Villagers face off against palm oil firm’s bulldozers

Villagers in Indonesia’s East Kalimantan province are squaring off against a palm oil company’s bulldozers in an ongoing land rights dispute which some observers fear may spill over into violence.

Cleared land at Muara Tae (c) EIA/Telapak

PT Munte Waniq Jaya Perkasa has moved into the forests around Muara Tae, a village in West Kutai, and has started clearing land for conversion to palm oil production, backed by the police and other security personnel alleged by witnesses to be out-of-uniform military.

Sources report that the firm’s bulldozers have been clearing approximately five hectares a day for the past week. With the situation at crisis point, the Environmental Investigation Agency (EIA) and its Indonesian partner Telapak fear the conflict could spill over into violence.

Benuaq girl and ncap payang tree (c) EIA/Telapak

The clearance follows directly on the heels of a formal change in the corporate ownership of the company. On October 31, 2011, TSH Resources, a palm oil and timber-focused holdings group in Malaysia, purchased 100 per cent of the shares of Halaman Semesta Sdn Bhd (‘Halaman’). In doing so, TSH Resources became the owner of 90 per cent of PT Munte Waniq Jaya Perkasa (see TSH Resources documentation here).

The speed of the clearance at Muara Tae strongly suggests TSH Resources has upped the ante and authorised rapid plantation expansion to proceed, regardless of ongoing conflict.

This change in corporate ownership drags Norway into an escalating land-grab stand-off symptomatic of the land tenure issues blighting Indonesia’s forestry sector and threatening the success of the REDD+ initiative to combat deforestation, of which Norway is a leading champion.

As of December 2009, Norway’s Government Pension Fund Global (GPFG) held 24.2 million Norwegian Kroner (NOK) worth of shares in TSH Resources, giving Norway 1.77 per cent of the company; during 2010, Norway actually increased its stake in TSH Resources to 1.8 per cent, valued at 39.8 million NOK.

During the past year, EIA has been pressing Norway to address the serious conflicts of interest generated by GPFG’s financial investments. Muara Tae is a stark case in point, with GPFG having ethically compromising investments in the activities of the very firm carrying out deforestation.

The 638 hectares of forest to which PT Munte Waniq Jaya Perkasa has laid claim is disputed land – a major cause of the conflict has been the failure to recognise traditional ownership of the forest land, which has been used for generations by the indigenous Dayak Benuaq people.

For the past 10 months, Muara Tae’s residents have tried to protect their ancestral lands by building a guard station, mapping the boundaries and creating a seed nursery to help preserve their forests.

Villagers on cleared land at Muara Tae (c) EIA/Telapak

According to Telapak, PT Munte Waniq Jaya Perkasa appears to hold a valid Commercial Plantation License (Izin Usaha Perkebunan). However, the company does not yet have a Commercial Usage Right permit (Hak Guna Usaha) issued by the National Land Agency (Badan Pertanahan Nasional, or BPN) putting a question mark over the company’s right to use the land commercially.

Telapak is actively supporting the struggle of the local people to resolve the conflict and is seeking to work with the BPN to accommodate the community’s land claims in any final permit.

The case is a sharp reminder of the urgent need for the Government of Indonesia to deliver on its professed aim to prioritise the rights of forest-dependent communities. At a speech in Lombok in July, Kuntoro Mangkusubroto, head of the Indonesian President’s Special Delivery Unit, announced the Government’s intention to “recognise, respect and protect Adat [customary] rights”.

Kuntoro, who also heads Indonesia’s REDD+ Task Force, said the Government must accelerate the legal delineation of Indonesia’s forest areas in a way which guarantees the recognition of customary land rights. The uncertainty of legal tenure has stoked conflicts throughout Indonesia, as in Muara Tae, which continue to simmer as Indonesia’s forest communities wait for the wheels of reform to turn.

Much of the forest area around Muara Tae has already been cleared for palm oil plantations and coal mines, leaving it effectively a forest oasis.

In the mid-1990s, the coal mining company PT Gunung Bayan Pratama Coal started exploration and exploitation, and is still operating. In 2007, palm oil plantation company PT London Sumatera began operations, and last year PT Borneo Surya Mining Jaya arrived. Now PT Munte Waniq Jaya Perkasa has joined the scramble for the last forests in the area.