impacts of newly liberalised policies on customary land rights of forest-dwelling populations: a...

Impacts of newly liberalised policies on customaryland rights of forest-dwelling populations: A case

study from East Kalimantan, Indonesia

Mariko UranoDepartment of Economics, Hokusei Gakuen University, 2-3-1 Oyachi-Nishi Atsubetsu-ku, Sapporo 004-0042, Japan.

Email: [email protected]

Abstract: Based on interviews and participant observation conducted in the province of EastKalimantan, Indonesia, from 2008 to 2012, this paper examines why the agrarian reforms have failedto 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 localfarmers living in forest areas. I present a case study of two villages, in which the greater discretion onthe part of the local community to negotiate with large-scale oil palm estates has led to the abuse ofpower by local elites, as well as territorial tensions between local communities. The finding questionsthe optimistic view that state recognition of customary land rights of communities would automati-cally lead to the security of landownership of local farmers, and its underlying image of harmoniouslocal communities in which members share coherent interests. The agrarian reform that has centredon communities’ rights of control over land and natural resources is problematic. When localcommunities do not possess capabilities for resolving conflicts in an equitable and transparentmanner, 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 gov-ernment in 1998, Indonesia has seen limited,but growing government recognition of custom-ary land rights of local populations living inforest areas. As in many other developing coun-tries, rural populations in Indonesia customarilyown and use their land without formal legalprotection of the state. The legal insecurityof the populations has been the source ofmany land conflicts when outside investmentsadvance into the customarily owned areas forthe development of land and natural resources.

After the transition from the authoritarianregime in 1998, the rapid pace of exploitationof natural resources which took place underthe Suharto regime continued, and in somecases accelerated. Increasing investments in theprimary sectors have led to alienation of landfrom local farmers. Meanwhile, in the liberal-

ised policies toward customary land rights,local communities are given greater discretionto negotiate with resource development compa-nies. However, in some cases, the greater dis-cretion given to local communities has led tothe abuse of power by local elites, as well asterritorial conflicts among local communities.Why has the official recognition of customarylandownership often failed to provide forest-dwelling populations with the security ofcustomary landownership? What are the chal-lenges that local farmers face and must over-come in order to secure their customary landrights in the new land policies?

In order to examine the above questions, first,I will review the changes in Indonesian statepolicies about customary tenure. Although stilllimited, as the Indonesian government becamedemocratised, there has been gradual recogni-tion of the customary forms of landownership instate policies. Importantly, the state recognition

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Asia Pacific Viewpoint, Vol. 55, No. 1, April 2014ISSN 1360-7456, pp6–23

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of customary land rights has centred on ulayatrights, or communal rights of control over landand natural resources. Second, I will overviewthe growth of the oil palm industry in the Dis-trict of East Kutai, Province of East Kalimantan.Then, based on data that I gathered duringa series of field research trips, I will describechanges in local perceptions about the meaningof landownership among Dayak farmers againsta backdrop of the increasing advancement ofinvesting companies. Third, I will compare thecases of two neighbouring Dayak communitiesin the District of East Kutai: one accepted theadvancement of oil palm estates in their villagearea, while the other rejected such advance-ment and instead tried to take advantage of theopportunity of a state-sponsored Community-Based Forest Management programme to securelocal customary land rights. Although theresponses of the two communities to the oilpalm estates are different, both cases highlightthe problematic nature of the community-basedstate recognition of customary land tenure toempower local farmers by securing their landrights.

The data that I use in this paper werecollected through a series of interviews and par-ticipant observations conducted in the Sub-District (kecamatan) of Busang, of the District(kabupaten) of East Kutai, Province of EastKalimantan, from 2008 to 2012. The first timethat I conducted field research in the area wasan 18-month period from 1998 to 1999.1 I havevisited 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 inter-viewed the populations while engaging in par-ticipant observation.

Problems of customary tenure in Indonesia

Land reform in Indonesia and its problems

The fall of the authoritarian Suharto regimein 1998 has triggered a horde of tenurial claimsfrom local farmers who have long beendeprived of opportunities to express their con-cerns on their violated land-use and land-ownership rights. An important characteristic ofIndonesian agrarian legislation is that the rec-ognition of customary forms of land use andownership of farmers has been centred on cus-

tomary (adat) law communities, or often simplyabbreviated as customary communities, andtheir ulayat rights, communal rights of controlover land and natural resources. Customary lawcommunities are defined as those populationgroups that have resided in a certain geographi-cal area for generations based on their ancestralorigins, strong relations with the local environ-ment, and value systems regulating economic,political, social and legal institutions (LawNo.32 of 2009 on Environmental Protectionand Management, Chapter I Article 31). Ulayatrights of customary law communities are sup-posed to constrain individual land rights ofcommunity members (Harsono, 1997: 179–82).

The Indonesian Basic Agrarian Law of 1960recognises the ulayat rights of customary lawcommunities. However, the law gives ‘nationalinterests’ priority over the customary land rightsof local communities, and the Suharto govern-ment arbitrarily interpreted the law for the inter-ests of its own members and close allies (Barr,1998). Meanwhile, recognition of the rights ofcustomary communities was not supportedin laws related to the resources sector. Forexample, the Basic Forestry Law and BasicMining Law of 1967 did not respect the rights oflocal populations (Sirait, 2009: 22). The BasicForestry Law declared that all forest areasbelong to the state, and that the Ministry ofForestry held the authority to distribute rights ofexploitation to private companies. Under theextremely repressive Suharto regime, the localfarmers dared not protest even though theirland-use and landownership rights were fre-quently violated by the encroachment oflogging, mining and plantation development.

Since the fall of the Suharto regime in 1998,there has been gradual democratisation andgreater recognition of the land rights of cus-tomary communities in Indonesian politics.However, the degree to which those rights arerecognised has not been consistent and lawsand regulations are often found inconsistent andcontradictory.

The Basic Forestry Law of 1967 was replacedby the subsequent Law No.41 of 1999 on For-estry, which includes clauses stipulating thatthe rights of customary law communities overcustomary-owned forest are respected, but aslong as those rights do not conflict with stateinterests (Article 4.3).

The impacts of newly liberalised policies

© 2014 The Author. Asia Pacific Viewpoint published by Victoria University of Wellington andWiley Publishing Asia Pty Ltd

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Ministerial Regulation No.5 of 1999, issuedby the Minister of Agrarian Affairs/Head of theNational Land Agency, on Guidelines to Solvingthe Problem of Ulayat Rights of Customary LawCommunities, Law No.18 of 2004 on PlantationEstate, and Law No.26 of 2007 on Spatial Plan-ning include positive clauses that would lead togreater recognition of local land rights, but therecognition is limited by the discretion of thelocal government.

The Minister of Agrarian Affairs/Head of theNational Land Agency Regulation on Guide-lines to Solving the Problem of Ulayat Rightsof Customary Law Communities of 1999 givesinstructions for district level governments onhow to deal with claims of ulayat rights, orcommunal control over land, including con-ducting research and mapping of communalrights (Chapter III Articles 5 and 6). Under thisregulation, there are four district government-issued regulations that recognise the land rightsof customary communities.2 However, the pos-sibility that customary land rights will be recog-nised is seriously limited, because Chapter IIArticle 4 of the regulation states that customaryland rights are not recognised when the land isalready owned and used by a third party underpermission of the state authority (Bakker, 2008;Sirait, 2009: 22–23).

