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Report: Half of plantations in Indonesia’s palm oil heartland are illegal

Oil palm plantation in Riau, Sumatra, Indonesia. Image by Rhett A. Butler/Mongabay.

  • Nearly half of plantations in Riau province, Indonesia’s palm oil heartland, are illegal, according to a new report by the Eyes on the Forest, a coalition of NGOs based in Sumatra.
  • With the illegal plantations spanning 2.52 million hectares (6.23 million acres) of land — an area nearly the size of Hawai‘i — Riau is home to more than half of illegal oil palm plantations in Indonesia.
  • EoF has called on the government to focus its amnesty program, which gives operators of illegal plantations a grace period of three years to obtain the proper permits, in Riau.
  • It has also called for greater transparency in the amnesty program to avoid corruption in the process.

JAKARTA — Nearly half of oil palm plantations in Indonesia’s Riau province, the heartland of the commodity’s production, is illegal, according to a new report.

The report was published by a coalition of NGOs based in Sumatra called Eyes on the Forest (EoF). Using spatial analysis of Riau’s palm oil landscapes, based on government maps and a 2020 map compiled by WWF, it found 5.41 million hectares (13.37 million acres) of land planted with oil palm trees across the province.

Of these, 47%, or 2.52 million hectares (6.23 million acres), are in areas designated by the government as forest — which, under a 2013 law, is supposed to be off-limits to activities like oil palm cultivation and mining.

The majority of these illegal plantations, 91.3%, are established in forest areas zoned for production (logging and other forestry activity), while the rest are in conservation and protected areas.

The government has identified 3.37 million hectares (8.33 million acres) — or an area the size of the Netherlands — of illegal plantations in Indonesia, the world’s biggest producer of palm oil.

The new finding makes Riau home to the largest expanse of illegal plantations in the country, with more than half of them found inside the province. That should make Riau a priority in the government’s efforts to tackle the issue of illegal plantations, according to Nursamsu, the EoF coordinator.

“If Riau can be solved, then the same issue in other provinces could be easily solved,” he told Mongabay.

The government plans to legalize these plantations under a sweeping amnesty program introduced under the so-called omnibus law on job creation in 2020. The scheme would give the operators of these illegal plantations a grace period of three years to obtain the proper permits, including the official rezoning of their operational area to allow palm cultivation, and to pay the requisite fines, allowing them to resume their operations.

Activists are calling for the government to process these illegal plantations in a transparent manner, one that involves the public, to prevent corruption as the three-year deadline for companies to obtain amnesty draws near.

Illegal forest clearingfor oil palm in Riau Province. Photo by Rhett A Butler
Illegal forest clearing for oil palm in Riau Province. Image by Rhett A Butler/Mongabay.

Big players involved

To identify the characteristics of these illegal plantations, the researchers looked at 46 plantations in forest areas in detail.

They found half of the 46 plantations to be illegal and relatively mature, ranging in age from 10 to 35 years. They also identified some big companies as the owners of these plantations, including Sinarmas, Darmex, Surya Dumai and First Resources.

If these plantations end up winning amnesty from the government, their owners should do their utmost to rehabilitate degraded parts of their concessions, EoF said.

The restoration of ecosystems in oil palm landscapes within forest areas would help Indonesia achieve its emissions reduction target, said Boy Even Sembiring, director of the Riau chapter of the Indonesian Forum for the Environment (Walhi).

EoF also called for greater transparency in the amnesty program.

Under the program, there are two types of plantations that qualify for exemption: those with the relevant licenses from local authorities but not from the national government, known under the program as 110a applicants; and those without permits from either the local or national governments, known as 110b.

110a plantations can win permanent legalization by paying fines and applying for and obtaining a rezoning license, also known as a forest release decree, from the Ministry of Environment and Forestry. However, 110b companies, which must also pay fines, can only continue operating for one more crop cycle, or up to 15 years. Plantations located in protected or conservation forest areas can’t be amnestied and the land will be immediately taken over by the ministry.

Nursamsu of EoF said it’s likely that companies would prefer being categorized as 110a, rather than 110b, as it would mean permanent legalization. But lack of transparency around the program means the public doesn’t know whether plantations that should be in the 110b category are being legalized under 110a rules.

To be categorized as 110a applicants, companies would have to have their concessions located in areas that are zoned for plantations in the local spatial plans, as well as have the necessary permits from the local government. Yet the EoF report found 32,138 hectares (79,415 acres) of the 46 investigated plantations are located in areas not zoned for plantations under Riau’s provincial spatial plans.

As such, these plantations shouldn’t be processed as 110a applicants, Nursamsu said.

To ensure that the owners of illegal plantations are being processed accordingly, the government needs to disclose detailed information on illegal plantations and their owners to the public, he added.

“We should’ve been given access [to the information] so that we know which companies are in forest areas. This way, the public can assess which companies should be processed as 110a applicants, and which ones are 110b applicants,” Nursamsu said.

The deadline for plantation operators to apply for the amnesty program is Nov. 2, 2023. As of early 2023, a total of 237,511 hectares (586,902 acres) of plantations have effectively been legalized under the program.

As of the end of 2022, the government had also identified the owners of another 543,411 hectares (1.34 million acres) of illegal plantations, including 616 palm oil companies.

While the amnesty program provides an opportunity for companies to have their plantations legalized, not many companies are rushing to get pardoned, according to Hariadi Kartodihardjo, a lecturer in forestry policy at the Bogor Institute of Agriculture (IPB).

“We thought [there would be greater demand for] the amnesty program, but they don’t even want to get pardoned,” he told Mongabay.

Prior to the 2020 amnesty program, the government had previously introduced two similar programs between 2012 and 2020. These amnesties all give the violating companies a grace period to apply to have the land redesignated as nonforest area, or for a forest land swap. The latest one in 2020 is the most lenient one.

Hariadi said that even when given two opportunities in the past, companies didn’t use them. This might be because companies that own illegal plantations believe there would be no repercussions for them to continue operating illegally, he said.

“What big plantations don’t have the military and high-ranking officials behind them” to protect them from law enforcement, Hariadi said. “So companies are more confident in this support than in following the rules.”


Banner image: Oil palm plantation in Riau, Sumatra, Indonesia. Image by Rhett A. Butler/Mongabay.


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