bs_bs_banner Asia Pacific Viewpoint, Vol. 55, No. 1, April 2014 ISSN 1360-7456, pp6 23 Impacts of newly liberalised policies on customary land rights of forest-dwelling populations: A case study from East Kalimantan, Indonesia Mariko Urano Department of Economics, Hokusei Gakuen University, 2-3-1 Oyachi-Nishi Atsubetsu-ku, Sapporo 004-0042, Japan. Email: uranom@hotmail.com Abstract: Based on interviews and participant observation conducted in the province of East Kalimantan, Indonesia, from 2008 to 2012, this paper examines why the agrarian reforms have failed to secure the land rights of local farmers. Since the fall of the authoritarian government in 1998, Indonesia has seen limited, but growing government recognition of customary land rights of local farmers living in forest areas. I present a case study of two villages, in which the greater discretion on the part of the local community to negotiate with large-scale oil palm estates has led to the abuse of power by local elites, as well as territorial tensions between local communities. The finding questions the optimistic view that state recognition of customary land rights of communities would automatically lead to the security of landownership of local farmers, and its underlying image of harmonious local communities in which members share coherent interests. The agrarian reform that has centred on communities rights of control over land and natural resources is problematic. When local communities do not possess capabilities for resolving conflicts in an equitable and transparent manner, third-party intervention is needed to assist communities to strengthen local land rights. Keywords: Borneo, customary landownership, forest, Indonesia, oil palm estates Introduction Since the fall of the authoritarian Suharto government in 1998, Indonesia has seen limited, but growing government recognition of customary land rights of local populations living in forest areas. As in many other developing countries, rural populations in Indonesia customarily own and use their land without formal legal protection of the state. The legal insecurity of the populations has been the source of many land conflicts when outside investments advance into the customarily owned areas for the development of land and natural resources. After the transition from the authoritarian regime in 1998, the rapid pace of exploitation of natural resources which took place under the Suharto regime continued, and in some cases accelerated. Increasing investments in the primary sectors have led to alienation of land from local farmers. Meanwhile, in the liberalised policies toward customary land rights, local communities are given greater discretion to negotiate with resource development companies. However, in some cases, the greater discretion given to local communities has led to the abuse of power by local elites, as well as territorial conflicts among local communities. Why has the official recognition of customary landownership often failed to provide forestdwelling populations with the security of customary landownership? What are the challenges that local farmers face and must overcome in order to secure their customary land rights in the new land policies? In order to examine the above questions, first, I will review the changes in Indonesian state policies about customary tenure. Although still limited, as the Indonesian government became democratised, there has been gradual recognition of the customary forms of landownership in state policies. Importantly, the state recognition doi: 10.1111/apv.12042. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
The impacts of newly liberalised policies of customary land rights has centred on ulayat rights, or communal rights of control over land and natural resources. Second, I will overview the growth of the oil palm industry in the District of East Kutai, Province of East Kalimantan. Then, based on data that I gathered during a series of field research trips, I will describe changes in local perceptions about the meaning of landownership among Dayak farmers against a backdrop of the increasing advancement of investing companies. Third, I will compare the cases of two neighbouring Dayak communities in the District of East Kutai: one accepted the advancement of oil palm estates in their village area, while the other rejected such advancement and instead tried to take advantage of the opportunity of a state-sponsored Community- Based Forest Management programme to secure local customary land rights. Although the responses of the two communities to the oil palm estates are different, both cases highlight the problematic nature of the community-based state recognition of customary land tenure to empower local farmers by securing their land rights. The data that I use in this paper were collected through a series of interviews and participant observations conducted in the Sub- District (kecamatan) of Busang, of the District (kabupaten) of East Kutai, Province of East Kalimantan, from 2008 to 2012. The first time that I conducted field research in the area was an 18-month period from 1998 to 1999. 1 Ihave visited the area once or twice a year since 2003, for a few weeks each time. During my research, I stayed in villages of Dayak farmers and interviewed the populations while engaging in participant observation. Problems of customary tenure in Indonesia Land reform in Indonesia and its problems The fall of the authoritarian Suharto regime in 1998 has triggered a horde of tenurial claims from local farmers who have long been deprived of opportunities to express their concerns on their violated land-use and landownership rights. An important characteristic of Indonesian agrarian legislation is that the recognition of customary forms of land use and ownership of farmers has been centred on customary (adat) law communities, or often simply abbreviated as customary communities, and their ulayat rights, communal rights of control over land and natural resources. Customary law communities are defined as those population groups that have resided in a certain geographical area for generations based on their ancestral origins, strong relations with the local environment, and