natural resource-based companies.
Despite the large number of companies operating plantations in West Kalimantan, many of these operating companies are owned by a small number of corporate groups that, through their corporate structures, have concentrated ownership of the palm oil plantation acreage in West Kalimantan. These groups include the Genting Group, Golden Agri Resources / Sinar Mas, First Resources, Cargill and Wilmar.
In terms of the palm ol supply chain, Wilmar has a near monopoly on the mill sector in West Kalimantan and, according to its own annual reports, Wilmar buys and processes 80% of crude palm oil produced in West Kalimantan through its mills and refineries network.
SYSTEMIC ISSUES IMPACTING COMMUNITIES – NO FPIC AND PLASMA FARMER MANIPULATION
1. Poor land governance and weak land administration system
A major underlying cause of conflicts between plantaiton companies and local communities is the poor standard of official land governance infrastructure (eg accurate maps, up to date information, searchable databases, available public information, adequate resources and expertise) and weak land administration procedures (eg, surveys, impact assessments, public notification and consultation, transparent concession issue procedures).
District Governments have authority to issue commercial land-use concessions within their government areas. In practice, District Government decision-makers often have very little information about the land they are dealing with, do not know where community and forest areas exist, do not know where customary or indigenous territories are, and make decisions based on incorrect or inadequate information presented by concession applicants.
For example, a review of community conflicts undertaken by the Civil Society Forum in October 2014 showed that of 411 large-scale plantation companies, as many as 158 oil palm plantation concessions overlapped with 622,570.04 hectares of community forest. This is directly due to poor forest and land governance by local governments (provinces and districts), especially in the spatial planning of areas devoted to the development of oil palm plantations.
2. No FPIC or consultation with local communities
A major direct cuase of conflicts between communities and palm oil plantation companies is the lack of genuine, good-fath engagement and consultation with local communities and absence of basic FPIC practices in cases where concessions overlap communal lands. This failure can relate to both land acquisition proposals (ie, land-grabbing cases where companies pressure or coerce communities into surrendering their land) or where the company does not provide information honestly and openly to indigenous peoples / farmers about the bonded smallholder schemes (known as “Plasma” schemes), for example, in relation to the Plasma profit sharing arrangement, the debt that must be paid by farmers, accurate income forecasts, post-contract credit, land clearing for plasma, termination rights, and land ownership during and post-contract. Companies often trick communities with promises of individual and communal benefits to form cooperatives as a cover for the company to additional land and finance for its plantation operations.
After agreeing to vague Plasma arrangements under expectations of the promised benefits, smallholders wait years for oil palms planted on their smallholdings to develop, only to realise they have been manipulated by the plantation company, receive nominal income, and are locked into long-term farming arrangements under which they effectively work as endentured labour supplying the plantation. In fact, many smallholders resort to labouring on the plantation itself to supplement their diminished livelihood.
The grievances of Plasma smallholders fall on deaf ears at both the compay and local authorities, and are left in uncertainty about their rights and an indefinite inability to use their land to support their livelihood.
3. Weak monitoring of palm oil plantation industry
The government itself is still very weak in monitoring the plantation sector, especially oil palm. For example, of the 411 plantation companies, very few have the official Right to Use as a base of rights of control and management of the area for oil palm plantations. The results of analysis conducted by Lingkar Borneo show that only 17% of the total area of plantation permits are subject to a HGU permit (business use permit). The rest is still limited to Location Permit and Plantation Business License (IUP).
There is a wealth of research and reports about the range of negative social, environmental, labour, gender, cultural and economic impacts caused by the palm oil sector. However, it is very difficult to get accurate information or statistics about the palm oil sector, and few complaints by communities are investigated and documented by local authorities. In many cases, palm oil companies corrupt local authorities and decision-makers through either direct ‘entertainment’ payments or by recruiting authority figures and public officials into the company’s payroll in nominal functions.
Comments