Law N18 of 2004 on Plantation Estatesrequires the applicant for the right to run aplantation estate to ‘conduct a discussion withthe customary law communities holding cus-tomary right upon the land in order to obtain anagreement on the utilisation of the land and afee for that utilisation; (Chapter III Article 9.2,translated in Sirait, 2009: 24). But the GeneralExplanation of the Law (Article 9.2) limits theconditions by which local populations arelegitimately recognised as customary law com-munities. The rights of customary law commu-nities are recognised only if they are able toobtain recognition from the district governmentin the form of a district regulation. Law No.26of 2007 on Spatial Planning also provides thatthe participation and land rights of customarycommunities are respected in the process ofspatial planning (Chapter IV Article 7.3 andits Explanation; Sirait, 2009: 24–5). But giventhe contradictory restrictions in the other laws,the rights of customary communities remainunclear and weak.

At the level of the national parliament, thePeople’s Consultative Council Resolution No.IX on Agrarian Reform and Management ofNatural Resources was passed in 2001. Thedecree states that the People’s ConsultativeCouncil is mandated to resolve the problemsof poverty, inequality and the destruction ofnatural resources. According to Article 5 (j),agrarian reform and management of naturalresources should be in accordance with theprinciples that ‘recognize, respect and pro-tect the rights of adat law communities, andculturally diverse manners of agrarian/naturalresource management’ (translated in Lucas andWarren, 2003: 113). Many NGOs welcomedthe move of the parliament, but the decree’srecognition of the land rights of customary com-munities contradicts the emphasis it places onthe role of natural resources as a form ofnational wealth that must be exploited (Lucasand Warren, 2003: 113–6).

Who are customary communities?

The other problem associated with the recogni-tion of customary land rights of local popula-tions is the ambiguous definition of adat, orcustomary, communities. Having concerns onenvironmental damage and human rights viola-tions caused in the process of natural resourcedevelopment in forest areas, Indonesian NGOshave supported the land claims of local farmerssince the early 1990s. The NGOs have inte-grated the notions of customary communities inIndonesian agrarian legislation and the humanrights attributed to indigenous populations intheir support (Persoon, 1998). The Alliance ofIndigenous Peoples of the Archipelago (AliansiMasyarakat Adat Nusantara, AMAN), whichwas established in 1999, represents a move-ment of local farmers who are fighting for theland rights of customary communities in coop-eration with NGOs. The communities indicatedby AMAN may range from ‘a single village of acouple of thousand inhabitants to a larger alli-ance of villages or even an entire ethnic groupnumbering twenty thousand members or more(Acciaioli, 2007: 300)’.

The ambiguous definition of customary com-munities has often triggered problems: Whowould be the most legitimate owner of the landand natural resources? What would be the

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ethical and equitable decision-making processwithin the communities? Many ethnic groupsthat have distinct histories of settlement oftenuse certain areas in an overlapping manner. Li(2007) and Eindhoven (2007) report cases inwhich the elites of certain ethnic groups usedelements of tradition as political instruments sothat they could claim stronger rights over landand natural resources than other ethnic groups.Similarly, when development companies wishto obtain agreement with local populations forthe use of customarily owned land and naturalresources, the elite members of the society oftenmonopolise decision-making and the benefitsgained from the negotiation (for examples, seeMcCarthy, 2004, 2006).

The above problems indicate that customarycommunities do not always possess the capaci-ties to peacefully solve border problems withneighbouring communities on their own, or tocarry out sufficiently equitable decision-makingwithin the communities. A presupposition ofIndonesian agrarian legislations is that ulayatrights, communal rights of control over landbelonging to the territory, arise from customarylaws shared by the members of communities.However, such idealised views of communitiesdo not conform to the reality that rural farmershave diverse identities and interests. Many com-munities are often ethnically diverse, and evencommunity members having the same ethnicbackground could be differently positioned inthe society depending on the differences in theirincomes, positions in aristocratic hierarchy, ageand gender. The lack of recognition of diverseinterests existing in local communities in thestate legislation presents major obstacles forlocal farmers who wish to strengthen their cus-tomary land rights.

Case study from East Kalimantan: Oil palmplantation development in District of EastKutai and changing perceptions aboutmeaning of landownership

Despite the gradual, yet limited, progress instate policies that respect the land rights of cus-tomary communities in the era of politicalreform, the Indonesian government has simul-taneously adopted business-oriented policies ofeconomic development and facilitated privateinvestment in natural resource exploitation.

The District of East Kutai, Province of EastKalimantan, the location of my field research,has seen rapid expansion of oil palm plantationsdeveloped by private estates. The increase indevelopment of land and natural resources byprivate companies has caused alienation of landfrom local farmers, as well as adverse impactson the local environment. Simultaneously, thelocal populations have become aware that localland and natural resources could be of highvalue, when private investors advance and offercompensation and fees. Against this backdrop,there have been increasing territorial conflictsboth between local populations and investors,and between local communities. In this section,first, I will overview the development of the oilpalm industry in the District of East Kutai.Second, relying on the interviews that I con-ducted in the Sub-District of Busang, located inthe District of East Kutai, I will examine themanners in which local farmers have strength-ened consciousness as owners of land andnatural resources (Figs 1,2).

Oil palm plantations in District of East Kutai,East Kalimantan

Palm oil and palm kernel oil combined becamethe most produced edible oil commodity in theworld, surpassing soybean oil in 2003. Indone-sia has been the largest producer of palm oilsince 2006, and the area of oil palm plantationsin Indonesia had reached 8.99 million ha in2011 (Direktorat Jenderal Perkebunan c. 2013).Oil palm estates have been developed in com-bination with processing mills, due to the char-acteristics of oil palm fruits, which must beprocessed within 48 hours after harvest of thefresh fruit bunches in order to avoid rapid dete-rioration of quality. Due to the need to buildprocessing mills close to the production site, theoil palm industry consists largely of large-scaleoil palm estates. The area where a vast expanseof land is available lies in the interior part of theOuter Islands, specifically the former opera-tional areas of logging companies.

Indonesian oil palm plantations were firststarted during the Dutch colonial period on theIsland of Sumatra, and expanded to the Prov-ince of West Kalimantan in the 1970s. Before1993, the oil palm plantations were developedby state-owned companies. However, as the



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government has encouraged private investmentin the oil palm industry since 1993 and thecommodity price of palm oil has becomehigher, many big private companies have devel-oped their estates in other parts of the OuterIslands, including Central and East Kalimantan,Island of Sulawesi and West Papua. After the fallof the Suharto regime in 1998, in the context ofpolitical reform and fiscal and administrativedecentralisation, the local governments came tohold greater authority to issue permits fornatural resource development. The strongerpower that local governments came to wieldover the development of natural resourcesaccelerated the rapid expansion of oil palmplantations. In 2002, the District Heads (bupati)came to be allowed to issue permits of up to1000 ha of oil palm estates and Provincial Gov-ernors to issue permits of over 1000 ha(Colchester et al., 2007: 46). As local govern-ments came to hold the rights to issue permitsfor establishing oil palm plantations, previouslycontrolled by the central government in Jakarta,local political elites and their entrepreneurallies obtained easy access to oil palm planta-tion establishment permits (Sirait, 2009: 4).

