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Oil palm growers’ misdeeds allow an opportunity to save West Papua’s forests

Indonesian New Guinea is home to species like this Sulphur-crested Cockatoo (Cacatua galerita). Photo by Rhett A. Butler.

Indonesian New Guinea is home to species like this Sulphur-crested Cockatoo (Cacatua galerita). Photo by Rhett A. Butler.

  • An area of forest two and a half times the size of London sits inside oil palm concessions in Indonesia’s West Papua province but can still be spared from being cleared, a government review indicates.
  • Clearing the forest to plant oil palms would release the equivalent of two-fifths of Indonesia’s total annual greenhouse gas emissions, which is why leaving it intact is important, according to experts and local government officials.
  • The concession holders have been prevented from developing the land because of a lack of permits and a litany of administrative and legal violations, according to the government review.
  • This gives local authorities leverage to win back control of the concessions from the companies on administrative and procedural grounds, although officials say the process could take at least a year, even if the companies relinquish the land voluntarily.

JAKARTA — A government review has identified a massive area of forest in Indonesia’s West Papua province that has been earmarked for oil palm plantations but that can still be saved. Keeping this forested area standing could potentially prevent the release of greenhouse gases equivalent to two-fifths of Indonesia’s total annual emissions, experts say — if the concession holders can be made to relinquish their hold over the land.

Twenty-four palm oil companies control a combined 576,090 hectares (1.42 million acres) of land in West Papua, of which 383,431 hectares (947,479 acres) — an area two and a half times the size of London — is intact forest. A recently concluded government review of oil palm license holders has determined that this area remains untouched because of a litany of administrative and legal violations by the companies that prevents them from clearing the forest and starting to cultivate oil palms.

This forested area holds an estimated 185.5 million tons of above-ground carbon dioxide, according to Arief Wijaya, the climate and forests senior manager of the think tank World Resources Institute (WRI) Indonesia. That’s equivalent to nearly 40% of Indonesia’s total emissions in a year.

“Saving these 383,000 hectares of intact forests in Papua is significant in reducing emissions,” Arief told Mongabay. “If it can be done, then it could strengthen the achievement of reducing deforestation, our climate target, as well as supporting the commitment of the government of West Papua in conserving 70% of its area.”

West Papua Governor Dominggus Mandacan echoed the need to save the forests.

“We will push for the lands that can potentially be saved based on the result of this license review to be managed by Indigenous people with sustainability principles,” he said as quoted by local media.

Forest in West Papua. Photo by Rhett A. Butler
Forest in West Papua. Image by Rhett A. Butler/Mongabay.

Taking back the land

The recent license review, carried out by the West Papua government working with the national anti-corruption agency, or KPK, found 13 of the 24 concession holders had not yet started operating on the ground. It found most of the companies in violation of laws and regulations on permits and taxes, among other things.

The findings are in line with a 2019 government audit of the palm oil industry, which found more than 80% of plantations in Indonesia, the world’s biggest producer of the crop, violating numerous regulations, such as by encroaching into protected areas and failing to comply with national sustainability standards.

In the case of the West Papua concessions, the companies’ violations give local authorities leverage to win back control of the concessions and prevent them from being cleared.

Some of the companies have already stated their willingness to relinquish a combined 52,151 hectares (128,868 acres) of their concessions, according to Benidiktus Hery Wijayanto, head of the West Papua provincial agriculture department.

“So there are official written statements from the heads of the companies to return [the concessions] to the state due to various reasons,” he told Mongabay. “Maybe because the concessions are swamps, or it’s economically not viable to continue [cultivating those areas].”

Then there are 224,044 hectares (553,625 acres) of concessions, including 162,940 hectares (402,634 acres) of forest, for which the companies don’t have what’s known as a right-to-cultivate permit, or HGU — the last in a series of licenses that oil palm companies must obtain before being allowed to start planting.

And because the companies can’t legally cultivate them, these areas effectively become “dead concessions” that the government can demand the companies relinquish, Benidiktus said.

But that won’t be easy, as many of the companies seem determined to hold on to the land in anticipation of obtaining an HGU permit, Benidiktus added.

“We asked one by one, and many of them said they still wanted to continue [trying to develop the concessions],” he said. “But there are those whose location permits have been extended yet there’s still no [planting] activity. So we deem their licenses can be revoked administratively because there’s no planting at all.”

Even if the companies aren’t willing to give up their concessions, the government will cite the findings of violations from the recent government review to justify revoking any licenses they hold, he added.

“Of course it’s going to be a bit tough,” Benidiktus said. “But during a recent meeting with district heads, they said they’re ready to revoke [the licenses].”

