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Which version? Confusion over environmental fallout of Indonesia deregulation law

An oil palm canopy in Indonesia, the world's top producer. Photo by Rhett A. Butler

  • A rule allowing subsistence farmers to burn small plots of land has been reinserted into the Job Creation Act passed last week.
  • Other provisions affecting the plantation industry have also been adjusted in a new version of the law that appeared this week.

Multiple versions of a sweeping deregulation law passed in Indonesia last week contain substantial differences affecting the nation’s plantation sector, despite assurances from lawmakers that any changes to the text made in recent days were merely cosmetic in nature.

One of the most striking differences pertains to slash-and-burn agriculture, which has long been illegal for all but small farmers. A version of the law that circulated on Oct. 5, hours after it was ratified at a plenary session of the nation’s parliament with approval from President Joko Widodo’s administration, deleted the small farmers exemption from existing legislation. But it reappeared in a version of the deregulation law that emerged on Oct. 12.

The Oct. 12 version also contains key differences related to plantation companies’ liability for wildfires, a restriction on speculative “land banking,” and Jakarta’s discretion to determine the size of plantations — all of which carry significant implications for Indonesia’s dwindling rainforests.

Indra Iskandar, the secretary-general of the nation’s parliament, told local media on Oct. 12 that there had been “no substantive changes” between the two versions, and that any differences were due to addressing “typos” and “formatting.” He did not respond to questions sent to his phone about the changes identified by Mongabay.

The deregulation law, which amends some 75 existing laws, has faced heated opposition from critics who say it slashes labor rights and environmental safeguards in a misguided bid to boost investment in a country hit hard by COVID-19.

Lawmakers rushed to pass the bill, called the Job Creation Act but better known as the “omnibus” law, one day before tens of thousands of workers were set to go on strike over it.

Demonstrations went ahead anyway, and they have seen the security forces deploy tear gas and water cannons against protesters, hundreds of complaints of police brutality and around 6,000 people arrested for allegedly creating chaos in the streets. The rallies have continued this week, with unions calling on the president to revoke the law.

Citizens demonstrate against the omnibus law in Indonesia on Oct. 7. “Sharks eat tomatoes, the parliament has no shame,” reads one of the posters in reference to a popular meme. Image by IndustriALL Global Union/Flickr.

The preservation of the rule allowing subsistence farmers to burn up to 2 hectares (5 acres) of land, the cheapest way to clear it for planting, runs counter to an agenda long pursued by palm oil and paper industry lobby groups, which in 2017 asked the nation’s highest court to strike down the provision, arguing that fires set by farmers often spread into corporate plantations.

The same goes for another rule holding plantation companies “strictly liable” for fires that occur in their land concessions, which was watered down in last week’s version of the law but essentially restored in the document that emerged this week.

Other of the latest changes, however, may work in the opposite direction.

The Oct. 5 version retained the essence of a provision in the 2014 Plantation Act requiring investors to develop 30% of their land concessions within three years and 100% within six years, or risk having the land deemed as “abandoned,” seized by the state and given to another firm. The rule, seen as a safeguard against land banking, where speculators stockpile huge tracts of land they have no intent to immediately put to lose, was deleted in the initial version of the bill that circulated in February, but last week’s version, spanning 905 pages, actually made it more stringent, changing the first requirement from three years to two.

In the newer, 1,035-page version of the law, however, the rule, while vaguely worded, appears to be softened so that companies must only break ground on their concessions within two years to avoid losing their rights. Any mention of percentages has been completely removed.

The Oct. 5 version also requires the central government to consider nine different factors when determining the maximum and minimum size of plantations that may be permitted in a specific region. The Oct. 12 version reduces that to just two criteria: crop type and availability of land that fits the climate.

That means Jakarta will not have to weigh social and environmental factors such as population density, geographical condition and zoning plans, according to Achmad Surambo from palm oil industry watchdog Sawit Watch.

“If [the government] only takes into account these two factors, then a region can be dominated with a single crop that’s popular in the market at the moment,” he told Mongabay. “This is similar to what’s happening now with oil palm, which can highly dominate [the plantation industry in Indonesia].”

An oil palm estate on the island of Sumatra. Image by Rhett A. Butler/Mongabay.
An oil palm plantation on Indonesia’s main western island of Sumatra. Photo by Rhett A. Butler for Mongabay.

Other provisions in the omnibus law affecting the plantation sector remain substantively unchanged between the two versions.

Both versions amend Articles 67 and 70 of the 2014 Plantation Act to be more lenient to companies in terms of penalizing them for failing to keep firefighting equipment on hand.

Both versions delete Articles 105 and 109 from the plantation law, removing the threat of criminal sanctions for businesses that, respectively, operate without a permit and fail to complete an environmental impact assessment.

Both versions remove Article 18 of the 1999 Forestry Act requiring at least 30% of each watershed and/or island area be maintained as forest area.

And both versions introduce a policy under which businesses operating illegally in forest areas can continue their activities as long as they get the necessary permits within three years of the law coming into force — though even here, the Oct. 12 version is missing a clause from the Oct. 5 version that says the government can suspend the operations of those who fail to comply.

Neither GAPKI, the main lobby group for Indonesian palm oil producers, nor APHI, which represents pulp and paper companies, responded to a request for comment.

The rule letting farmers burn small plots of cropland provided they take certain precautions is enshrined in Article 69, paragraph 2 of the 2009 Environment Act. The initial draft of the omnibus bill, released in February, would have deleted that clause from the 2009 law.

The absence of the rule from the Oct. 5 version of the omnibus law may have been due to legislators simply forgetting to reinsert it, Reynaldo Sembiring, the executive director of the Indonesian Center for Environmental Law, told Mongabay. Recordings of parliamentary discussion sessions from before the vote show lawmakers agreeing to reinsert it, he said, so its brief omission seems unintentional.

But, he added, “for several articles, there are indeed insertions and substantive changes” between the versions circulated on Oct. 5 and Oct. 12.

“There’s a strong suspicion that there was further discussion after the plenary session was completed,” he wrote in an email. “To address this, the parliament and the administration should hold a public discussion.”

Bambang Hero Saharjo, an expert in fire forensics who often serves as the Ministry of Environment and Forestry’s chief expert witness in court cases against companies accused of causing fires, said he complained to the ministry when he learned the 2-hectare exemption had been deleted from the environment law, given that slash-and-burn agriculture is integral to many Indigenous cultures, though it often gets blamed for Indonesia’s near-annual outbreaks of wildfires and choking haze.

“They told me, ‘that was the old version,’” Bambang told Mongabay. “Now Article 69, paragraph 2 has appeared again. I’m still waiting for the version that’s been approved by the president.”

Indonesia’s legislative process allows for a maximum of seven working days between when the parliament and governing administration jointly agree to pass a law and when it’s submitted to the president for their signature, but that’s only to allow time for “human errors” such as typos to be fixed, according to Bivitri Susanti, a lecturer at the Indonesia Jentera School of Law and a researcher with the Indonesian Center for Law and Policy Studies.

“When this morning the parliament secretary-general confirmed that the 1,035-page version was the correct one, we could still see a difference of 130 pages from the one that circulated on October 5,” she wrote in a statement released to news outlets this week. “More than 100 pages is enough for a whole separate law!”

Yet another version of the law released on Oct. 12 runs 812 pages, but it appears to be identical to the 1,035-page version save for some formatting tweaks.

Banner: The canopy of an oil palm plantation in Indonesia. Image by Rhett A. Butler/Mongabay.

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