Oil palm estates in East Kalimantan were firstdeveloped in the District of Paser, located in thesouthern coastal part of the Province, by thestate-owned companies in 1982. But private oilpalm estates have rapidly expanded in formerforest areas located in other Districts such asEast Kutai, Kutai Kartanegara, Nunukan andBerau. In 2012, the District of East Kutai hosted307 368 ha of palm oil plantations, more than30% of the total oil palm plantation area inthe Province, 961 802 ha (Dinas PerkebunanProvinsi Kalimantan Timur, c. 2013).

Support of the Provincial and District govern-ments toward private investments in the oilpalm sector has driven the dramatic expansion.In 2012, Isran Noor, District Head (bupati) ofEast Kutai who had been actively promoting thedevelopment of oil palm estates, argued that theinvestment in oil palm estates would increasethe economic welfare of the local populations,and that it was not true that oil palm develop-ment would destroy the environment.3

However, the environmental destructioncaused by the development of plantations hasgiven rise to serious concerns. In 2012, IsalWardhana, director of East Kalimantan Friends of

the Earth commented that 350 000 ha of forest inEast Kalimantan has disappeared in the past twoyears, due to the development of coal miningand oil palm plantations.4

The development of oil palm estates andthe vast scale of agricultural transformationon the Outer Islands have been rationalised bythe ideology of bringing development to localpopulations living in poverty and backwardness(Zen et al., 2005: 4–5; McCarthy and Cramb,2009: 113). In 1978, the Indonesian govern-ment adopted the Nucleus Estate Scheme(Perkebunan Inti Rakyat, PIR), which had beenpioneered in African countries in the 1950s, inorder to involve smallholders in the develop-ment of oil palm plantations. In earlier PIRschemes, 20% to 40% of a plantation, calledthe ‘nucleus’ estate, was directly managed by astate-owned or private company, while theremaining 60% to 80% was allocated to small-holders as ‘plasma (satellite)’ plantations, eachwith an area of 2 or 3 ha. The companies builtplasma plantations on behalf of the participat-ing smallholders, provided them with high-yielding oil palm trees, fertilisers and pesticides,and ensured the purchase of fresh fruit bunchesproduced by the farmers. The farmers owe thecompany the cost in the form of bank loans, butafter completing payment of their debt, theywould gain landownership of their plasma plan-tation areas. Although several criticisms havebeen raised against PIR schemes,5 many farmershave managed to raise their incomes by partici-pating in them (Achmad et al., 2010; McCarthy,2010). However, under the revitalisationscheme, which was issued by the Minister ofAgriculture in 2006, smallholder participationin oil palm plantation development was consid-erably reduced compared to previous schemes:only 20% of the total estate area was allocatedto plasma plantations.6 In the previous system ofPIR management, participating farmers weredirectly involved in the production. Instead, inthe revitalisation scheme, using bank loans, oilpalm estates would establish plasma plantationsfor the participating farmers. After establishingthe plasma estates, the companies wouldmanage the areas on behalf of the farmers for 35years, and the participating farmers wouldreceive only the remaining portion of the profitafter the companies had deducted the repay-ment of bank loans and company management

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fees. As the participating farmers are notinvolved in production, it is uncertain to whatextent of the profit would be secured for thethem (Kawai and Inoue, 2010). In 2012, of the307 368 ha of oil palm plantations in the Dis-trict of East Kutai, 241 550 ha, or nearly80%, was controlled by the private estates.Meanwhile, smallholder estates in the Districtcovered only 65 818 ha (Dinas PerkebunanProvinsi Kalimantan Timur, c. 2013).

Background of the research site and increasinglocal consciousness as landowners

There are six villages (desa) in the Sub-District ofBusang, District of East Kutai, which I call Vil-lages A, B, C, D, E and F in order to keep theiranonymities. The area is located along the AtanRiver, a tributary of the Mahakam River. It takesfrom one to two days, depending on the roadconditions, to get from the villages to the pro-vincial capital Samarinda, using an automobileand a small boat. The populations mostly belongto the Dayaks, natives of Borneo. The majority ofthe population of Village A are Dayak Modangsand the majority population of the other villagesare Dayak Kenyahs. Most of the populations areswidden farmers, but they have also conductedcash-crop production, primarily of cocoa,coffee and rubber, since the 1990s.

The Dayak populations living along the AtanRiver originally came from Apo Kayan, near theborder with Malaysia. According to the historytold by the local populations, Dayak Modangsmigrated to this region and settled with the per-mission of the Sultan of Kutai in the 16thcentury. The Dayak Kenyahs started their migra-tion in the early 20th century, and this contin-ued until the 1980s. According to interviewswith the populations, they migrated becausethey were annoyed at the inconveniences ofliving in the hinterland and wished to gainbetter access to the advantages the city offered,including education, medical services andemployment opportunities.

In the 1970s, as the Suharto regime adoptedpolicies to introduce foreign investment todevelop natural resources, large-scale timberdevelopment schemes took place in the areaalong the Atan River. While the populationsexperienced the violation of fallow land anddestruction of fruit trees as a result of the logging

operations, the benefit that they enjoyed inreturn was a meager income as low wagelabourers and from vegetable sales at thelogging camps. The logging operations fadedaway around 2000, due to the depletion oftimber resources.

After the logging companies withdrew andthe low-wage employment at the logging campsdisappeared, the populations were left withouta substantial source of cash income and arecategorised as being in a state of poverty.7 Thepopulations are well aware of the importance ofeducation as a means to climbing the socialladder, but most of them do not have sufficientsources of income generation to finance theeducation of their children.

The interviews and participant observationthat I have conducted in the Sub-District ofBusang provide ample evidence of an increasedawareness about the importance of landowner-ship among local Dayak farmers. According totheir customary laws, once a member of thecommunity opens a land plot of primary forestfor farming, he or she would be recognised asthe owner of the plot. The landowners oftengrow perennial crops such as fruit trees on theland in order to mark their ownership of it. AsDayak farmers conduct swidden rice cultivationin rotation in order to keep the land sufficientlyfertile, they keep their agricultural land fallow inthe years that they do not cultivate. Still, theownership is recognised among the members ofthe community to which the owners belong. Thecases of selling and buying fallow land amongthe populations, although not common, suggestthat there exists clear local recognition of indi-vidual landownership within the community.