If this effort fully succeeds, along with the voluntary relinquishing by companies, the provincial government will be able to take back control of a combined 276,196 hectares (682,495 acres) of land and prevent the remaining forests in them from being cleared.

“That’s the short-term target in two months,” Benidiktus said.

Map of West Papua province (bright green). Photo courtesy of Bwmodular/Wikimedia Commons.

Targeting violating companies

There’s also a longer-term plan to go after the 11 concession holders that do have HGU permits. These companies hold a combined 174,845 hectares (432,051 acres) of concessions, of which about 41% has already been cleared and planted with oil palms.

That still leaves 103,423 hectares (255,564 acres) of the native land still standing. Benidiktus said these areas could be construed as “abandoned lands” under plantation regulations, which require that concession holders cultivate their full area within a given time period or risk having their licenses revoked. The regulation is meant to prevent companies obtaining concessions for land speculation purposes.

These HGU license holders have also been implicated in other violations, such as failing to allocate 20% of their concessions for smallholders, or planting before obtaining the HGU license. In some cases, the forest conversion permits allowing a forested area to be zoned for a plantation were issued long after the deadline.

“The forest conversion permits are supposed to be issued within two years since the principle permits are issued,” Benidiktus said. “There are forest conversion permits issued five years after that.”

Some of the companies can also be cited for tax dodging, he added. Of the 71,422 hectares (176,488 acres) of planted concessions, the companies only paid taxes for 18,000 hectares (44,500 acres), according to Benidiktus.

All these violations, he said, show the scope of the problems plaguing the oil palm industry.

“Can you imagine, from more than 500,000 hectares of concessions, the ones that already have HGU permits are only 170,000 hectares. And the ones that are taxed are only 18,000 hectares,” he said. “What does the state get [in revenue]?”

Given all these irregularities and violations, he said, it’s possible that district governments can revoke these companies’ licenses, although it will be more difficult than for the companies without HGU permits. For this scenario, the government is looking at up to a year to win back the concessions, Benidiktus said.

Interior of an oil palm plantation in Indonesia. Photo by Rhett A. Butler.
Interior of an oil palm plantation in Indonesia. Image by Rhett A. Butler/Mongabay.

Greater scrutiny of industry

Benidiktus emphasized the need for an action plan to determine what to do after the licenses are revoked.

“If the licenses are revoked by the district governments and then given to other investors, there’s nothing wrong with that, legally speaking, but we don’t want to fall into the same pit,” he said. “What will the management scheme for the 270,000 hectares of forested concessions that will be returned [to the state] look like? They can be managed as ancestral lands, customary villages, or other social forestry schemes.”

The review team led by the West Papua government and the KPK also issued recommendations to other government agencies regarding the many problems in the palm oil industry. Benidiktus said the national land agency, or BPN, has been asked to look into what to do with undeveloped concessions, while the tax office has been asked to boost its scrutiny of state revenue from plantation.

“We will work together with the tax office so they are more assertive about collecting taxes,” Benidiktus said. “For instance, imagine a company with a plantation permit for 10,000 hectares that only reports taxes for 3,000 hectares. The tax office shouldn’t be doubtful [about pursuing it] because we will give it the data.”

Benidiktus said none of these measures were intended to harm the palm oil industry.

“It’s more for the improvement of the management [of the industry], and it’s actually for the benefit of the country because the tax revenue [at present] is not good,” he said. “Like it or not, palm oil’s contribution to the country is huge.”

A tree frog in the Arfak Mountains. Image by Rhett A. Butler/Mongabay.

Gaining elusive data

Regardless of whether the findings from the license review are followed up with concrete actions, they have at least unearthed problems and uncovered data that had previously been buried under red tape, Benidiktus said.

He cited the data on HGU licenses, which include details such as land boundaries, coordinates, the area of the concession, as well as the license holder’s identity. These data were elusive, even for his office, prior to the review process, Benidiktus said.

“In the beginning, it wasn’t easy to obtain the HGU data from the land agency. When we asked, we didn’t get it. But after the KPK came into the picture and they united our perceptions, all the data were handed over [by the land agency],” he said.

The review team also struggled to collect other data that were scattered across different government agencies, Benidiktus said.

“We had to collect all company data, both hard copies and soft copies,” he said. ”We also had to collect maps in shapefile formats, but it turned out that the district governments didn’t have them. They only had the names of the companies and their locations, but they didn’t have the details.”

Even identifying the contact persons in each company was a struggle, he added.

“That’s why it took us two years [to finish the review],” he said, “because we had to collect the data one by one, from location permits, to plantation business permits, to forest conversion permits, to HGU permits.”


Banner image: Indonesian New Guinea is home to species like this Sulphur-crested Cockatoo (Cacatua galerita). Image by Rhett A. Butler/Mongabay.


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