Plans to rapidly expand palm oil production in Indonesian New Guinea are unlikely to boost livelihoods for local communities since most investors are outsiders and the bulk of workers will be migrants, argues a paper published in Environment, Development and Sustainability.
The study, authored by Krystof Obidzinski, Ahmad Dermawan and Adi Hadianto, assessed the economics of a government-led push to increase oil palm plantations in the eastern-most part of Indonesia. They found that while initiatives like the 1.2-million-hectare Merauke Integrated Food and Energy Estate (MIFEE) would increase economic output at a provincial level and create jobs, most of the benefits wouldn’t accrue to locals.
“Depending on the plantation development scenario, our analysis shows that from 10,000 to more than 1 million jobs could be created,” led author Obidzinski was quoted as saying in a Center for International Forestry Research (CIFOR) blog post. “Unfortunately, most jobs on oil palm plantations require unskilled labor, and wages for such work wouldn’t do much to improve the earnings in low-income households.”
Worse, say the authors, palm oil projects could increase conflict over land rights, payments, and non-native workers.
“Investors usually believe a one-off payment means they’ve purchased the land, but Papuans don’t realize that — they often believe their land has been rented, not sold and that they should receive compensation at regular intervals,” Obidzinski said.
Indeed, a 2009 report by the Environmental Investigation Agency (EIA) and Telapak, found that communities in Papua and West Papua have signed agreements that pay them $1.50 to $45 per hectare. In contrast, a developer can expect that land to be worth upwards of $5,000 over the life of the plantation.
Obidzinski and colleagues suggest that better planning could help reduce perverse outcomes from oil palm expansion in Papua, where in recent years nearly 60 percent of new plantations have been established at the expense of old-growth forests.
“The government should reduce the size of plantation investments and plan their implementation as part of a broader development package to allow greater economic integration and skill acquisition by local communities. The priority areas for plantation development should be degraded, non-forest land,” they conclude.