Conflicts between community and British-owned plantation company in Kalimantan

Down to Earth No 55  November 2002

Tensions between the plantation company HSL and the indigenous community in the Manis Mata area of West Kalimantan have increased. In July, the British-owned company started to clear villagers' customary land at Terusan even though the community has repeatedly stated its outright opposition to oil palm. The dispute is turning into a test case for indigenous land rights.

When Terusan villagers discovered that the contractors' bulldozers had destroyed about 100 hectares of their forest and fields and disturbed a burial ground, they were furious. They had twice informed PT Harapan Sawit Lestari (HSL) and the local authorities that they would not give up any customary land for oil palm plantations. After a village meeting on July 18th, they decided to confiscate the bulldozers. Later that evening, the Terusan community held a traditional court hearing. The charges were extremely serious: for the Dayak Jelai Sekayuq, desecration of graves is equivalent to murder. The verdict, according to customary law, was that HSL should pay a symbolic fine for damaging their forests and the graves. This took the form of providing traditional houses, musical instruments and antique urns in addition to food and drink - equivalent to Rp150 million (approx US$15,000) in cash. The bulldozer drivers agreed that HSL would pay the fine by July 25th.

Instead of paying the fine and settling this dispute directly with the community, HSL asked the Ketapang district authorities to intervene. The Bupati (district head) called a meeting on August 10th which was attended by the district assembly, HSL and selected Pontianak-based NGOs. The government-approved adat (customary)council was also represented. No-one came from Terusan as the community had not agreed to any mediation by a third party. The meeting was heated and, far from resolving the issue, made matters worse. Local NGOs were accused of being anti-development and even terrorists who are stirring up the local people and refusing to recognise the authority of the state.


The politics of mapping

The recognition of indigenous land rights lies at the heart of this and other conflicts in the Manis Mata area. West Kalimantan NGOs, including the Institute of Dayakology (ID) and PPSDAK, have pioneered participatory community mapping as a means of empowering indigenous communities - helping them to realise the extent and value of their customary lands and resources so that they can make informed decisions about their future use. Terusan is one of the villages which has, with technical assistance from NGOs, produced a community map.

HSL maintains that it gained consent to use the village land for its plantation, but from Silat not Terusan. It suggests there is confusion between the two communities over land ownership. This is most unlikely as part of the community mapping procedure is to negotiate the boundaries of customary lands with neighbouring villages. The Ketapang Bupati argues that only the government has the authority to make maps and that the NGOs' mapping activities are invalid, illegal and seditious. He has threatened to send security forces into Terusan and to take court action against ID.

ID has the longest record of supporting the indigenous movement in Indonesia and belongs to the Pontianak-based Pancur Kasih group, which itself has a solid reputation based on over 20 years of local community development work. Both organisations have challenged government orthodoxy that large-scale oil palm plantations bring prosperity to forest farmers.


Keladi: rights versus charity

Terusan is only one of several communities covered by HSL's concession. In the past, several others demanded fair compensation for land and crops. Some also demanded fair allocation of plots under the company's co-operative shareholder credit scheme (KKPA). A number of people still claim that they were forced to hand over their land and that there has been manipulation of consent forms and compensation payments. Many have tired of the struggle, having little alternative but to accept whatever the company offers. However, the people of Keladi are proposing a radical solution: they want the company to acknowledge their land rights by paying a commercial rent of Rp350,000 per family for each hectare of land used by the plantation, every month for the 30 years of the concession.

HSL refuses to consider the Keladi people's demands. Its senior management claims that to pay such an amount to one community would make other communities envious, but to pay them all would bankrupt the company. Instead, the company puts its faith in a community development program for all settlements in its concession which has the approval of the local administration. HSL has already improved the road to the village, cleared a football pitch, provided a generator and satellite dish plus some funding towards a church. The people of Keladi say they are not interested in handouts from the company; they want their rights to be properly recognised.


