36557 ino tacr appendixvi

APPENDIX VI

SOCIO-ECONOMIC ASSESSMENT OF SIAK HULU CLUSTER PROJECT

GOLDER ASSOCIATES PT Geotechnical and Environmental Services Indonesia 10 th Floor Graha Paramita Jl Denpasar Blok D-2 Kuningan Jakarta 12940 Tel (62 21) 252 1975 (hunting) Fax (62 21) 252 1915 Email [email protected], [email protected]

DRAFT

SOCIO-ECONOMIC ASSESSMENT REPORT

TECHNICAL ASSISTANCE FOR THE GAS GENERATION FROM WASTE

ADB TA 4333-INO COC 05 342

Submitted to:

Asian Development Bank 6 ADB Avenue

Mandaluyong City 1550 Metro Manila

Phillippines

DISTRIBUTION: 1 Copies - Asian Development Bank 2 Copies - Golder Associates Ltd. March, 2006 05635033

TABLE OF CONTENT

1. Objectives .............................................................................................................................- 1 -

2. Deliverable Outputs ..............................................................................................................- 1 -

3. Methodology.........................................................................................................................- 1 -

4. Profile of project location .....................................................................................................- 2 -

5. Findings ................................................................................................................................- 3 -

5.1 Poverty profile of primary project beneficiaries.......................................................- 3 -

5.1.1 National.........................................................................................................- 3 -

5.1.2 Riau Province................................................................................................- 4 -

5.1.3 Kampar District.............................................................................................- 5 -

5.2 Population condition.................................................................................................- 6 -

5.3 Labor / work force condition ....................................................................................- 7 -

5.4 Economic condition ..................................................................................................- 7 -

5.5 Clean and renewable energy .....................................................................................- 7 -

5.6 Source of lighting in the surroundings of the power-plant .......................................- 7 -

5.7 Gender issues ............................................................................................................- 8 -

5.8 Indigenous people .....................................................................................................- 8 -

5.9 Perception toward the biomass power-plant project plan.........................................- 8 -

6. Socio-economic potential impact assessment.......................................................................- 8 -

6.1 Working opportunities ..............................................................................................- 9 -

6.2 Local businesses opportunity....................................................................................- 9 -

6.3 Gender participation ...............................................................................................- 10 -

6.4 Clean and renewable energy ...................................................................................- 10 -

6.5 Reduced costs of energy .........................................................................................- 10 -

6.6 Penetration of energy in rural areas ........................................................................- 11 -

6.7 Indigenous people ...................................................................................................- 11 -

6.8 Willingness to pay ..................................................................................................- 11 -

6.9 Economic spin-off...................................................................................................- 12 -

6.10 Poverty eradication .................................................................................................- 12 -

7. Conclusion ..........................................................................................................................- 13 -

8. Recommendation ................................................................................................................- 13 -

LISTS OF TABLE

Table 5.1-1 Total and Percentage of Poor-Population / Poor-Households Year at Riau Province, year 2004............................................................................................... - 5 -

Table 5.1-2 Total and Percentage of Poor-Population / Poor-Households Year at Kampar District, year 2004...............................................................................................- 6 -

Table 5.2-1 Kampar district population in year 2001 ..........................................................- 6 -

Table 5.3-1 Percentage of population 10 years of age and over of Kampar district and type of activity during the previous week ..................................................................- 7 -

Table 5.9-1 Potential socio-economic impact matrix ...........................................................- 9 -

LISTS OF FIGURE

Figure 5.1-1 Map of Kampar District .............................................................................- 2 -

Figure 5.1-2 Location of future Biomass Power Plant at Siak Hulu sub-district ..........................- 2 -

Figure 5.1-3 Location of Bio-diesel Plant, where the Biomass power plant will be established .........- 3 -

Figure 5.1-1 Distribution of Poor-Population and Budget Allocated for productive economic program, nationally ...............................................................................................- 3 -

Figure 6.2-1 Traditional shop / “Warong” .......................................................................- 9 -

Figure 6.9-1 Causal effect diagram .............................................................................. - 12 -

APPENDICES Appendix 1 Field trip report (Riau Province)

Appendix 2 Field trip report (West Kalimantan Province)

Appendix 3 Minutes of meeting with CFCD-Riau Chapter

March 2006 05635033 Socio-economic Assessment

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1. Objectives 1. Prepare a socioeconomic and poverty profile of primary project beneficiaries in the target

provinces, including poverty status and causes of poverty and vulnerability.

2. Liaise with community-managed POMs in the cluster area, establish their perception of the project and technology, and identify energy requirements and demand. Where relevant, identify how biomass power plant can benefit these communities and increase the project’s acceptability.

3. Identify direct and indirect indicators that can be monitored and link the project intervention with poverty reduction.

2. Deliverable Outputs 1. Prepare a socioeconomic and poverty profile of primary project beneficiaries in the target

provinces, including poverty status and causes of poverty and vulnerability.