value systems regulating economic, political, social and legal institutions (Law No.32 of 2009 on Environmental Protection and Management, Chapter I Article 31). Ulayat rights of customary law communities are supposed to constrain individual land rights of community members (Harsono, 1997: 179 82). The Indonesian Basic Agrarian Law of 1960 recognises the ulayat rights of customary law communities. However, the law gives national interests priority over the customary land rights of local communities, and the Suharto government arbitrarily interpreted the law for the interests of its own members and close allies (Barr, 1998). Meanwhile, recognition of the rights of customary communities was not supported in laws related to the resources sector. For example, the Basic Forestry Law and Basic Mining Law of 1967 did not respect the rights of local populations (Sirait, 2009: 22). The Basic Forestry Law declared that all forest areas belong to the state, and that the Ministry of Forestry held the authority to distribute rights of exploitation to private companies. Under the extremely repressive Suharto regime, the local farmers dared not protest even though their land-use and landownership rights were frequently violated by the encroachment of logging, mining and plantation development. Since the fall of the Suharto regime in 1998, there has been gradual democratisation and greater recognition of the land rights of customary communities in Indonesian politics. However, the degree to which those rights are recognised has not been consistent and laws and regulations are often found inconsistent and contradictory. The Basic Forestry Law of 1967 was replaced by the subsequent Law No.41 of 1999 on Forestry, which includes clauses stipulating that the rights of customary law communities over customary-owned forest are respected, but as long as those rights do not conflict with state interests (Article 4.3). 7
M. Urano Ministerial Regulation No.5 of 1999, issued by the Minister of Agrarian Affairs/Head of the National Land Agency, on Guidelines to Solving the Problem of Ulayat Rights of Customary Law Communities, Law No.18 of 2004 on Plantation Estate, and Law No.26 of 2007 on Spatial Planning include positive clauses that would lead to greater recognition of local land rights, but the recognition is limited by the discretion of the local government. The Minister of Agrarian Affairs/Head of the National Land Agency Regulation on Guidelines to Solving the Problem of Ulayat Rights of Customary Law Communities of 1999 gives instructions for district level governments on how to deal with claims of ulayat rights, or communal control over land, including conducting research and mapping of communal rights (Chapter III Articles 5 and 6). Under this regulation, there are four district governmentissued regulations that recognise the land rights of customary communities. 2 However, the possibility that customary land rights will be recognised is seriously limited, because Chapter II Article 4 of the regulation states that customary land rights are not recognised when the land is already owned and used by a third party under permission of the state authority (Bakker, 2008; Sirait, 2009: 22 23). Law N18 of 2004 on Plantation Estates requires the applicant for the right to run a plantation estate to conduct a discussion with the customary law communities holding customary right upon the land in order to obtain an agreement on the utilisation of the land and a fee for that utilisation; (Chapter III Article 9.2, translated in Sirait, 2009: 24). But the General Explanation of the Law (Article 9.2) limits the conditions by which local populations are legitimately recognised as customary law communities. The rights of customary law communities are recognised only if they are able to obtain recognition from the district government in the form of a district regulation. Law No.26 of 2007 on Spatial Planning also provides that the participation and land rights of customary communities are respected in the process of spatial planning (Chapter IV Article 7.3 and its Explanation; Sirait, 2009: 24 5). But given the contradictory restrictions in the other laws, the rights of customary communities remain unclear and weak. At the level of the national parliament, the People s Consultative Council Resolution No. IX on Agrarian Reform and Management of Natural Resources was passed in 2001. The decree states that the People s Consultative Council is mandated to resolve the problems of poverty, inequality and the destruction of natural resources. According to Article 5 (j), agrarian reform and management of natural resources should be in accordance with the principles that recognize, respect and protect the rights of adat law communities, and culturally diverse manners of agrarian/natural resource management (translated in Lucas and Warren, 2003: 113). Many NGOs welcomed the move of the parliament, but the decree s recognition of the land rights of customary communities contradicts the emphasis it places on the role of natural resources as a form of national wealth that must be exploited (Lucas and Warren, 2003: 113 6). Who are customary communities? The other problem associated with the recognition of customary land rights of local populations is the ambiguous definition of adat, or customary, communities. Having concerns on environmental damage and human rights violations caused in the process of natural resource development in forest areas, Indonesian NGOs have supported the land claims of local farmers since the early 1990s. The NGOs have integrated the notions of customary communities in Indonesian agrarian legislation and the human rights attributed to indigenous populations in their support (Persoon, 1998). The Alliance of Indigenous Peoples of the Archipelago (Aliansi Masyarakat Adat Nusantara, AMAN), which was established in 1999, represents a movement of local farmers who are fighting for the land rights of customary communities in cooperation with NGOs. The communities indicated by AMAN may range from a single village of a couple of thousand inhabitants to a larger alliance of villages or even an entire ethnic group numbering twenty thousand members or more (Acciaioli, 2007: 300). The ambiguous definition of customary communities has often triggered problems: Who would be the most legitimate owner of the land and natural resources? What would be the 8