In the 1990s, many Dayak farmers startedcocoa, and then coffee and rubber, plantations.The increase among Dayak farmers of small-scale cash-crop production, which entails thecontinuous occupation of land and routine careof crops, has strengthened local consciousnessabout the importance of their individuallandownership. The advancement of naturalresource companies has been a critical factorthat has given rise to the sense of urgency toprovide evidence of landownership not onlyamong local populations, but also vis-à-visinvesting companies and government officials.Threatened by the encroachment of log-ging companies, individual members of local



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populations came to feel that registration ofland was necessary to protect their landowner-ship. According to my interview in Village F in1999, some villagers had actually tried to reg-ister their land and submitted documents thatthey believed were necessary to the local Sub-District government office. The documentsincluded the measurements of each parcel ofland that they wished to register, and signaturesof the owners of neighbouring land plots, theneighbourhood association head and the villagehead as the witness. But they were unable toregister their land parcels because, the villagersexplained, registration would cost 100 000rupiahs (approximately 10 US dollars) perhectare. The interest in land registration hasremained strong. In 2010, the head of Village Atold me that the villagers wished to obtain landcertificates, but the cost was too expensive. Infact, the local populations had been unable toget exact information on whether their landswere eligible for registration, how to registertheir land, or how much it would cost.8 In 2012,a member of Village F prepared a GPS-basedmap indicating land parcels owned by severalvillagers. He showed the map to the Sub-District head of Busang and asked if the mapcould be used for the purpose of land registra-tion. But according to the Sub-District head, thelands of Village F were not eligible for registra-tion by individual farmers because most of themhad been classified as forest areas. The landsclassified as forest areas belong to the stateunder the Forestry Law, over which the Ministryof Forestry holds the authority to grant resource-development permits to private companies.Permits for agricultural activities, including thecultivation of oil palm estates, are allowed onlyin those forest areas classified as ‘conversionforest’ (Colchester et al., 2007: 67–9; Potter,2011: 170), but local populations are not con-sulted when the government agencies classifyforest areas or even informed of which forestcategories their land belong to. Therefore, localland rights would remain insecure.

Reactions to oil palm plantation estates:Examples from two villages

In the process of democratisation and fiscal andadministrative decentralisation of Indonesiasince 1999, the general trend is that the rights of

customary communities on land and naturalresources are better respected by the govern-ment. When development companies wished tooperate, obtaining agreement from local popu-lations became mandatory either in the writtenlaws and regulations, or in the unwritten codesof conduct at various administrative levels.However, many companies have tried to mini-mise their cost and buy the agreement of localelites, without gaining genuine consent fromthe local communities. In the case of the Sub-District of Busang, an examination of two vil-lages, namely Village D and Village A, showsthat policies set up to respect the rights of cus-tomary communities have brought contrastingconsequences depending on the different attrib-utes of leaders and how the leaders were posi-tioned in the societies they represented.

The case of village D: Impacts of oil palmplantation on local lives

Hamparan Perkasa Mandiri (HPM) Ltd andSubur Abadi Wana Agung (SAWA) Ltd, whichhave advanced into the Sub-District of Busang,District of Kutai belong to the same corporategroup, but are established as two estates, com-plying with a government regulation that limitsthe size of an oil palm plantation to 20 000 ha(Colchester et al., 2007: 58).

HPM Ltd and SAWA Ltd started their operationin 2007. There are five villages in their operationarea, namely, A, B, C, D and E. Among the fivevillages, onlyVillageA rejected the advancementof the companies in their village area. The totalsize of oil palm plantation areas developed byHPM and SAWA is 26 000 ha. According to myinterview at the estate camp of HPM in March2009, none of the white-collar employeesworking at the office was from any of the thelocal populations, while about 400 low-levellabourers who were employed on a daily basisincluded both the local population workersand migrants who came from other areas ofIndonesia.

I conducted interviews and participant obser-vations in Village D during two visits, in August2009 and March 2010, regarding the impact ofthe oil palm estates on local society and liveli-hood. In Village D, the operation area of HPMwas located right across the Atan River, and thatof SAWA adjacent to village land. When I con-

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ducted interviews in Village D in 2009 and2010, only HPM had started its operation, whileSAWA started clearing the prospective opera-tion site in 2011. I would like to assess theimpacts from four aspects, namely, land con-flicts, local employment, accountability andtransparency of the ‘partnership’ arrangementbetween the companies and populations, andthe planned distribution of oil palm estates tothe local populations.

Land conflicts Given the vast size of the landthat the oil palm estates acquired for plantationsites, land conflicts with local populations wereinevitable. In 1993, the elites of Dayak Kenyahcommunities living along the Atan River, includ-ing those of Village D, made an agreement that7 km from the riverbanks on both sides shouldbe protected as customarily owned land ofDayak Kenyahs. The decision was the responseof the populations to the increasing encroach-ment of logging companies on their land use.Based on this decision, the Kenyahs had nego-tiated with local government officials andlogging companies so that they would be ableto keep the land areas intact for the use of localcommunities, specifically for their rice produc-tion. However, in the negotiations with loggingcompanies, the Dayak populations had to com-promise and reduce the area that they couldkeep intact from company operations.

In their relation with HPM, Village D tried tokeep 3 km from the riverbank intact from the oilpalm plantation. However, the then Sub-Districthead, who strongly supported the advancementof oil palm estates, made an agreement with thecompany that the operation area could be sitedas close as 1 km from the riverbank. The villag-ers were not consulted when the agreement wasmade. HPM did not respect even this agreementand expanded its operation coming as close as300 m from the riverbank. Company operationsin such close proximity to the riverbank causedthe river to become polluted, and the decreaseof fish and harmful effects on health became alocal concern. In relation to land acquisition,there were 10 households who owned fallowlands in the area that was cleared for the opera-tion. They protested against the intrusion of oilpalm estates into their land, but the companycontinued to appropriate the land. The land-owners then asked for compensation, but the

company did not respond. One villager fromVillage E, which is located nearby Village D, losthis 30 ha of rattan garden. Such cases of landconflicts were inevitable because, once havingreceived a permit from the District government,the oil palm estates owned the right to operatein the area. The legal obligations imposed onthe companies to gain agreement from the localpopulations for their operations were easilyevaded, by taking advantage of local ignoranceor obtaining easy agreement from corruptiblemembers of the society.

The company presence has had an impacton what landownership means to local lives,and given rise to a new perception of land,which, in addition to farmland, also includesthe notion of land as property that could bevaluable for future exchange. According to myinterviews in August 2009, the 10 householdsaffected by company operations included threefamilies who had already moved to Pampang, avillage located close to the provincial capitalSamarinda, before the advancement of HPM.They claimed the land not because they hadlost their farmland as a means of subsistence,but simply for compensation. Another affectedlandowner was a middle-school teacher whohad taught in a village located downstream for19 years. He said that he was planning toreturn and currently in the process of applyingfor a teaching assignment in Village D. He andhis cousin, who had already moved toPampang, co-own 7 ha of land that had beencleared by HPM, and the company offeredthem plasma land in another location toresolve the case. But the teacher did not acceptthe offer, because he believed that the currentland was larger than the plasma land that thecompany offered, and also far more valuablebecause of the potential of developing a coalmine. His assumption of a potential coaldeposit under his farmland was not baseless,because there was a coal mining companyoperating next to HPM. The land claims madeby individual landowners suggest that the landinterests of local populations have becomediverse and no longer limited to those of tradi-tional subsistence farming. The diversity oflocal land interests certainly do not fit the ide-alistic notion of coherent communities regu-lated by customary laws, and raises thequestion of to what extent local community



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organisations are in appropriate positions formaking decisions on behalf of the populations.

Problem of employment The benefit ofemployment for local populations was limited,and the prospect of growth in local incomewas far from robust. When employed, womenlabourers were assigned to weeding andgrowing seedlings, for a wage of about 40 000to 50 000 rupiahs (four to five US dollars) a day.Male labourers were hired under short-termcontracts to build estate facilities. The salaryfrom employment at HPM would be higher thanthe minimum wage in the Province of EastKalimantan, 800 000 rupiahs a month, workingfull-time. As the average revenue of the adultvillagers of Village D was about 400 000rupiahs a month, the income that they wereable to gain from employment was a positiveside of the company’s presence. However, thereare primarily two reasons why the benefit isneither substantial nor sustainable.