2. Socio-economic assessment report of the project and technology, which will include the identification of energy requirements and demand. Where relevant, identify how biomass power plant can benefit these communities and increase the project’s acceptability.

3. Identify direct and indirect indicators that can be monitored and link the project intervention with poverty reduction.

3. Methodology In general, there will be some methodology to be used to collect some information, such as:

o Desk study, which will consist of:

• especially for collecting a secondary data, such as the latest and updated BPS’s statistics, relevant to the assessment

• relevant and related study in the area of poverty, socio-economics, socio-culture, and public health culture, plus

• relevant and related literature, and papers if available

o Field observation which will use mostly based on professional competency and experience analysis to integrate the three data collection methodology, as mentioned above

o General interviews which will use a semi-structured questionnaires.


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4. Profile of project location The intended project will be located at Kabupaten Kampar, under Riau province.

Figure 5.1-1 Map of Kampar District

Figure 5.1-2 Location of future Biomass Power Plant at Siak Hulu sub-district


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Figure 5.1-3 Location of Bio-diesel Plant, where the Biomass power plant will be established

5. Findings 5.1 Poverty profile of primary project beneficiaries

5.1.1 National Figure 5.1-1 Distribution of Poor-Population and Budget Allocated for productive economic program, nationally

Source: Komite Nasional Penanggulangan Kemiskinan website


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Based on the National Committee for the Poverty Eradication, Riau Province has a lower level of poor-households compared to other provinces in Indonesia. Also, the distribution of wealth over the population is more equal in general.

Riau provincial government also got several development programs, especially from national government. These programs address poverty eradication, such as the Kecamatan Development Fund (KDF) program.

5.1.2 Riau Province In the year 2004, Riau provincial government through the Badan Penelitian dan Pengembangan Propinsi Riau (Provincial Development and Research Agency) has established a documentation of the poor households and inhabitants for the Riau province.

First of all, the Agency selected households to be visited based on 4 (four) criteria, as follow:

1. Have received / are now receiving food aid (beras miskin / rice for the poor) or other type of aid in the last three years.

2. The condition of the house and its surroundings.

3. The floor area is less than 20 square meters.

4. Perceived to be poor by the researchers.

For each condition matched with the criteria, they received a tick on their list. Households with 4 (four) ticks were the priority of the Agency to be visited.

During the visit, the Agency used 8 criteria of poor households. These criteria were the same with the ones used by the Statistical Bureau (Biro Pusat Statistik, abbreviated BPS), as follow:

1. Frequency of meals a minimum of two times a day.

2. Protein content of the food consumption.

3. The choice to have different clothes for different occasions.

4. The ownership of assets.

5. Floor area per-capita.

6. The type of floor.

7. Access to of clean water.

8. Septic tank ownership.

Based on these criteria, a household is considered as poor if it doesn’t have at least 4 (four) of the criteria. However, a cross-check was conducted on households that do not have 3 (three) of the criteria, using questions as follow:

1. From the three criteria missing from a household, is one of them the meal criterion? If yes, this household is considered as poor.

2. If the answer is no, than the cross-check is done on the housing facilities, using criteria as follow:

a. The type of roof: if the house is traditionally roofed (using leaves, sugar palm fiber, etc.), this household is considered as poor.

b. The type of wall: if the wall is from bamboo, it is considered directly as poor. If it is a wooden wall, it depends from the condition of the wall.

c. The type of floor: for houses with non soil floor but with a bad condition, they are considered as poor.


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d. The type of lighting source: if the lighting source is non electrical, the household is considered as poor.

In general, the spread of the poor-households and inhabitants is relatively even, Only Pekanbaru City knows a percentage of poor households below 15%, where the percentage of their poor inhabitants are 10.91. However, Indra Hulu district, Indragiri Hilir, and Kuantan Senggigi need more attention for the percentage of their poor inhabitants is relatively high. Please refer to the table below for detailed information.

Table 5.1-1 Total and Percentage of Poor-Population / Poor-Households Year at Riau Province, year 2004

5.1.3 Kampar District The area of Kampar district is approximately 10,983.46 km2. There are 20 definite sub-districts (Kecamatan) and eight prepared / planned – sub-districts. Based on data from the Central Berau of Statistics (BPS) in last 2003, the total population is 525.113 inhabitants. In the year 2004, the population increased to 544.543 inhabitants, and in the mid-year 2005 increase into 550,896 inhabitants.

In general, poor inhabitants mostly live in the isolated areas, where there is lack of infrastructural support. In Kampar district, according to the data of the Local Development and Planning Agency (BAPPEDA) of Riau Province, the poor-inhabitants are spread over some sub-districts, such as Kampar Kiri Hilir, Kampar Kiri Hulu, Kecamatan XIII Koto Kampar, and Kampar Kiri.