The impacts of newly liberalised policies ethical and equitable decision-making process within the communities? Many ethnic groups that have distinct histories of settlement often use certain areas in an overlapping manner. Li (2007) and Eindhoven (2007) report cases in which the elites of certain ethnic groups used elements of tradition as political instruments so that they could claim stronger rights over land and natural resources than other ethnic groups. Similarly, when development companies wish to obtain agreement with local populations for the use of customarily owned land and natural resources, the elite members of the society often monopolise decision-making and the benefits gained from the negotiation (for examples, see McCarthy, 2004, 2006). The above problems indicate that customary communities do not always possess the capacities to peacefully solve border problems with neighbouring communities on their own, or to carry out sufficiently equitable decision-making within the communities. A presupposition of Indonesian agrarian legislations is that ulayat rights, communal rights of control over land belonging to the territory, arise from customary laws shared by the members of communities. However, such idealised views of communities do not conform to the reality that rural farmers have diverse identities and interests. Many communities are often ethnically diverse, and even community members having the same ethnic background could be differently positioned in the society depending on the differences in their incomes, positions in aristocratic hierarchy, age and gender. The lack of recognition of diverse interests existing in local communities in the state legislation presents major obstacles for local farmers who wish to strengthen their customary land rights. Case study from East Kalimantan: Oil palm plantation development in District of East Kutai and changing perceptions about meaning of landownership Despite the gradual, yet limited, progress in state policies that respect the land rights of customary communities in the era of political reform, the Indonesian government has simultaneously adopted business-oriented policies of economic development and facilitated private investment in natural resource exploitation. The District of East Kutai, Province of East Kalimantan, the location of my field research, has seen rapid expansion of oil palm plantations developed by private estates. The increase in development of land and natural resources by private companies has caused alienation of land from local farmers, as well as adverse impacts on the local environment. Simultaneously, the local populations have become aware that local land and natural resources could be of high value, when private investors advance and offer compensation and fees. Against this backdrop, there have been increasing territorial conflicts both between local populations and investors, and between local communities. In this section, first, I will overview the development of the oil palm industry in the District of East Kutai. Second, relying on the interviews that I conducted in the Sub-District of Busang, located in the District of East Kutai, I will examine the manners in which local farmers have strengthened consciousness as owners of land and natural resources (Figs 1,2). Oil palm plantations in District of East Kutai, East Kalimantan Palm oil and palm kernel oil combined became the most produced edible oil commodity in the world, surpassing soybean oil in 2003. Indonesia has been the largest producer of palm oil since 2006, and the area of oil palm plantations in Indonesia had reached 8.99 million ha in 2011 (Direktorat Jenderal Perkebunan c. 2013). Oil palm estates have been developed in combination with processing mills, due to the characteristics of oil palm fruits, which must be processed within 48 hours after harvest of the fresh fruit bunches in order to avoid rapid deterioration of quality. Due to the need to build processing mills close to the production site, the oil palm industry consists largely of large-scale oil palm estates. The area where a vast expanse of land is available lies in the interior part of the Outer Islands, specifically the former operational areas of logging companies. Indonesian oil palm plantations were first started during the Dutch colonial period on the Island of Sumatra, and expanded to the Province of West Kalimantan in the 1970s. Before 1993, the oil palm plantations were developed by state-owned companies. However, as the 9
M. Urano Figure 1. Province of East Kalimantan Source: Robert Cribb 2010, Digital Atlas of Indonesian History, Provinces 2007, reproduced with permission. 10
The impacts of newly liberalised policies Figure 2. District of East Kutai, Province of East Kalimantan Source: Left: Robert Cribb 2010, Digital Atlas of Indonesian History, Kalimantan Timur Administrative Divisions 2007, reproduced with permission. Right: Kelompok Kerja Program Sumberdaya Alam (KKPA SDA) Kalimantan Timur, c. 2004:12. 11
M. Urano government has encouraged private investment in the oil palm industry since 1993 and the commodity price of palm oil has become higher, many big private companies have developed their estates in other parts of the Outer Islands, including Central and East Kalimantan, Island of Sulawesi and West Papua. After the fall of the Suharto regime in 1998, in the context of political reform and fiscal and administrative decentralisation, the local governments came to hold greater authority to issue permits for natural resource development. The stronger power that local governments came to wield over the development of natural resources accelerated the rapid expansion of oil palm plantations. In 2002, the District Heads (bupati) came to be allowed to issue permits of up to 1000 ha of oil palm estates and Provincial Governors to issue permits of over 1000 ha (Colchester et al., 2007: 46). As local governments came to hold the rights to issue permits for establishing oil palm