First, in terms of working hours, swidden riceproduction is not compatible with long-termlabour at the oil palm estates. Therefore thelocal populations have to choose either riceproduction or employment at oil palm estates.Meanwhile, if they have to buy rice, theincome earned through employment was notsufficient for the local populations. The villag-ers sought employment at the estate when theycould, depending on which stage of rice pro-duction the villagers were at, prioritising theirswidden rice production over employment atthe oil palm estates. Thus, the number of vil-lagers working at the estate ranged from 40 to100, depending on the season. Consequently,the income resulting from employment islimited.

Second, the company had promised the vil-lagers of Village D that they would give priorityto the employment of local populations, so thatthe company operation would benefit local live-lihoods as much as possible. But the companyhired about 50 labourers from Java and Floresbecause, according to the explanation of thecompany officer, the number of local villagerswho regularly took employment was not stableand they were not a dependable source ofemployment. But the reality is that the migrantworkers are easier to handle as a labour forcefor the company than the local villagers. The

migrant labourers from Java and Flores came tothe oil palm estates by being transported by thecompany. Owing money to the company, theyare obliged to take harsh working conditionsthat the local populations would not endure(see the similar observation on migrant workersin Li, 2011).

In sum, oil palm investment in the Sub-District of Busang has not resulted in the crea-tion of jobs at the estates that benefit the localpopulations. While local populations loseaccess to their land, the jobs that could mitigatethe loss of their livelihood are taken by migrants(A similar observation was made in the 2011World Bank report on farmland investment.Deininger and Byerlee, 2011: 68–9).

Accountability and transparency of ‘partner-ship’ arrangement In return for the land thatthey provided to oil palm estates, local popula-tions are to be benefited by a ‘partnership(kemitraan)’ arrangement, in which the estatesare to assist them in a manner on which the twoparties have mutually agreed. The partnershiparrangement is materialised by cooperatives(koperasi), a formal legal entity established bylocal farmers. According to the agreement,cooperatives would function as a partner of thecompany and undertake certain tasks on itsbehalf, for example, employment of local popu-lations. Importantly, cooperatives wouldprovide oversight of the plasmas on behalf ofthe companies in the revitalisation scheme. Theformer Sub-District head and the company con-cluded a partnership agreement that did notreflect the opinions of the villagers, and estab-lished a cooperative that could be manipulated.The villagers of Villages C, D and E carried outa demonstration against the company in March2010. One complaint of the villagers was thatthe cooperative, as a contractor of the company,had made available land that lay within 100 mfrom the side of an automobile road, as well asland located within 3 km of the riverbank,without their agreement. The villagers were alsoangry because the company had concluded anarbitrary agreement with the cooperative thatthe company could obtain timbers harvestedwithin the land they operated. The villagersbelieved that, according to the agreement thatthe company had made with the villagers, the

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timbers should be brought to the village area forthe use of the populations. Some villagers sus-pected that the cooperative and company hadsubtracted a part of the salaries earned throughtheir employment at the estates: they had signeda contract with the company for payment of 1million rupiahs, but the cooperative, acting asan intermediary, had paid them only 450 000.Due to this conflict with the villagers, HPMsuspended its operation and terminated all localemployment. As has been pointed out in othercases (McCarthy and Cramb, 2009: 116;McCarthy, 2010: 830–1; Gillespie, 2012: 266–7), in partnership arrangements between com-panies and local populations, the operations ofthe cooperatives, which were supposed to func-tion as an intermediary between the companyand local populations, were often neitheraccountable nor transparent, and became thesource of grievance on the part of the popula-tions. The case observed in the Sub-District ofBusang shared the same problem.

Distribution of oil palm plantations and lack ofinformation The distribution of 20% of theplasma plantations is said to be the majorbenefit that the local populations wouldreceive from oil palm plantation develop-ment. According to information from the fieldmanager of HPM in March 2010, the companyhad already established 2000 ha of plantation,and thus an area equal to 20% of the planta-tion, or 400 ha, was supposed to be distributedto the local villagers as plasma plantation plots.However, when I conducted interviews inVillage D in August 2011, the villagers hadnot received any plasma plots, and little infor-mation was available to them about wherethe possible plasma plots would be. Underthe revitalisation scheme, the farmers whoreceived plasma plots are not allowed to growpalm trees or produce fruits on their own as inthe previous PIR system, but only receive‘rent’. The local cooperatives are responsiblefor production and provide farmers with profitsafter deducting the costs needed for the devel-opment of plasma plots and the cooperative’sfee for providing oversight. In the absence of atrusting relationship with the cooperative, thescepticism of local farmers about the promisedgain was reasonable.

Decision-making monopolised by elites

In sum, in the case of the Sub-District ofBusang, District of East Kutai, the advancementof oil palm estates did not contribute to thewelfare of the local villagers, due to the landconflicts, the little benefits that the local popu-lations received from employment, the lack oftransparency in the partnership arrangement,and the distribution of plasma plantations.Although the above issues were a source ofgreat concern to the villagers, Village D offi-cially accepted the presence of HPM andSAWA, because the decision-making wasmonopolised 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: thevillage head, the village customary head andthe customary head of Atan River. The Sub-District of Busang was created in 1999, and theoffice of Sub-District head has been located inVillage D since then. The Sub-District head in2007, when HPM and SAWA advanced, wasactively promoting advancement of oil palmestates. Being close to the Sub-District govern-ment, the village head and customary head ofVillage D did not oppose the advancement ofHPM and SAWA. Meanwhile, the customaryhead of Atan River opposed the companies,influenced by NGOs in Samarinda that pro-vided him with information about the potentialrisks of land loss and environmental destruc-tion. However, according to his own explana-tion, the employees of SAWA visited him lateone evening, and he signed a document withoutreading it carefully. It turned out that the docu-ment was meant to be the local populations’approval of the operation of the company.When I conducted interviews in 2008 and2009, the opinions of the villagers of Village Dabout the advancement of oil palm estates weredivided. The then-Sub-District head had told thevillagers that the villagers would receive plasmaplots, from which the villagers would accrue aprofit of 2 million rupiahs a month even at thestarting stage, and later the profits wouldincrease to 4 to 5 million rupiahs a month. Thenew Sub-District head who took the job in 2009was a Dayak Kenyah and originally from VillageF. In 2009, the conflicts between the villagersand the company became salient and he



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received complaints from the villagers whoseland was affected by company operations. Inmy interview in 2009, the new Sub-Districthead said that he recognised both the good andbad sides of oil palm development. While thecompany presence would accompany roadconstruction, which was necessary for popula-tions living in the hinterland, he was aware ofthe bad impacts on local culture, specificallythe violation of customary land rights of localcommunities. He said that the local popula-tions’ benefit from the distribution of plasmaplantations would be the key, and without this,the company would just take advantage ofthem. The new Sub-District head was trying toresolve the conflict associated with the coop-erative by making an arrangement whereby thelocal populations could choose between thecooperative that had worked with the company,and a new cooperative that was supported bymany of the local populations. But he refrainedfrom taking sides in the conflict between thecompany and the local farmers. In 2011, SAWAcleared the land for its operation, which was anarea of 24,000 ha, while HPM had alreadyopened 2000 ha since 2007. Learning about thevast area of land that SAWA had cleared, thevillagers were astonished. Many villagersbecame worried whether they would receiveallocations of plasma plantations, as the com-panies had claimed, and also concerned withthe ongoing escalation of river pollution.However, the populations felt that it was too lateto reclaim the land appropriated by the estatesbecause company operations had alreadystarted.