In Kampar district, the level of economic growth in the last two years is 3.70% and the average population density is 50 inhabitants per-kilometer square. Most of the inhabitants are working in the agribusiness sector. In the year 2003, 60.65% of inhabitants are work in the agribusiness sector, 2.81% in the processed industry sector, 8.36% in the trading sector, 2.09% in transportation sector, and 12.65% of the inhabitants work in another sector.


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Table 5.1-2 Total and Percentage of Poor-Population / Poor-Households Year at Kampar District, year 2004

As for the poverty issues, Kampar district has a similar distribution pattern as Riau Province. The spread of the poor households and inhabitants is relatively even, with the exception of some sub-districts where the poor population percentages are above 35%. These are Kampar Kiri Hulu sub-district (66.18%), XIII Koto Kampar sub-district (51.85%), and Kampar Kiri Hilir sub-district (38.89%).

5.2 Population condition Based on the statistical data from BPS in the year 2001, the population of Kampar district is as follow:

Table 5.2-1 Kampar district population in year 2001

Sub-district Total Area (km2) Density Bangkinang 56.030 253,81 220

Bangkinang Barat 27.250 520,99 52 Kampar 82.878 402,23 206 Kampar Kiri 888 45,90 19 Kampar Kiri Hilir 8.216 439,45 18 Kampar Kiri Hulu 9.970 800,00 12 Siak Hulu 50.323 1.242,97 40 Tambang 30.028 572,70 52 Tapung 42.331 392,23 107 Tapung Hilir 32.332 403,51 80 Tapung Hulu 26.765 765,38 34 Tapung Kiri 17.851 724,18 24 XIII Koto Kampar 1.752 27,71 63

The largest population is located in the Kampar sub-district. The lowest population is located in Kampar Kiri with also the third lowest population density. In Siak Hulu, where the biomass power plant will be located, has the largest area and medium population density.


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5.3 Labor / work force condition Table 5.3-1 Percentage of population 10 years of age and over of Kampar district and type of activity during the previous week

Based on the statistical data from BPS in the year 2003 for the Kampar district, still 4.38% of the economically active population is looking for new job. This is derived as follow: 8.08% for female and 2.67% of male inhabitants.

5.4 Economic condition Based on the Riau’s BPS figures, the Kampar district is achieving 5.45% of economic growth. This means that the level has decrease in comparison with last year’s performance. This number is also below the projection rate in the Rencana Strategis Daerah (Renstrada) / Local Strategic Plan.

5.5 Clean and renewable energy The biomass technology for electrical power generation has been in service in the POM for some time. However, in the current technologies not much thought has been given to energy efficiency as they serve a duel function energy production and solid waste reduction technology. The design originates from a typical steam power plant where the main motive driver is steam generation for processing by the boiler. The energy of the steam is also used in steam turbo alternators to generate electrical energy. The proposed biomass power plant will have an increased efficiency to maximize energy production from the biomass fuel

5.6 Source of lighting in the surroundings of the power-plant According to data collected from Data collection of Poor-Inhabitants/Households, Riau Province 2004:

• 9.43 % of the poor households are using PLN as their source of electricity for lighting

• 71.06% of the poor households are using candles / flash-light as their source of electricity for lighting

• Approximately 10% of the poor-households are using Non-PLN as their source of electricity for lighting

• Approximately 5% of the poor-households are using kerosene pressure lantern as their source of electricity for lighting

Local communities nearby to the power plant location are Hang Tuah Village (comprises of 1,160 households) and Sialang Kubang Village (comprises 800 to 900 households). Those villages are administratively located within Siak Hulu Sub-District, Kampar District. Hundred percent of these two villages are electrified, served by PLN since 1998. The average connected capacity is 900 Watt per house, only some houses with 1,300 Watt. They use this electricity for (particularly) lighting and other


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household apparatus (TV, refrigerator, ironing). 11 households are using electricity for their poultry farm. The average household expenditure for the electricity is Rp. 60,000,- per month.

Most of households in local communities use kerosene stoves for cooking, some of them (about 100 households) use LPG, while no more than 1% else firewood. Average kerosene consumption per household (family with 3 children) is 25-30 liters per month with the price (for this time being) Rp. 1,200,- (subsidized price) or Rp. 1,700-2,000,- per liter (market price).

5.7 Gender issues The initial assessment of the area indicated that men are predominantly involved in the major economic activities while the women are mainly in control of domestic management. This situation is not expected to change with the introduction of the biomass power plant. The employment opportunities for the female employees in the biomass power plant will be limited to the administrative section and non-critical positions such as laboratories and general upkeep.

5.8 Indigenous people In Kampar district, based on the field visit and interviews with local people, the indigenous people who live within the area are relatively small. Exact data are not available.