Harapan Sawit Lestari

The Harapan Sawit Lestari Group comprises 5 smaller companies: PT ASL Timur; PT ASL Barat; PT HSL Selatan; PT HSL Utara; HKM B. It has permits currently covering nearly 32,000 ha. Just over half this area had been planted with oil palm by June 2002. UK investment has made the HSL group one of the more successful plantation companies in West Kalimantan. CDC bought out HSL's Indonesian partner when it experienced financial problems and, since June this year, owns and manages the whole group. It is now looking to take over some neighbouring concessions. HSL-CDC took on many of the transmigrant workers abandoned without work or pay for several months when PT Polyplant went bust last year.

HSL-CDC also wants to expand its operations in the Kotawaringin Barat district of nearby Central Kalimantan. It has given funding to the local government and provided equipment and technical expertise for a bridge across the river that is the provincial boundary. Due for completion by mid-2002, this bridge establishes a road connection between the two plantation areas.


Human rights appeal

Fearing that the authorities could send in the notorious mobile police brigade at any moment, representatives of the Terusan and Keladi communities went to Jakarta in early October to seek help from the National Commission for Human Rights. The villagers are convinced that it is no coincidence that two local people who stood up to HSL and demanded their rights were later arrested on dubious, unrelated charges. They presented information to the Commission about the background to conflicts in HSL's Manis Mata concession, as well as the specific demands of the Keladi and Terusan communities. The Commissioners promised to take up their case straightaway by writing to the various parties involved, including the local authorities, the company and the National Land Agency.

The confrontations between the community and HSL, and between local NGOs and the Ketapang authorities had not been resolved at the time DTE went to press. The Terusan villagers were still holding onto the contractor's bulldozers until HSL pays the adat fine. The people of Keladi are solid in their demands for a fair rent for their land. The police have not been sent into the area. The Bupati has not initiated legal action. This stalemate is, at least in part, due to the problems of travelling between Manis Mata, Ketapang and Pontianak - an expensive two-day journey by road and boat at the best of times and well nigh impossible during the forest fires. It may also be prolonged by the fasting month due to start in November, since many local government officials are Muslim.

The situation is a tinderbox and could burst into violent conflict at any time. Two years ago, angry villagers in HSL's concession took up chainsaws and felled several thousand oil palms. On several occasions, villagers have set up blockades preventing plantation trucks from moving between the plantation and processing factory. There have been numerous letters, petitions and demonstrations to the district assembly and government offices in Ketapang. Members of the community presented their grievances to Britain's secretary of state for international development, Clare Short, when she visited West Kalimantan in October 2000. There are no Dayaks on HSL's senior staff and Manis Mata's official village head and sub-district officials are all Melayu people who have no customary land rights and follow different traditions.

HSL was recently taken over completely by CDC, and its management are promising a new approach which is based on listening, not confrontation. But many people in the Manis Mata concession feel that there have been too many unfulfilled promises from the company in the past. The numbers who are still prepared to stand up to the company are relatively few, but they are very determined.

(Source: communications with CDC, HSL, local NGOs and community groups)



Formerly the Commonwealth Development Corporation, CDC was a vehicle for UK overseas aid to the private sector in developing countries providing loans and equity mainly for agricultural ventures. It now finances a wide range of industrial and commercial developments in the private sector in the South. CDC is controlled by the British government, through the Department for International Development (DFID) which owns 100% of the shares. Plans to fully privatise the company by late 2001 have been postponed indefinitely. CDC has a statutory obligation to operate within the business principles agreed with DFID which contain clear ethical, environmental, health & safety and social policies.

CDC's operations in Indonesia are controlled through a Singapore-based holding company Pacific Rim Palm Oil (Pacrim), which describes itself as one of Southeast Asia's fastest growing palm oil plantation groups. Clive Taylor, chairman/president of HSL-CDC, is also Pacrim's Director of Agriculture. In addition to HSL in West Kalimantan and Asiatic Persada in Jambi, Pacrim currently owns three plantations in Papua New Guinea.

CDC has also provided financing for PT Agro Indomas, an oil palm plantation in Central Kalimantan managed by the Malaysian company Agro Hope Sdn Bhd. All these operations have problems over land rights. Community groups and international and local NGOs have raised a number of other social and environmental issues with CDC and DFID in recent years (see