The case of Village A: Community-based forestmanagement initiative to counter businessinterests and accompanying territorial tensions

Village A, consisting of three settlements of dif-ferent ethnic origins, Dayak Modang, Kutai andBugis, is one of the six villages located in thedistrict of Busang. In Village A, the village headwas in a close relationship with NGOs inSamarinda and rejected the advancement ofHPM and SAWA into village areas. Most of theModang villagers of Village A were Catholics,and the Catholic priest who had lived in thevillage since 2004 supported the initiative ofthe village head by talking to the villagers about

the risks of oil palm estates, including land con-flicts and environmental destruction. In VillageA, the village head and the Catholic priestplayed important roles in attracting NGOsupport and organising the villagers.

The villagers have cooperated with an NGOin Samarinda so that they could register theircustomarily owned forest area as ‘village forest(hutan desa, or HD)’, which is a legal title rec-ognised by the Ministry of Forestry in 2008.9 TheHD programme was set up with the aim ofstrengthening Community-Based Forest Man-agement (CBFM) in the Indonesian forest sector.If their forest area is approved as HD, the vil-lagers could protect the area from companyadvancement and maintain it under their ownmanagement for 35 years. The NGO hasassisted the villagers to conduct GPS mappingin order to prepare the necessary documents forapplication. However, the application byVillage A to the HD programme has faced twomajor constraints.

First, government policies that prioritise busi-ness interests over the progress of CBFM poli-cies become the primary constraint. While theyhad started their application in 2010, the Min-istry of Forestry had in 2011 issued to a pulp andpaper company a business licence for an areathat overlapped with Village A’s proposed HDsite. By government regulation, those areas towhich private companies have received busi-ness licences are not eligible for HD. The villag-ers of Village A argued that the governmentapproval of the business licence was not valid,because the villagers had not agreed with thecompany operation. They sent a letter to theMinistry to request that the advancement ofthe company on the village be rejected, but theoutcome was not clear because cancellation ofbusiness licences is known to be difficult.

Second, as local populations in the villageslocated in the Sub-District of Busang havebecome increasingly aware of the potentialvalues of local natural resources, territorialinterests among communities have been politi-cised. The neighbouring villages felt that theformalisation of the border as a result of VillageA’s registration of HD would jeopardise theirland rights. The six villages located in the Sub-District of Busang do not have documentedborders separating them, because they had feltthat using natural landmarks such as mountains

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and rivers would be sufficient to indicateborders. According to the history narrated bythe villagers of Village A, the Dayak Modangsstarted settling in the current area of the Sub-District of Busang in the 16th century, and theywere legitimately admitted as the ruler of thearea by the Sultan of Kutai around the 17th or18th century. The Dayak Kenyahs, to which theother five villages belonged, settled afterwardsand were allowed to use the land by theModangs. Because of their history, the villagersof Village A felt that their territorial claim wasstronger than the others’. Within the area thatVillage A proposed for HD, there was a lake thatwas perceived by the inhabitants of Village A tobe of cultural importance in their ancestralhistory. But the lake was located in an area thatbelongs to Village F. The supporting NGO inter-vened between Villages A and F, who agreedthat Village F would also apply to register thearea as HD and Villages A and F would coop-erate to manage the lake area if the land wasadmitted as HD. However, there was growingconcern on the part of the elites of the other fourvillages that Village A might determine the ter-ritorial borders on its own and violate theirinterests by registering their land as HD. Facedwith frustration among the other villages, on theoccasion of a Sub-District gathering for theIndependence Day ceremony in August 2011,the village head of Village A disclosed their planof HD registration and explained that theirintention was not to monopolise the territory,but to enable forest conservation. However, thesuspicions of the other village elites regardingterritorial issues remained. After the gathering,the village head ofVillage A told me that gainingunderstanding from the other villages regardingthe border of their HD would not be necessary,because Modangs had stronger rights on theland because of their ancestral history.

An examination of the case of Village Dshows that state policies that rely solely on thedecision-making process within communitiesare insufficient to bring about democratic out-comes in local societies. In many cases, thecompanies are tempted to interpret ‘agreementwith communities’ as gaining easy permissionfrom corruptible elite members of the commu-nity, an inexpensive way to gain local consent.In closely knit social relationships, in additionto the difficulty of finding out correct informa-

tion, it is often difficult for non-aristocratic com-munity members to voice their opinions, even ifthey feel that they have been cheated. The caseof Village D suggests that the local hierarchi-cal social relationships kept non-aristocraticmembers of the society from participating in theprocess of decision-making. The decision-making process within communities is oftendominated by local leaders, and the interests ofcommon villagers are often neglected.

Meanwhile, Village A was able to take advan-tage of the opportunities generated by policyreform. In Village A, the villagers rejected theadvancement of oil palm estates, thanks to theleadership of the village head and the Catholicpriest, the peaceful relationship among the dif-ferent ethnic populations within the village andNGO support. However, in spite of beingendowed with such favourable factors, Village Ahas yet to succeed in realising the security oftheir land use, due to the contradictory forestrypolicies of the Ministry of Forestry that prioritisebusiness interests over local initiatives of CBFM.The case of Village A also underlines theproblem of land reforms that focus on commu-nal forms of customary land rights. In policyreforms intended to recognise local customaryland rights, local populations, the decision-making within which were often monopolisedby elite members, had greater discretion tonegotiate with private companies over compen-sations and fees that would be paid for appro-priation of land and natural resources. In thiscontext, when Village A tried to formalise itsborders in the process of registering for HDarea with the government, the neighbouringcommunities suspected the potential loss intheir future benefits that might be accruedfrom the advancement of natural resource com-panies and strengthened the territorial claimsof their communities. The case suggests thatpolicy reforms centred on communal formsof customary rights over land and naturalresources give rise to territorial tensions amongcommunities.

What could be done to strengthen the rightsof farmers to land and natural resources?