plantations, previously controlled by the central government in Jakarta, local political elites and their entrepreneur allies obtained easy access to oil palm plantation establishment permits (Sirait, 2009: 4). Oil palm estates in East Kalimantan were first developed in the District of Paser, located in the southern coastal part of the Province, by the state-owned companies in 1982. But private oil palm estates have rapidly expanded in former forest areas located in other Districts such as East Kutai, Kutai Kartanegara, Nunukan and Berau. In 2012, the District of East Kutai hosted 307 368 ha of palm oil plantations, more than 30% of the total oil palm plantation area in the Province, 961 802 ha (Dinas Perkebunan Provinsi Kalimantan Timur, c. 2013). Support of the Provincial and District governments toward private investments in the oil palm sector has driven the dramatic expansion. In 2012, Isran Noor, District Head (bupati) of East Kutai who had been actively promoting the development of oil palm estates, argued that the investment in oil palm estates would increase the economic welfare of the local populations, and that it was not true that oil palm development would destroy the environment. 3 However, the environmental destruction caused by the development of plantations has given rise to serious concerns. In 2012, Isal Wardhana, director of East Kalimantan Friends of the Earth commented that 350 000 ha of forest in East Kalimantan has disappeared in the past two years, due to the development of coal mining and oil palm plantations. 4 The development of oil palm estates and the vast scale of agricultural transformation on the Outer Islands have been rationalised by the ideology of bringing development to local populations living in poverty and backwardness (Zen et al., 2005: 4 5; McCarthy and Cramb, 2009: 113). In 1978, the Indonesian government adopted the Nucleus Estate Scheme (Perkebunan Inti Rakyat, PIR), which had been pioneered in African countries in the 1950s, in order to involve smallholders in the development of oil palm plantations. In earlier PIR schemes, 20% to 40% of a plantation, called the nucleus estate, was directly managed by a state-owned or private company, while the remaining 60% to 80% was allocated to smallholders as plasma (satellite) plantations, each with an area of 2 or 3 ha. The companies built plasma plantations on behalf of the participating smallholders, provided them with highyielding oil palm trees, fertilisers and pesticides, and ensured the purchase of fresh fruit bunches produced by the farmers. The farmers owe the company the cost in the form of bank loans, but after completing payment of their debt, they would gain landownership of their plasma plantation areas. Although several criticisms have been raised against PIR schemes, 5 many farmers have managed to raise their incomes by participating in them (Achmad et al., 2010; McCarthy, 2010). However, under the revitalisation scheme, which was issued by the Minister of Agriculture in 2006, smallholder participation in oil palm plantation development was considerably reduced compared to previous schemes: only 20% of the total estate area was allocated to plasma plantations. 6 In the previous system of PIR management, participating farmers were directly involved in the production. Instead, in the revitalisation scheme, using bank loans, oil palm estates would establish plasma plantations for the participating farmers. After establishing the plasma estates, the companies would manage the areas on behalf of the farmers for 35 years, and the participating farmers would receive only the remaining portion of the profit after the companies had deducted the repayment of bank loans and company management 12
The impacts of newly liberalised policies fees. As the participating farmers are not involved in production, it is uncertain to what extent of the profit would be secured for the them (Kawai and Inoue, 2010). In 2012, of the 307 368 ha of oil palm plantations in the District of East Kutai, 241 550 ha, or nearly 80%, was controlled by the private estates. Meanwhile, smallholder estates in the District covered only 65 818 ha (Dinas Perkebunan Provinsi Kalimantan Timur, c. 2013). Background of the research site and increasing local consciousness as landowners There are six villages (desa) in the Sub-District of Busang, District of East Kutai, which I call Villages A, B, C, D, E and F in order to keep their anonymities. The area is located along the Atan River, a tributary of the Mahakam River. It takes from one to two days, depending on the road conditions, to get from the villages to the provincial capital Samarinda, using an automobile and a small boat. The populations mostly belong to the Dayaks, natives of Borneo. The majority of the population of Village A are Dayak Modangs and the majority population of the other villages are Dayak Kenyahs. Most of the populations are swidden farmers, but they have also conducted cash-crop production, primarily of cocoa, coffee and rubber, since the 1990s. The Dayak populations living along the Atan River originally came from Apo Kayan, near the border with Malaysia. According to the history told by the local populations, Dayak Modangs migrated to this region and settled with the permission of the Sultan of Kutai in the 16th century. The Dayak Kenyahs started their migration in the early 20th century, and this continued until the 1980s. According to interviews with the populations, they migrated because they were annoyed at the inconveniences of living in the hinterland and wished to gain better access to the advantages the city offered, including education, medical services and employment opportunities. In the 1970s, as the Suharto regime adopted policies to introduce foreign investment to develop natural resources, large-scale timber development schemes took place in the area along the Atan River. While the populations experienced the violation of fallow land and destruction of fruit trees as a result of the logging operations, the benefit that they enjoyed in return was a meager income as low wage labourers and from vegetable sales at the logging camps. The logging operations faded away around 2000, due to the depletion of timber resources. After the logging companies withdrew and the low-wage employment at the logging camps disappeared, the populations were left without a substantial source of cash income and are categorised as being in a state of poverty. 