5.9 Perception toward the biomass power-plant project plan Based on the field visit and survey in the Kampar district, below recorded some responses and perception, towards the power-plant project from local stakeholders. A statement from Hang Tuah village government was as follows: “I think that is better if we can use the POM waste for energy source or others. In general, it will be a benefit to the local community, what we used to throw out as waste, we can use it in the future” said Hang Tuah’s Village Head.

A similar response from the Lubuk Agung village: “I think this is good. But people will compare it with the existing PLN. If the new energy is cheaper than the existing one, of course they will accept it” said Lubuk Agung’s Village Head and this was affirmed by the Village Secretary. Due to the fact that some of empty fruit bunch (EFB) is distributed free from the plant to local people, they also comment there will be no problems if the EFB are used in energy generation.

The local Petapahan village people perception towards the project (the idea to convert POM waste to energy) is positive. The statement of the Head of Government Section of Petapahan Village on this subject was: “I think that is good. We agree on this idea as far as it produces benefits to the local people, working opportunities for example, and cheaper fuel compared to the existing kerosene price.”

6. Socio-economic potential impact assessment Based on the findings above, there are several socio-economic potential impacts identified and assessed. The socio-economic potential impacts are divided by 7 (seven) components: (1) working opportunities, (2) business opportunities, (3) gender participations, (4) clean and renewable energy, (5) reduce cost of energy, (6) penetration of energy use in rural areas, (7) indigenous people. The description and analyses of these seven components will be explained after table 5.9-1.

Additional components will be added to enhance the analyses of the socio-economic potential impact assessment. The additional components are: (8) willingness to pay, (9) economic spin-off and (10) poverty eradication.


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Table 5.9-1 Potential socio-economic impact matrix

6.1 Working opportunities When the biomass power plant is constructed, it will need a lot of local laborers. There is still adequate availability of non-skilled and skilled laborers in the Kampar district.

The biomass power plant project will create new direct and permanent employment to operate and maintain the biomass power plant. The projection of local people needed to be employed by the biomass power plant is approximately 50 will be created.

The operation of the power plant will create the need for biomass delivery services. The delivery services will transfer about 100,000 tons of material a year. This will create several employment opportunities in the immediate locality. Besides the transportation of biomass fuel, it is expected that other forms of biomass supply chain.

Raw material strategy is as follow:

• Supply of empty fruit bunch (EFB) will come from several palm oil mills (POMs) surrounding siak-hulu cluster, Kampar district.

• The dewatered EFB intended for the incinerator in the POMs will be sent to central biomass power plant that can efficiently convert the energy from the biomass into heat and power.

6.2 Local businesses opportunity Figure 6.2-1 Traditional shop / “Warong”

One of the advantages that can be received by local inhabitants is the opportunity of local businesses to support the construction of the biomass power plant.

Starting from the construction phase; the local business can support the major contractor of biomass power plant in mobilizing their resources, such as car rental, housing, laundry, and catering.

Then when the biomass power plant is operating, the local businesses can provide supports to the plant such as


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catering, repair and maintenance of the machine.

Other indirect impact is the trend of corporate social responsibility (CSR) initiatives among big and major companies. Around the future location of the biomass power plant, there are two big companies, they are: Chevron Pacific Indonesia (used to be Caltex), an America oil company, and Riau Andalan Pulp and Paper (RAPP), an International pulp and paper company. Both of them have a large footprint within their businesses operation. They definitely need the electricity to support their business and supporting businesses, such as employee housing.

6.3 Gender participation Women Participation in this project can start from the construction phase, post construction or when the power plant operates, and when additional supply chains of biomass power plant are developed.

At the construction and the operational phase, women can participate in some areas, such as:

• Conducting a catering business to construction laborers

• Serving the cleaning services for the uniform, wet or dry clean

• Establishing small warongs surroundings the construction area and power plant area

• Being a supporting staff at the construction company and biomass power plant.

6.4 Clean and renewable energy The availability of clean energy to the rural community will enhance their living standard and generate other related benefits and economic activities that require the consistent availability of electrical energy.

However, there also several things that must be done before the biomass power plant is established:

• First, the biomass power plant operator must educate the local people on what the clean and renewable energy is

• Second, together with local stakeholders, the operator must educate the local people on the importance and appropriateness of using this technology.

If these things are not done first, the operator will face difficulties in changing the behaviour of local people, from traditional sources of electricity into source of electricity from PLN, supplied by biomass power plant.

6.5 Reduced costs of energy Based on our field survey, we found three types of electricity supply in Riau Province, which are:

1. Pembangkit Listrik Nasional (PLN); The households expenditure is approximately Rp. 60.000 per month

2. Kerosene; The households expenditure is approximately from Rp. 100.000 to – Rp. 150.000 per month

3. Self-reliance (swadaya), using diesel; The households expenditure is approximately from Rp. 200.000 to – Rp. 250.000 per month

From our calculation, the projected selling price for electricity supplied by PLN from biomass power-plant to the households will be in the range Rp. 100,000 – Rp. 250.000 per month.