Indonesia’s land reforms have been guided bypolicies aimed to strengthen the customary landrights of communities. However, the idealised



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image of coherent interests existing amongmembers of customary communities does not fitthe reality, and the institutions of customarycommunities have often turned out to be insuf-ficient to resolve conflicts related to locallandownership and use, specifically in relationto outsiders, in a manner that would benefitcommunity members. One of the legal optionsto avoid the risks of arbitrary power use by localleaders and emergence of territorial tensionsbetween communities is individual land regis-tration. In the case of the Sub-District of Busang,there was increasing interest in state-sponsoredland registration schemes, and some membersof the populations tried to register their custom-arily owned land plots. However, it is highlydubious whether the farmers truly benefit fromstate-sponsored land registration schemes. Theobstacles entailed include the following issues.First, even if forest-dwelling farmers could reg-ister the land that they have customarily usedand owned, the state maintains control overforest land under the 1999 Forestry Law, so theirland rights could be easily revoked upon thedecision of the Ministry of Forestry. Second, thehistorical backgrounds in which farmers settledon their land greatly vary, and many casesinvolve migration and informal land transac-tions between members of different customarysystems. When the various historical back-grounds are taken into consideration, there is nosimple answer as to which standard the stateshould adopt when granting land titles to infor-mal landowners. Third, the capabilities andresources that community members were ableto mobilise for registration of their land variedwidely. It is very likely that many among thepopulations cannot financially afford to registertheir land, even if they wish to do so. Fourth, asDeininger (2003; xxviii-xxix) and Fitzpatrick(2005; 453) both point out, the problems ofinefficiencies in the land administration institu-tions could preclude the realisation of the ben-efits of secure tenure. Then, what forms of staterecognition of customary land use of localfarmers would be realistic and effective in orderto strengthen local land rights? According toFitzpatrick, when traditional authorities func-tion effectively in settling disputes and theprimary cause of local land insecurity isencroachment by outsiders, a ‘minimalistapproach,’ in which the state simply recognises

customary rights and certain areas are registeredas customary land, would be the most appro-priate. However, when inter-community con-flicts or internal conflicts arising from individualdealings of land with outsiders are present,Fitzpatrick argues that the ‘minimalist approach’of the state to recognise and leave them withoutfurther intervention would risk exacerbation ofconflicts. Referring to case studies in Africanand Pacific countries, Fitzpatrick suggests thatwhen local communities wish to becomeinvolved in land dealings with outside investors,and the customary groups do not function toprovide their members sufficient tenure securitywithin the communities, the creation of a cor-porate structure, in which certain constitutionalprovisions to ensure fair distribution of benefitsexist, or further intervention of the state inthe internal affairs of customary communities,would be necessary. As an example of stateintervention, the state could establish LandBoards, to which authority over traditionalland is transferred and which gives customaryland rights greater protection under formal law(Fitzpatrick, 2005: 457–465 and 471–2).

As Fitzpatrick points out, there is no singlebest practice (Fitzpatrick, 2005: 471) to securecustomary tenure, and each arrangement has itsown potential problem. In Indonesia’s case,cooperatives, incorporated groups establishedby local farmers in accordance with state legis-lation, often fail to ensure fairness in distributingbenefits when they deal with companies. At thesame time, elite members, feeling their intereststo be disadvantaged, may oppose such arrange-ments in alliance with outside business inter-ests. The state is also not a neutral third party. Inmany cases, even after democratisation, thestate has backed business interests so that thegovernment can maximise the use of naturalresources existing in the country. Consideringthe global pro-business tendency of state poli-cies, which has also been evident in the case ofthe oil palm industry in Indonesia, it would betoo optimistic to rely on state intervention tomaximise the interests of local farmers againstbusiness interests. In order to minimise theproblems and improve the implementations ofarrangements for the recognition of customarytenure, institutionalised third-party monitoringand interventions according to internationalstandards may be useful. Institutions that do not

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simply represent the state but consist of a coa-lition of local communities, NGOs and govern-ment, maybe appropriate and necessary toenable effective third-party interventions. Inorder to curb opposition from traditionalauthorities, the third party should conduct inde-pendent and detailed research of de facto, yetinformal, land use and ownership of individuallandowners, specifically in order to identify andprotect the interests of minority populations towhom alienation from land use is often detri-mental to their subsistence.

Conclusion

Why has the gradual state recognition of cus-tomary tenure, if still limited, failed tostrengthen the land rights of local farmers? Inorder to answer the question, I presented a casestudy of two villages facing similar threats totheir land use and ownership due to rapidexpansion of large-scale oil palm estates in theProvince of East Kalimantan. The finding indi-cates the fallacy of the widespread optimismthat state recognition of customary land rights ofcommunities would automatically lead to thesecurity of landownership of local populations.In one village, the company took advantage ofthe local hierarchical social structure, andobtained easy approval from elite members toadvance and set up operations in a way thatserved the interests of the company at the costof those of local populations. In the othervillage, strong leadership made it possible toprevent company advancement that was againstlocal interests, and the villagers tried to protectcustomary land use by participating in the state-sponsored CBFM programme. However, thelocal initiative to participate in the CBFM pro-gramme was thwarted by inconsistent forestrypolicies of the state that prioritise business inter-ests, and aroused the territorial interests ofneighbouring communities that were expectingpossibilities of future benefits accrued fromcompensations and fees when private compa-nies would appropriate land and naturalresources. The case of East Kutai, where landreform centred on the recognition of land rightsof customary communities has led to the abuseof power by elite members and territorial ten-sions between neighbouring communities, isnot unique.

What then are the challenges and what isneeded in order to make customary land rightsmore secure? In relation to the use and owner-ship of customarily owned land and naturalresources, the rural communities often facechallenges of insufficient internal capacities forequitable decision-making and solving conflictswith intruding outsiders. The communities thatlack a functional and accountable internalstructure for problem-solving need third-partyinterventions that assist the local populations tobuild institutional arrangements for better rec-ognition of customary land rights. The interven-tion should be based on careful research andclarification of de facto land use, and con-ducted in a manner that is accountable andbeneficial for the welfare of local farmers,including minority populations. Along withsuch arrangements, there should be reformsintroduced into national agrarian legislation,making it more consistent and ensuring that thewelfare of local farmers is prioritised over busi-ness development.

Acknowledgements

This work was supported by the JSPS KakenhiGrant Numbers 20530111 and 20530156.Earlier version of this article was presented atthe Annual Conference of the Association forAsian Studies, Toronto, March 2012. The authorwould like to thank Prof. Elizabeth Collins andProf. Hiroyoshi Kano for their valuable com-ments. The author appreciates editorial assis-tance given by Ryu Takeguchi, Suprianto andCharlotte Ward in the process of preparation ofthis article. The author also thanks Bapak Drs.Darwin, MSc APU, Sandra Moniaga, EmikoFujiwara, the staff at Nurani Perempuan inSamarinda and populations in Sub-District ofBusang for their generous assistance thatenabled the series of field research. The authoris solely responsible for the contents and viewspresented in this article.

Notes

1 In 1998, the area belonged to the District of MuaraAncalong, but in 1999 came under the current admin-istrative district, the District of East Kutai.

2 They are Kampar District Regulation 12 of 1999 in Riau,Sumatra, Lebak District Regulation 32 of 2001 in Banten



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Province, Nunukan District Regulation 4 of 2004 in EastKalimantan, and Provincial Regulation 6 of 2008 onAdat Land Rights and its Utilization in West Sumatra(Bakker, 2008: 1–2; Sirait, 2009: 22–3).

3 ‘Isran: Tak Benar Jika Kebun Sawit Rusak Lingkungan,’Kaltim Post, 17 June 2012.

4 ‘350 Ribu Hectare Hutan Hilang,’ Kaltim Post, 12 April2012. Many oil palm estates have not fulfilled theresponsibilities set forth by legislation. Although 53 oilpalm estates received permits to open oil palm planta-tions covering more than 600,000 ha in East Kutai Dis-trict, only 174,713 ha have been planted by the end of2010, according to the Office of Plantation in the Dis-trict (‘53 Perusahaan Kelapa Sawit di Kutai Timur,’ KaltimPost, 1 April 2011). The limited planted areas give rise tosuspicions that the investors may only be intending toconduct logging or mining development in the areas andhave no intentions of starting plantations.