7 The populations are well aware of the importance of education as a means to climbing the social ladder, but most of them do not have sufficient sources of income generation to finance the education of their children. The interviews and participant observation that I have conducted in the Sub-District of Busang provide ample evidence of an increased awareness about the importance of landownership among local Dayak farmers. According to their customary laws, once a member of the community opens a land plot of primary forest for farming, he or she would be recognised as the owner of the plot. The landowners often grow perennial crops such as fruit trees on the land in order to mark their ownership of it. As Dayak farmers conduct swidden rice cultivation in rotation in order to keep the land sufficiently fertile, they keep their agricultural land fallow in the years that they do not cultivate. Still, the ownership is recognised among the members of the community to which the owners belong. The cases of selling and buying fallow land among the populations, although not common, suggest that there exists clear local recognition of individual landownership within the community. In the 1990s, many Dayak farmers started cocoa, and then coffee and rubber, plantations. The increase among Dayak farmers of smallscale cash-crop production, which entails the continuous occupation of land and routine care of crops, has strengthened local consciousness about the importance of their individual landownership. The advancement of natural resource companies has been a critical factor that has given rise to the sense of urgency to provide evidence of landownership not only among local populations, but also vis-à-vis investing companies and government officials. Threatened by the encroachment of logging companies, individual members of local 13
M. Urano populations came to feel that registration of land was necessary to protect their landownership. According to my interview in Village F in 1999, some villagers had actually tried to register their land and submitted documents that they believed were necessary to the local Sub- District government office. The documents included the measurements of each parcel of land that they wished to register, and signatures of the owners of neighbouring land plots, the neighbourhood association head and the village head as the witness. But they were unable to register their land parcels because, the villagers explained, registration would cost 100 000 rupiahs (approximately 10 US dollars) per hectare. The interest in land registration has remained strong. In 2010, the head of Village A told me that the villagers wished to obtain land certificates, but the cost was too expensive. In fact, the local populations had been unable to get exact information on whether their lands were eligible for registration, how to register their land, or how much it would cost. 8 In 2012, a member of Village F prepared a GPS-based map indicating land parcels owned by several villagers. He showed the map to the Sub- District head of Busang and asked if the map could be used for the purpose of land registration. But according to the Sub-District head, the lands of Village F were not eligible for registration by individual farmers because most of them had been classified as forest areas. The lands classified as forest areas belong to the state under the Forestry Law, over which the Ministry of Forestry holds the authority to grant resourcedevelopment permits to private companies. Permits for agricultural activities, including the cultivation of oil palm estates, are allowed only in those forest areas classified as conversion forest (Colchester et al., 2007: 67 9; Potter, 2011: 170), but local populations are not consulted when the government agencies classify forest areas or even informed of which forest categories their land belong to. Therefore, local land rights would remain insecure. Reactions to oil palm plantation estates: Examples from two villages In the process of democratisation and fiscal and administrative decentralisation of Indonesia since 1999, the general trend is that the rights of customary communities on land and natural resources are better respected by the government. When development companies wished to operate, obtaining agreement from local populations became mandatory either in the written laws and regulations, or in the unwritten codes of conduct at various administrative levels. However, many companies have tried to minimise their cost and buy the agreement of local elites, without gaining genuine consent from the local communities. In the case of the Sub- District of Busang, an examination of two villages, namely Village D and Village A, shows that policies set up to respect the rights of customary communities have brought contrasting consequences depending on the different attributes of leaders and how the leaders were positioned in the societies they represented. The case of village D: Impacts of oil palm plantation on local lives Hamparan Perkasa Mandiri (HPM) Ltd and Subur Abadi Wana Agung (SAWA) Ltd, which have advanced into the Sub-District of Busang, District of Kutai belong to the same corporate group, but are established as two estates, complying with a government regulation that limits the size of an oil palm plantation to 20 000 ha (Colchester et al., 2007: 58). HPM Ltd and SAWA Ltd started their operation in 2007. There are five villages in their operation area, namely, A, B, C, D and E. Among the five villages, onlyvillage A rejected the advancement of the companies in their village area. The total size of oil palm plantation areas developed by HPM and SAWA is 26 000 ha. According to my interview at the estate camp of HPM in March 2009, none of the white-collar employees working at the office was from any of the the local populations, while about 400 low-level labourers who were employed on a daily basis included both the local population workers and migrants who came from other areas of Indonesia. I conducted interviews and participant observations in Village D during two visits, in August 2009 and March 2010, regarding the impact of the oil palm estates on local society and livelihood. In Village D, the operation area of HPM was located right across the Atan River, and that of SAWA adjacent to village land. When I con- 14