The positive impact of cost saving will be received by the households when the biomass power plant is established. It will be better that prior to and during the construction, a series of public consultations and


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dissemination are conducted by the operator of biomass power plant, for explaining the benefits of the existences of the biomass power plant.

Involving proactively lower level of the tier of government, village government, and other relevant local stakeholder will enhance the clarity and the spread of communication efforts.

6.6 Penetration of energy in rural areas Based on the BPS data, there are two important issues that must be addressed immediately by local government. These are:

1. One of the major poverty causes is the lack of infrastructural support at the rural areas that are also areas where poverty exists the most. The Source of lighting is also one of the infrastructural supports that should be developed by local government, immediately.

2. Most of the rural inhabitants or households are using kerosene pressure lanterns as their source of lighting.

The biomass power plant will enhance the penetration of energy availability in rural areas. The potential impact of the penetration will only be received by the local inhabitants after the transmission of electricity through the PLN grid is realized.

6.7 Indigenous people The biomass power plant is proposed to be located in the vicinity of developed areas to facilitate evaluation of power. Hence, the impacts or benefits of the power plant to the indigenous people are limited.

6.8 Willingness to pay According to our interviews with some of the local inhabitants, they would be willing to shift kerosene, candle, and flash-light to electricity from biomass power plant if the costs are cheaper than the costs of other sources of electricity, at least, 30% less. The team projects that the selling price in the first three years will be slightly different with kerosene, candle, and flash-light, probably only 10% less. It happens because the cost of early technology development is quite high.

However, learning from Malaysian best practices, approximately three years after the establishment of biomass power plant, people will have a better understanding on this new energy source and use it more, then, the price will decrease, because of several reasons. Some of them are:

• Reduced cost of technology development

• The national and local government support the development of biomass power plant, through their policy and regulation

• Competition among other source of electricity, beside biomass

• Several biomass power plants will be developed and create a competitive business environment among them. The consequence will be that they will start to sell the energy more efficient than others.


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6.9 Economic spin-off Figure 6.9-1 Causal effect diagram

As explained in the text above, the existence of biomass power plant will develop a potential and substantial economic development in the surrounding areas.

Figure 6.9-1 shows that the low income can affect the literacy level to be low, the level of health will also become low, and then the environmental condition will also be low. This condition is happened because people have lack of opportunity and supporting programs from the local major stakeholders, such as local government and local companies or private sectors, due to the lack of capacity of civil society organization and traditional institutions. The lack of support from local stakeholder is caused by the lack of access to rural electrification and better access to information, especially for renewable energy.

Wider opportunities or access to rural electrification using the appropriate renewable energy can enhance and increase the opportunity for the local stakeholder to have a better information and arrangements on how to develop the appropriates local development program to increase their income, and have a better education, health, and clean and friendly environment for them.

6.10 Poverty eradication For Kampar district, there are two interesting phenomena related to the poverty and income per-capita:

• The trend of income per-capita of Kampar district inhabitants is increasing. Based on the BPS data, the income per-capita in 2003 was Rp. 3.5 million. This number increased in 2004 to Rp. 3.8 million.

• In the meantime, the number of poor inhabitants is still high. From BPS data, in the year 2005, from 550,896 inhabitants of Kampar district, approximately 20.50% of the inhabitants is poor.

We can see from this phenomenon that the distribution of income is not well-spread in Riau province, in general, and in Kampar district, especially. The cause of these phenomena might due to the big gap of education level and lack of infrastructure access, especially in rural areas.

Compared to the number of poor inhabitants at the national level, the poverty issue at Riau province and especially in Kampar district is not too significant. In 2005, approximately 30% of Indonesians are poor. However, the Government of Indonesia’s target to eradicate poverty, in the year 2009, will be 9%. It looks like an ambitious target, but still, Riau provincial government and Kampar district government must take this information into their development plan consideration.


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7. Conclusion By establishing and investing the biomass power plant, the development of local economy can be accelerated and the poverty eradication can be done simultaneously, especially through larger opportunity to access adequate information, such as market information, education, appropriate technology, gender mainstreaming, agribusiness development, and knowledge.

Although poverty is not a substantial issue for Riau province and Kampar district, both Riau and Kampar government must synchronize their development plans with Government of Indonesia (GoI) development plans, especially in decreasing poverty level into 9% in the year 2005.

Nowadays, Riau provincial government has been assisted by GoI in setting-up a provincial committee for poverty eradication, in the last couple of years. The provincial committee secretariat is under Badan Perlindungan dan Pemberdayaan Masyarakat (Community Development and Protection Agency) and namely Sekretariat Komite Penanggulangan Kemiskinan (KPK) Propinsi Riau. The provincial committee has also collaborated and worked hand-in-hand with corporate forum for community development (CFCD), Riau chapter, to alleviate poverty. CFCD is the forum that was established in the year 2003 that consists of major companies. This forum has big concerns to poverty and conducts CSR initiatives within their company. Through the forum, the provincial committee has successfully mobilized company to eradicate poverty. Engaging broader stakeholder can make the biomass power plant project, sustainable.

