Indigenous peoples oppose oil palm in West Kalimantan

Down to Earth No 66  August 2005

Indigenous peoples' organisations are raising awareness of the negative impacts of large-scale plantations among their communities in West Kalimantan - a move that challenges powerful government and business interests.

A March meeting of indigenous communities from West Kalimantan discussed the downside of the provincial government's plan for a massive expansion in oil palm plantations. The gathering of around 300 people was called by the province's indigenous peoples' alliance (AMA Kalbar) to celebrate Indigenous Peoples' Day (Hari Masyarakat Adat Nusantara), but also to discuss political participation by indigenous communities, oil palm plantations development and the recognition of indigenous resource rights.

According to research by WALHI (Friends of the Earth Indonesia) West Kalimantan, 3.5 million hectares of land has been earmarked for oil palm plantation development in West Kalimantan (around 24% of the province's total land area) and two million ha of plantations are planned close to the border between East and West Kalimantan. Sixty-six companies have already secured licences for oil palm plantations, covering over 2 million ha. More licences are in the pipeline, including projects covering 240,000 ha in Sintang district (12 companies); 14,000 ha in Landak, Bengkawang and Pontianak districts (for state-owned plantation company PTPN XIII, using the new "KSK" model - see box below), and 304,500 ha in Ketapang district (4 new licences).

WALHI points to research by the Japanese International Cooperation Agency (JICA) which recommended five years ago that only 1 million ha of West Kalimantan be converted to oil palm plantations, in order to maintain an ecological balance in the province.

WALHI told participants at the Pontianak meeting what they could expect from the different stages of commercial oil palm development, based on the industry's record in the province.

At the land acquisition stage, communities may face intimidation and be forced to hand over their land because it is classified as "state-owned land"*; they may receive misleading information about how oil palm will bring them prosperity; the company is likely to make a lot of promises and bring along alcohol (arak) to assist in negotiations; and the allocation of oil palm plots on land relinquished by communities may be grossly unfair.

At the land clearing stage, community rubber trees may be deliberately burned; crops are bulldozed during the day or at night and then the community is expected to negotiate with the company; the company may sub-contract land clearing; and the communities will have to take on burdensome credit repayments. (In one operation, by a company named as PT MPE, credit repayments amounted to 30% crude palm oil production each month on credit of Rp11.4 million - Rp30 million per oil palm plot.

At the nursery stage, communities may find that newcomers get better deals than local people (for example, newcomers may get housing); labourers get low wages; and pesticides which are potential pollutants may be used.

Next, there may be long postponements to receiving their allotted land and signing the credit agreements (WALHI lists three companies - PT MPE, PT Bonti and PT HSL - where there has been an eight year delay). The plots allocated to local people may be difficult to access, and roads badly maintained. Some people who have handed over as much as 7.5 ha of land have not been allocated any land for oil palm cultivation whatsoever in return.

When the oil palms start producing, the plot-owning farmers cannot determine the price of the crude palm oil they sell; the farmers are not in complete control of how much they sell per month; and they are burdened by debt. Prices of CPO have fluctuated wildly. For example, in 1998-1999 the price was Rp175/kg; in early 2004 it was Rp750/kg and at the end of 2005 Rp614/kg.

In the post-production phase, past experience shows that farmers lose their livelihoods and land reclamation costs are high. Small rivers begin to dry up and there are other ecological impacts: floods in towns, outbreaks of locust/grasshopper pests, plus shortages of drinking water in many places.

WALHI West Kalimantan concludes that oil palm plantations cause conflicts over land, credit, sales of seedlings and labour. All decision-making is in the hands of the company - recruitment of labour, land required and fixing prices for palm oil. Monoculture oil palm plantations also lead to ecological imbalances like drought, floods and pest attacks.

*Despite some recent progress in the recognition of indigenous peoples' customary rights, in practice, many indigenous-owned areas both inside and outside forests are administered as if they were state-owned land.


Indigenous peoples' experiences
At the March meeting in Pontianak, there was support for oil palm plantation development from a number of participants, including a community representative from a remote area who described how oil palm estates would bring in a much-needed road long before the government got around to it.