The impacts of newly liberalised policies ducted interviews in Village D in 2009 and 2010, only HPM had started its operation, while SAWA started clearing the prospective operation site in 2011. I would like to assess the impacts from four aspects, namely, land conflicts, local employment, accountability and transparency of the partnership arrangement between the companies and populations, and the planned distribution of oil palm estates to the local populations. Land conflicts Given the vast size of the land that the oil palm estates acquired for plantation sites, land conflicts with local populations were inevitable. In 1993, the elites of Dayak Kenyah communities living along the Atan River, including those of Village D, made an agreement that 7 km from the riverbanks on both sides should be protected as customarily owned land of Dayak Kenyahs. The decision was the response of the populations to the increasing encroachment of logging companies on their land use. Based on this decision, the Kenyahs had negotiated with local government officials and logging companies so that they would be able to keep the land areas intact for the use of local communities, specifically for their rice production. However, in the negotiations with logging companies, the Dayak populations had to compromise and reduce the area that they could keep intact from company operations. In their relation with HPM, Village D tried to keep 3 km from the riverbank intact from the oil palm plantation. However, the then Sub-District head, who strongly supported the advancement of oil palm estates, made an agreement with the company that the operation area could be sited as close as 1 km from the riverbank. The villagers were not consulted when the agreement was made. HPM did not respect even this agreement and expanded its operation coming as close as 300 m from the riverbank. Company operations in such close proximity to the riverbank caused the river to become polluted, and the decrease of fish and harmful effects on health became a local concern. In relation to land acquisition, there were 10 households who owned fallow lands in the area that was cleared for the operation. They protested against the intrusion of oil palm estates into their land, but the company continued to appropriate the land. The landowners then asked for compensation, but the company did not respond. One villager from Village E, which is located nearby Village D, lost his 30 ha of rattan garden. Such cases of land conflicts were inevitable because, once having received a permit from the District government, the oil palm estates owned the right to operate in the area. The legal obligations imposed on the companies to gain agreement from the local populations for their operations were easily evaded, by taking advantage of local ignorance or obtaining easy agreement from corruptible members of the society. The company presence has had an impact on what landownership means to local lives, and given rise to a new perception of land, which, in addition to farmland, also includes the notion of land as property that could be valuable for future exchange. According to my interviews in August 2009, the 10 households affected by company operations included three families who had already moved to Pampang, a village located close to the provincial capital Samarinda, before the advancement of HPM. They claimed the land not because they had lost their farmland as a means of subsistence, but simply for compensation. Another affected landowner was a middle-school teacher who had taught in a village located downstream for 19 years. He said that he was planning to return and currently in the process of applying for a teaching assignment in Village D. He and his cousin, who had already moved to Pampang, co-own 7 ha of land that had been cleared by HPM, and the company offered them plasma land in another location to resolve the case. But the teacher did not accept the offer, because he believed that the current land was larger than the plasma land that the company offered, and also far more valuable because of the potential of developing a coal mine. His assumption of a potential coal deposit under his farmland was not baseless, because there was a coal mining company operating next to HPM. The land claims made by individual landowners suggest that the land interests of local populations have become diverse and no longer limited to those of traditional subsistence farming. The diversity of local land interests certainly do not fit the idealistic notion of coherent communities regulated by customary laws, and raises the question of to what extent local community 15
M. Urano organisations are in appropriate positions for making decisions on behalf of the populations. Problem of employment The benefit of employment for local populations was limited, and the prospect of growth in local income was far from robust. When employed, women labourers were assigned to weeding and growing seedlings, for a wage of about 40 000 to 50 000 rupiahs (four to five US dollars) a day. Male labourers were hired under short-term contracts to build estate facilities. The salary from employment at HPM would be higher than the minimum wage in the Province of East Kalimantan, 800 000 rupiahs a month, working full-time. As the average revenue of the adult villagers of Village D was about 400 000 rupiahs a month, the income that they were able to gain from employment was a positive side of the company s presence. However, there are primarily two reasons why the benefit is neither substantial nor sustainable. First, in terms of working hours, swidden rice production is not compatible with long-term labour at the oil palm estates. Therefore the local populations have to choose either rice production or employment at oil palm