8. Recommendation There are some recommendations to proactively respond this socio-economic assessment report:

1. Biomass power plant must be well-communicated and understandable by the local stakeholders (local government, local community, and local companies). The entry point to communicate is through engaging provincial poverty eradication committee, as a strategic partner. They are neutral and one of the most suitable, relevance, legitimate, legal, and strong local institutions to begin with

2. Parallel with the biomass power plant construction, their stakeholders, especially CFCD, Riau chapter, must be invited to see and learn more on the biomass power plant process. If necessary, they could become integral stakeholders of this clean energy development

3. In the mid-term, one or some of the CFCD members can pilot the biomass power plant surrounding their operational site, to support their business and livelihoods.

a. Social investment through biomass power plant can mitigate their social risks, significantly,

b. Endorse a national and international sustainable development principle, where the business should economically sustainable, environmentally sustainable, and socially responsible,

c. Engage with broader local, regional, national, and international institution will enhance their credibility, and

d. Manage and increase their positive company reputation.

4. Meanwhile, it will be better for Riau provincial government and Kampar district government to work hand-in-hand in polishing their policy and regulation to support the development of biomass power plant.

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Appendix 1

Field trip report at Riau Province

Riau Site Visit, August 29 to September 2, 2005 Note on Social Aspect

By Ono Sutarno Introduction

The objective of this site visit is to probe POM’s possibility to use their waste to generate energy. This social aspect note is focused on the existing pattern of energy use in the adjacent communities to POMs and their perception towards the project. This site visit was conducted on August 29 to September 2, 2005, and it covered PT. Perkebunan Nusantara V Sei Pagar, PT. Sinar Siak Dian Permai, and PT. Pramajaya Pramukti.

PT. Perkebunan Nusantara V Sei Pagar

The closest community to this POM is a housing area of the Plant employees. This settlement comprises 170 households (house units). They are served with the electricity from the Plant with the total of 150 KVA. The second closest community to this POM are housing areas (four units: afdeling I, II, III and IV) of plantation (nucleus) employees. These settlements comprise approximately 460 households (house units). They are partly (afdeling I) served by the electricity from PLN (Electricity State Owned Company). Other afdelings (afdeling II, III and IV) are served by electricity from the generator set (one unit).

The local communities located adjacent to this POM are Hang Tuah Village (comprises 1,160 households) and Sialang Kubang Village (comprises from 800 to 900 households). Those villages – in this case -- are plasmas and administratively located at Siak Hulu Sub-District, Kampar Regency. These two villages are already fully electrified, served by PLN since 1998. The average connection capacity is 900 Watt per house, only some houses with 1.300 Watt. They use this electricity particularly for lighting and other household apparatus (TV, refrigerator, iron, etc.). Approximately 11 households also use the electricity for their poultry farms. The average household expenditure for the electricity is Rp. 60.000,- per month.

Most of the households in these local communities use kerosene stove for cooking activities; some of them (approximately 100 households) use LPG, while less than 1% use firewood. The average kerosene consumption per household (one family with 3 children) is 25-30 liters per month with the price (currently) of Rp. 1.200,- per liter (subsidized price) or Rp. 1.700-2.000,- per liter (market price).

Local people’s perception towards this project (the idea to convert POM waste to energy) is positive. The following is Hang Tuah Village Head’s statement on this subject: “I think it is better if we can use the POM waste for energy source or others. In general, it will be a benefit for local community, what we used to throw out as garbage; we can use it in the future.”

PT. Sinar Siak Dian Permai

The closest community to this POM is staff housing, comprises only 42 houses. This staff housing is served with electricity from the Plant.

The local community located adjacent to this POM is the Sekijang Village (Sub-District of Pangkalan Kerinci, Pelalawan Regency). This village will be developed into another four villages (Beringin, Muda Setia, Lubuk Agung, and Kiyap). Most of the houses are located along the main road (Km 25 to Km 39). 80% of the households in this village are served by the electricity from PLN (these are the houses located along the main road), while 20% of them are not (Dusun Mekarsari, comprise approximately 300 households). The average connection capacity is 900 Watt, only some houses are connected with a capacity of 1.200 Watt and 2.200 Watt. The average household expenditure for electricity is Rp. 150.000-200.000,- per month (many people use electricity for magic jar, refrigerator, washing machine, iron, beside TV and lighting). Some households also use electricity for their poultry farms.

Dusun Mekarsari is located 3 Km from the main road and the houses are spread 8 Km along the road. This dusun has requested to have electricity connection to PLN for many times but there is no respond so far. Thus they serve themselves with generators (operated at night, up to 12 pm only), each unit for 5-7 houses/families. There are more than 40 units of generator (with average capacity of 3.000 Watt per unit) operated in this dusun. The average diesel consumption is 4 liters per night per unit of generator (the diesel price is Rp 2.500,- per liter).