However, others stressed the damaging impacts of oil palm development, including the negative effects on indigenous Dayak life. Gambling, prostitution, pregnancy outside marriage and alcohol were all associated with oil palm development. Several participants stressed how oil palm may, on the surface, seem to bring in more money, but that the cultural and environmental costs were high. Oil palm schemes brought a loss of decision-making power and made actual living costs higher. Oil palm cultivation does not allow traditional intercropping (tumpang sari) methods, as does rubber for example - the crop traditionally cultivated by farmers in the region. Tumpang sari involves planting vegetables and other crops together with the main crop, but the but the dense root system of oil palms and their heavy shade prevent this. This means families must buy vegetables, fruit and other forest products, no longer available after conversion to oil palm, thereby increasing family expenditure.

One woman participant expressed concern over these limitations, and the special implications for women's domestic role. "If the rivers dry up, where will we fish?" she asked. A member of the national NGO monitoring oil palm, Sawit Watch, told the participants how women tended to suffer more from the pesticides used on plantations, since they were typically given the job of spraying even when women are more vulnerable to the chemicals than men.

(Source: Sawit: Jalan Menuju Tanah Tertindas, Yohanes RJ, WALHI Kalbar, Pontianak 16/Mar/05; DTE meeting report) 


The KSK 'family' plantation model

Many large-scale palm oil plantations in Indonesia are run on the nucleus estate/smallholder model (PIR), where the company develops the 'nucleus' plantation and processing plant while the smallholders develop the 'plasma' area and sell their produce to feed the processing plant. The model was combined with the notorious state-sponsored transmigration programme during the 1980s and 1990s to ensure a cheap labour supply. These imported labourers, along with local people whose lands were taken for the plantations, received in return regulation housing, a 2 hectare plot for growing oil palm and subsistence supplies on credit until their oil palms came into production.

More recent variants of the PIR model are the various 'co-operative' schemes (KKPA), where communities who have given up their land to plantation companies receive subsistence level support for around 4 years until the oil palms start fruiting (see DTE 63 and our 2001 update on transmigration for more background).

In West Kalimantan, another new model was proposed in 2004 by the provincial government, called Kebun Sawit Keluarga (KSK) - 'Family Oil Palm Plantations'. The campaign to promote KSK has emphasised the prosperity angle: the programme is to be managed 'by the people for the people'.

West Kalimantan's Indigenous Peoples' Alliance (AMA Kalbar), which has met the state-owned plantation company introducing the scheme, PTPN XIII, to find out more about it, concludes that KSK is a ploy to expand large-scale oil palm plantations. It is a rehashed version of the old-style nucleus estate/smallholder model, but with more damaging consequences for farmers. This, says AMA Kalbar, is because the farmers take on all the costs and the company takes on none. Seedling preparation, fertiliser, planting, land clearing, transportation, road-building - all is done by the community, while the operating company gets the crude palm oil harvest without having to spend anything on transport and infrastructure.

According to AMA Kalbar's report of the meeting with plantation staff, in the Bengkayang district, the state reforestation fund has been earmarked for buying oil palm seedlings, which are currently in short supply.

AMA Kalbar believes that KSK has been designed to address PTPN XIII's internal problems, associated with its need for more land, its failure to secure loans from the World Bank and the fact that its current plantations have passed their productive stage, bringing a drop in profits. This has led the company to come up with a way of securing more crude palm oil without having to pay for additional operational and production costs.


An AMA Kalbar press release, calling on all its members to reject KSK, and for an investigation into a potential misuse of reforestation funds in Bengkayang, prompted threats of a lawsuit from the head of the KSK cooperative in February. The alliance received threatening phone calls, ostensibly on behalf of pro-KSK farmers, and, several days later, an anti-AMA Kalbar demonstration was staged outside the alliance's office, during which a member of staff was told she would be killed if she went to the villages.

AMA Kalbar has responded to three police summonses after being accused of damaging the good name of the KSK cooperative, but so far there has been no further action on the case. Meanwhile, the KSK plans are moving ahead.

(Source AMA Kalbar: Kronologis Kasus Gugatan Koperasi Kebun Sawit Keluarga (KKSK) terhadap Aliansi Masyarakat Adat Kalimantan Barat, 2005)