estates. Meanwhile, if they have to buy rice, the income earned through employment was not sufficient for the local populations. The villagers sought employment at the estate when they could, depending on which stage of rice production the villagers were at, prioritising their swidden rice production over employment at the oil palm estates. Thus, the number of villagers working at the estate ranged from 40 to 100, depending on the season. Consequently, the income resulting from employment is limited. Second, the company had promised the villagers of Village D that they would give priority to the employment of local populations, so that the company operation would benefit local livelihoods as much as possible. But the company hired about 50 labourers from Java and Flores because, according to the explanation of the company officer, the number of local villagers who regularly took employment was not stable and they were not a dependable source of employment. But the reality is that the migrant workers are easier to handle as a labour force for the company than the local villagers. The migrant labourers from Java and Flores came to the oil palm estates by being transported by the company. Owing money to the company, they are obliged to take harsh working conditions that the local populations would not endure (see the similar observation on migrant workers in Li, 2011). In sum, oil palm investment in the Sub- District of Busang has not resulted in the creation of jobs at the estates that benefit the local populations. While local populations lose access to their land, the jobs that could mitigate the loss of their livelihood are taken by migrants (A similar observation was made in the 2011 World Bank report on farmland investment. Deininger and Byerlee, 2011: 68 9). Accountability and transparency of partnership arrangement In return for the land that they provided to oil palm estates, local populations are to be benefited by a partnership (kemitraan) arrangement, in which the estates are to assist them in a manner on which the two parties have mutually agreed. The partnership arrangement is materialised by cooperatives (koperasi), a formal legal entity established by local farmers. According to the agreement, cooperatives would function as a partner of the company and undertake certain tasks on its behalf, for example, employment of local populations. Importantly, cooperatives would provide oversight of the plasmas on behalf of the companies in the revitalisation scheme. The former Sub-District head and the company concluded a partnership agreement that did not reflect the opinions of the villagers, and established a cooperative that could be manipulated. The villagers of Villages C, D and E carried out a demonstration against the company in March 2010. One complaint of the villagers was that the cooperative, as a contractor of the company, had made available land that lay within 100 m from the side of an automobile road, as well as land located within 3 km of the riverbank, without their agreement. The villagers were also angry because the company had concluded an arbitrary agreement with the cooperative that the company could obtain timbers harvested within the land they operated. The villagers believed that, according to the agreement that the company had made with the villagers, the 16
The impacts of newly liberalised policies timbers should be brought to the village area for the use of the populations. Some villagers suspected that the cooperative and company had subtracted a part of the salaries earned through their employment at the estates: they had signed a contract with the company for payment of 1 million rupiahs, but the cooperative, acting as an intermediary, had paid them only 450 000. Due to this conflict with the villagers, HPM suspended its operation and terminated all local employment. As has been pointed out in other cases (McCarthy and Cramb, 2009: 116; McCarthy, 2010: 830 1; Gillespie, 2012: 266 7), in partnership arrangements between companies and local populations, the operations of the cooperatives, which were supposed to function as an intermediary between the company and local populations, were often neither accountable nor transparent, and became the source of grievance on the part of the populations. The case observed in the Sub-District of Busang shared the same problem. Distribution of oil palm plantations and lack of information The distribution of 20% of the plasma plantations is said to be the major benefit that the local populations would receive from oil palm plantation development. According to information from the field manager of HPM in March 2010, the company had already established 2000 ha of plantation, and thus an area equal to 20% of the plantation, or 400 ha, was supposed to be distributed to the local villagers as plasma plantation plots. However, when I conducted interviews in Village D in August 2011, the villagers had not received any plasma plots, and little information was available to them about where the possible plasma plots would be. Under the revitalisation scheme, the farmers who received plasma plots are not allowed to grow palm trees or produce fruits on their own as in the previous PIR system, but only receive rent. The local cooperatives are responsible for production and provide farmers with profits after deducting the costs needed for the development of plasma plots and the cooperative s fee for providing oversight. In the absence of a trusting relationship with the cooperative, the scepticism of local farmers about the promised gain was reasonable. Decision-making monopolised by elites In sum, in the case of the Sub-District of Busang, District of East Kutai, the advancement of oil palm estates did not contribute to the welfare of the local villagers, due to the land conflicts, the little benefits that the local populations received from employment, the lack of transparency in the partnership arrangement, and the distribution of plasma plantations. Although the above issues were a source of great concern to the villagers, Village D officially accepted the presence of HPM and SAWA, because the decision-making was monopolised by the local elites. Dayak Kenyahs, to