Around 50% of the households in Sekijang Village use kerosene stove for cooking activities, 30% of them use LPG, while the rest (20%) use firewood. However, usually they have kerosene stove, LPG, and firewood stove. The reason is, for cooking rice for example, they prefer to use firewood due to a better taste of rice.

The average kerosene consumption (when using only kerosene stove) per household (one family with 3 children) is 20-25 liters per month with the price (currently) of Rp. 1.400,- per liter (subsidized price) or Rp 2.000,- per liter (market price). Meanwhile, the LPG consumption (when using only LPG) is one bottle per month (12 kg net, with the price of Rp. 54.000,- per bottle). The firewood is free; they collect it from their garden or secondary forest (usually, the women/housewives are those who do it).

PT. Sinar Siak Dian Permai is very keen to convert POM waste into energy. “However, we prefer to produce electricity than diesel”, Pak Zulham Harahap said. The reason is because they need electricity for their own need (even only 1,3 Mega Watt), while the rest might be sold to local people. Meanwhile, if they produce diesel, they have no idea how to market it, and they have to compete with Pertamina.

Local people’s perception towards this project (the idea to convert POM waste to energy) is positive. The following is Lubuk Agung Village Head and Village Secretary’s statement on this subject: “I think it is a good idea. However, people will compare it with the existing PLN. If the new energy is cheaper than the existing one, of course they will accept it.” Due to the fact that some of the EFBs are distributed freely from the Plant to local people, they also comment that there is no problem if the EFBs will be used in energy generation.

PT. Ramajaya Pramukti

Administratively, PT. Ramajaya Pramukti is located at Petapahan Village, Tapung Sub District, Kampar Regency. The closest community to this POM is a housing area of Plant employees (1 Km of distance). This settlement comprises 225 households (200 houses). Nowadays, this settlement is served by the electricity from the Plant with the total of 180 KVA, and next month (in October) it will be served by PLN. The second closest community to this POM is the housing areas of plantation (nucleus) employees (three units: emplacement: 12 Km of distance; Division 3: 1,5 Km of distance; and Rama Kiri: 7 Km of distance). These settlements comprise totally 417 households and served by the electricity from generators. As it is for the housing area of the Plant employees, these settlements will be served by the electricity from PLN next month. The existing grid built by PT. Ramajaya will be handed over to PLN.

The local communities located adjacent to this POM are Petapahan Village (less than 1 Km) and Sibuak Village (14 Km). Petapahan is a local village, while Sibuak is an ex-transmigration unit.

The Petapahan Village comprises 2.054 household, around 80% is electrified, served by PLN since 1999. The average connection capacity is 900 Watt; the lowest capacity is 450 Watt; while some households are connected with 1.200 and 2.200 Watt. The average household expenditure for electricity is Rp. 100.000,- per month.

Around 20% of the households in Petapahan use kerosene stove for cooking activities, 20% of them use LPG, while the rest (60%) use firewood. There is an interesting phenomenon here: people tend to replace firewood directly to LPG. Many people have used LPG for cooking activities since 2000.

The average kerosene consumption per household (one family with 2-3 children) is 20 liters per month with the price (currently) of Rp 2.700,- per liter (market price). Meanwhile, the average LPG consumption is one bottle per month (12 kg net, with the price of Rp. 60.000,- per bottle). The firewood is free; they collect it from their garden or secondary forest, both wives and husbands do it.

Local people’s perception towards this project (the idea to convert POM waste to energy) is positive. The following is Head of Government Section of Petapahan Village’s statement on this subject: “I think it is a good idea. However, I heard that there is no more bio diesel in the POM waste, according to the result of an examination by a team from Japan. However, we agree with this idea as far as it produces benefits to local people, working opportunity for example, and cheaper fuel compared to the existing kerosene price. ”

The Sibuak Village comprises 447 households, 100% are electrified, served by PLN (340 households are officially connected; others are connected through their neighbors). The connection capacities are 450 Watt and 900 Watt, with the average of 450 Watt. The average household expenditure for electricity is Rp. 60.000,- per month for the connection capacity of 450 Watt and Rp. 150.000,- per month for the connection capacity of 900 Watt. They use electricity particularly for lighting and other household apparatus (TV, refrigerator, iron, etc.). Approximately 6 households also use electricity for their furniture industries.

Around 70% of the households in Sibuak use kerosene stove for cooking activities, some households use LPG, while others use firewood. The average kerosene consumption per household (one family with 3 children) is 20 liters per month with the price (currently) of Rp. 1.800,- per liter (subsidized) or Rp 2.500,- per liter (market price). The firewood is free; they collect it from their garden or secondary forest, or from palm stems. Different from other villages, those are the husbands who do it.