5 There has been the emergence of social disparitybetween those who have suffered from the negativesocial impacts and those who have benefited fromthe programmes, specifically Javanese farmers whomigrated under the government-sponsored Transmigra-tion scheme and participated in PIR. The participatingfarmers also faced problems. There were many cases inwhich the prices of fresh-fruit bunches of oil palm pro-duced by farmers were manipulated by the estates(McCarthy and Cramb, 2009: 116; McCarthy, 2010:830). Farmers often failed to sell their fresh-fruit bunchesto processing mills on time, because the companiesoften prioritised the fruits produced in nucleus estates(Kaltim Post, 6 February 2012).

6 Agricultural Ministerial Regulation No.33 of 2006 onthe Development of Plantation via Plantation Revitali-zation Program (Peraturan Menteri Pertanian Nomor:33/Permentan/OT.140/7/2006 Tentang PengembanganPerkebunan Melalui Program Revitalisasi Perkebunan).

7 According to an interview with the head of Village F in2009, the average monthly cash income of the villagers,though it was hard to calculate because of the instability,would be about 500 000 rupiahs, or fifty dollars.

8 Conducting swidden rice farming as a means of liveli-hood, Dayak farmers normally own several land plotsfor rotation. There is no concrete government policy tolimit the size of land that the populations are able toown. But the local populations have heard rumours thatthe size of land that they would be able to register maybe limited to, perhaps, 2 ha, which is the size that thegovernment has granted to Javanese farmers in the trans-migration programme, but which is clearly not sufficientfor Dayak farmers to continue their traditional agricul-tural practices.

9 Forestry Ministerial Regulation No.49 of 2008 on VillageForest (Peraturan Menteri Kehutanan No.P.49/Menhut-II/2008 tentang Hutan Desa).

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http://disbun.kaltimprov.go.id

http://ditjenbun.deptan.go.id/tinymcpuk/gambar/file/Luas_Areal_Estimasi_2013.pdf

http://ditjenbun.deptan.go.id/tinymcpuk/gambar/file/Luas_Areal_Estimasi_2013.pdf

revival of tradition in Indonesian politics: The deploy-ment of adat from colonialism to indigenism,pp. 337–370. London and New York: Routledge.

Li, T.M. (2011) Centering labor in the land grab debate, TheJournal of Peasant Studies 38(2): 281–298.

Lucas, A. and C. Warren (2003) The state, the people, andtheir mediators: The struggle over agrarian law reformin post-new order Indonesia, Indonesia 76: 87–126.

McCarthy, J.F. (2004) Changing to gray: Decentralizationand the emergence of volatile socio-legal configura-tions in Central Kalimantan, Indonesia, World Devel-opment 32(7): 1199–1223.

McCarthy, J.F. (2006) The fourth circle: A political ecology ofSumatra’s rainforest frontier, Stanford, California: Stan-ford UP.

McCarthy, J.F. (2010) Processes of inclusion and adverseincorporation: Oil palm and agrarian change inSumatra, Indonesia, The Journal of Peasant Studies37(4): 821–850.

McCarthy, J.F. and R.A. Cramb (2009) Policy narratives,landholder engagement, and oil palm expansion onthe Malaysian and Indonesian Frontiers, The Geo-graphical Journal 175(2): 112–123.

Persoon, G. (1998) Isolated groups or indigenous peoples:Indonesia and the international discourse, Bijdragentot de Taal-, Land- en Volkenkunde 154(2): 281–304.

Potter, L. (2011) Agrarian transitions in Kalimantan: Char-acteristics, limitations and accommodations, in R.De Koninck, S. Bernard and J.-F. Bissonnette (eds.),Borneo transformed: Agricultural expansion on theSoutheast Asian frontier, pp. 152–202. Singapore:NUS Press.

Sirait, M.T. (2009) Indigenous peoples and oil palm planta-tion expansion in West Kalimantan, Indonesia.

Zen, Z., C. Barlow and R. Gondowarsito (2005) Oil palm inIndonesian socio-economic improvement: A review ofoptions. Retrieved 17 November 2010, from Website:https://crawford.anu.edu.au/acde/publications/publish/papers/wp2005/wp-econ-2005-11.pdf

Newspaper articles

Retrieved 4 July 2012, from Kaltim Post Website: http://www.kaltimpost.co.id

‘53 Perusahaan Kelapa Sawit di Kutai Timur’ Kaltim Post, 1April 2011.

‘Butuh Pabrik Pengolahan Sawit Khusus Rakyat’ Kaltim Post,6 February 2012.

‘350 Ribu Hectare Hutan Hilang,’ Kaltim Post, 12 April2012.

‘Isran: Tak Benar Jika Kebun Sawit Rusak Lingkungan,’Kaltim Post, 17 June 2012.

Legislation

The Basic Agrarian Law (Undang-Undang Pokok Agraria,UUPA) of 1960.

The Basic Forestry Law (Undang-Undang Pokok Kehutanan)of 1967.

The Basic Mining Law (Undang-Undang Pokok Pertam-bangan) of 1967.

The Law No.41 of 1999 on Forestry (Undang-UndangRepublik Indonesia Nomor 41 Tahun 1999 tentangKehutanan).

The Law No.18 of 2004 on Plantation Estate (Undang-Undang Republik Indonesia Nomor 18 Tahun 2004Tentang Perkebunan).

The Law No.26 of 2007 on Spatial Planning (Undang-Undang Republik Indonesia Nomor 26 Tahun 2007Tentang Penataan Ruang).

The Law No.32 of 2009 on Environmental Protection andManagement (Undang-Undang Republik IndonesiaNomor 32 Tahun 2009 Tentang Perlindungan DanPengelolaan Linkungan Hidup).

Ministerial Regulation No.5 of 1999, issued by the Ministerof Agrarian Affairs/Head of the National Land Agency,on Guidelines to Solving the Problem of Hak Ulayat ofAdat Law Communities (Peraturan Menteri NegaraAgraria/Kepala Badan Pertanahan Nasional Nomor 5Tahun 1999 Tentang Pedoman Penyelesaian MasalahHak Ulayat Masyarakat Hukum Adat).

The People’s Consultative Council Resolution No. IX of2001 on Agrarian Reform and Management of NaturalResources (Ketetapan Mejelis Permusyawaratan RakyatRepublic Indonesia Nomor IX/MPR/2001 TentangPembaruan Agrarian dan Pengelolaan SumberdayaAlam, Tap MPR IX/2001).

Agricultural Ministerial Regulation No.33 of 2006 on theDevelopment of Plantation via Plantation Revitaliza-tion Program (Peraturan Menteri Pertanian Nomor:33/Permentan/OT.140/7/2006 Tentang PengembanganPerkebunan Melalui Program Revitalisasi Perkebunan).

Forestry Ministerial Regulation No.49 of 2008 on VillageForest (Peraturan Menteri Kehutanan No.P.49/Menhut-II/2008 tentang Hutan Desa).



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https://crawford.anu.edu.au/acde/publications/publish/papers/wp2005/wp-econ-2005-11.pdf

https://crawford.anu.edu.au/acde/publications/publish/papers/wp2005/wp-econ-2005-11.pdf

http://www.kaltimpost.co.id

http://www.kaltimpost.co.id

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