which Village D belongs, are known for their hierarchical social structure. In Village D, there are three local leaders: the village head, the village customary head and the customary head of Atan River. The Sub- District of Busang was created in 1999, and the office of Sub-District head has been located in Village D since then. The Sub-District head in 2007, when HPM and SAWA advanced, was actively promoting advancement of oil palm estates. Being close to the Sub-District government, the village head and customary head of Village D did not oppose the advancement of HPM and SAWA. Meanwhile, the customary head of Atan River opposed the companies, influenced by NGOs in Samarinda that provided him with information about the potential risks of land loss and environmental destruction. However, according to his own explanation, the employees of SAWA visited him late one evening, and he signed a document without reading it carefully. It turned out that the document was meant to be the local populations approval of the operation of the company. When I conducted interviews in 2008 and 2009, the opinions of the villagers of Village D about the advancement of oil palm estates were divided. The then-sub-district head had told the villagers that the villagers would receive plasma plots, from which the villagers would accrue a profit of 2 million rupiahs a month even at the starting stage, and later the profits would increase to 4 to 5 million rupiahs a month. The new Sub-District head who took the job in 2009 was a Dayak Kenyah and originally from Village F. In 2009, the conflicts between the villagers and the company became salient and he 17
M. Urano received complaints from the villagers whose land was affected by company operations. In my interview in 2009, the new Sub-District head said that he recognised both the good and bad sides of oil palm development. While the company presence would accompany road construction, which was necessary for populations living in the hinterland, he was aware of the bad impacts on local culture, specifically the violation of customary land rights of local communities. He said that the local populations benefit from the distribution of plasma plantations would be the key, and without this, the company would just take advantage of them. The new Sub-District head was trying to resolve the conflict associated with the cooperative by making an arrangement whereby the local populations could choose between the cooperative that had worked with the company, and a new cooperative that was supported by many of the local populations. But he refrained from taking sides in the conflict between the company and the local farmers. In 2011, SAWA cleared the land for its operation, which was an area of 24,000 ha, while HPM had already opened 2000 ha since 2007. Learning about the vast area of land that SAWA had cleared, the villagers were astonished. Many villagers became worried whether they would receive allocations of plasma plantations, as the companies had claimed, and also concerned with the ongoing escalation of river pollution. However, the populations felt that it was too late to reclaim the land appropriated by the estates because company operations had already started. The case of Village A: Community-based forest management initiative to counter business interests and accompanying territorial tensions Village A, consisting of three settlements of different ethnic origins, Dayak Modang, Kutai and Bugis, is one of the six villages located in the district of Busang. In Village A, the village head was in a close relationship with NGOs in Samarinda and rejected the advancement of HPM and SAWA into village areas. Most of the Modang villagers of Village A were Catholics, and the Catholic priest who had lived in the village since 2004 supported the initiative of the village head by talking to the villagers about the risks of oil palm estates, including land conflicts and environmental destruction. In Village A, the village head and the Catholic priest played important roles in attracting NGO support and organising the villagers. The villagers have cooperated with an NGO in Samarinda so that they could register their customarily owned forest area as village forest (hutan desa, or HD), which is a legal title recognised by the Ministry of Forestry in 2008. 9 The HD programme was set up with the aim of strengthening Community-Based Forest Management (CBFM) in the Indonesian forest sector. If their forest area is approved as HD, the villagers could protect the area from company advancement and maintain it under their own management for 35 years. The NGO has assisted the villagers to conduct GPS mapping in order to prepare the necessary documents for application. However, the application by Village A to the HD programme has faced two major constraints. First, government policies that prioritise business interests over the progress of CBFM policies become the primary constraint. While they had started their application in 2010, the Ministry of Forestry had in 2011 issued to a pulp and paper company a business licence for an area that overlapped with Village A s proposed HD site. By government regulation, those areas to which private companies have received business licences are not eligible for HD. The villagers of Village A argued that the government approval of the business licence was not valid, because the villagers had not agreed with the company operation. They sent a letter to the Ministry to request that the advancement of the company on the village be rejected, but the outcome was not clear because cancellation of business licences is known to be difficult. Second, as local populations in the villages located in the Sub-District of Busang have become increasingly aware of the potential values of local natural resources, territorial interests among communities have been politicised. The neighbouring villages felt that the formalisation of the border as a result of Village A s registration of HD would jeopardise their land rights. The six villages located in the Sub- District of Busang do not have documented borders separating them, because they had felt that using natural landmarks such as mountains 18