Local people’s perception towards this project (the idea to convert POM waste to energy) is positive. The following is Village Head of Sibuak’s statement on this subject: “I think that is a good idea as far as local people are well informed with the technology and its benefit. More over, the existing electricity is not stable. ”

Appendix 2

Field trip report at West Kalimantan

Province

West Kalimantan Site Visit, September 5 to 9, 2005 Note on Social Aspect

By Ono Sutarno Introduction

The objective of this site visit is to probe POM’s possibility to use their waste to generate energy. This social aspect note is focused on the existing pattern of energy use in the adjacent communities to POMs and their perception towards the project. This site visit was conducted on September 5 to 9, 2005, and it covered PT. Perkebunan Nusantara XIII Gunung Meliau and PT. MAS (Mitra Austral Sejahtera). The site visit to PT. Kalimantan Sanggar Perkasa was dropped due to the lack of information, while I did not involve in the site visit to PT. Multi Prima Entakai (the team was split).

PT. Perkebunan Nusantara XIII Gunung Meliau

The closest community to this POM is a housing area of Plant employees. This settlement comprises 230 households (house units). They are served by the electricity from the Plant. They use electricity (beside for lighting) for household apparatus (TV, refrigerator, iron, rice cooker, hair dryer, etc.), in line with the change of their life style. This change of life style was not anticipated by the Plant Manager, so they provide (additionally) later two units of generator (capacity of 500 KVA and 400 KVA). The second closest community to this POM is housing areas of plantation (nucleus) employees, spread into 8 units of settlement. These settlements comprise approximately 1,200 households. They are partly served by the electricity from PLN (Electricity State Owned Company) and partly by the local generator.

The local communities located adjacent to this POM are Meliau Hilir (1.700 households), Meliau Hulu (806 households), Sungai Mayang (560 households), Melobok (706 households) and Kuala Bayan (1.161 households) villages. These villages are electrified, served by PLN since 1990’s, with approximately 50% of coverage. The average connection capacity is 450 Watt per house or 900 Watt split into 2-3 houses, some of them have a connection of 900 Watt. They use electricity particularly for lighting and other household apparatus (TV, refrigerator, iron, rice cooker, etc.). Some households use electricity for welding and furniture industries. The average household expenditure for the electricity is Rp. 20.000,- per month. Basically, the electricity operates in 24 hours (supplied from Sanggau in the day, supplied from the local generator at night), but it is frequently turned off.

Around 50% of the households in local communities use kerosene stove for cooking activities while the rest use firewood, but in 2-3 years they will certainly change to kerosene due to firewood shortage (most land has been changed into plantation). The average kerosene consumption per household (one family with 3 children) is 20 liters per month with the price (currently) of Rp. 2.000,- per liter (market price).

Local people’s perception towards this project (the idea to convert POM waste to energy) is positive. The following is Head of Development Section of Meliau Sub District’s statement on this subject: “We support this idea due to the need of electricity.

As we know, only some villages in Meliau Sub District are served with electricity, the others are not. The second benefit will be to reduce environmental pollution. The third is, if we convert POM waste to energy, it also means work opportunity. We have people with S1 (bachelor) degree in civil engineering and economic, we have D2/3 in computer as well as graduates of Senior High School in Technique.”

PT. MAS (Mitra Austral Sejahtera)

The closest community to this POM is a Plant employees housing (91 employees), comprises only 20 rooms (existing), and will have 30 additional rooms. This housing is served with electricity from the Plant with capacity of 50-75 KVA. The second closest community is a plantation employees housing area. This housing is served with electricity from generator with a capacity of 125 KVA, operated 22 hours per day.

PT. MAS is keen to convert POM waste to energy. “We have turbine with enough capacity (300 KVA), and there is a huge demand from local community for electricity” Pak Hasri (Plant Manager) said.

There are approximately 11 kampoongs of two villages (Pandan Sembuat and Rahayu) located adjacent to MAS I plantation (nucleus), while 7 kampoongs of three villages (Kampuh, Upe and Tantang) are located adjacent to MAS II plantation (nucleus). Approximately 4 kampoongs adjacent to MAS I are electrified (PLN), while others are not. Meanwhile, three kampongs located adjacent to MAS II are electrified (PLN), and others are not.

Based on the interviews conducted in Kampung Muri (Rahayu Village) and Kampung Krunang (Kampuh Village), most households in these two kampoongs use firewood for cooking activities, only some households use kerosene. The average kerosene consumption per household (one family with 3 children; both for lighting and cooking) is 30 liters per month with the price of Rp 2.500,- per liter (market price). The firewood is free; they collect it from their garden or secondary forest (usually, the women/housewives are those who do it).

Local people perception’s towards this project (the idea to convert POM waste to energy) is positive. The following is the Adat Authority of Kampung Krunang’s statement on this subject: “As far as it produces benefit, we have to use it. I really agree with this idea.”

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