Broken Promise

By Jofelle P. Tesorio

WEST KALIMANTAN, Indonesia — Engineer P. Sihotang, the local plantation services officer in Sanggau, here in West Kalimantan, Indonesia, is a firm believer in oil-palm plantations.

“We can look at the figures to know how much money this sector provides,” he says, almost crowing. “It is much bigger than the budget given by the national government to the local government. It is not only the farmer who benefits from palm oil but also other sectors. It has a multiplier effect on society (like transportation and other business services).”

F. H. Supardi used to be a believer, too. But today the 60-year-old leader of one of the cooperatives organized by the state-owned PT. Perkebunan Nusantara (PTPN XIII) says, “The promise of palm oil has not happened. The farmers have already surrendered their lands and they cannot turn back time. If they could, they would not have accepted (PTPN’s proposal).”

Rupinus Arip Sumah, another oil palm farmer, says bluntly, “If they say that palm oil has improved our quality of life, that is bullshit!”

Indonesia is now the second largest palm oil producer in the world. It has made it clear it is eyeing the top spot, which is held currently by Malaysia. But residents here say this ambition has helped destroy their land and robbed them of their livelihood. They even suspect that the strange illnesses now afflicting many locals are somehow connected with the sprawling oil-palm plantations.

More than a decade ago, the Indonesian government turned to palm oil to help get the country’s moribund economy going again. At the time, it seemed like a good idea; palm oil, after all, was—and still is— an in-demand product. It is used in many everyday products, including paint, crayons, shortening, soap, and shampoo. It is also made into salad oil and cooking oil. Not surprisingly, the global palm-oil industry is a multibillion-dollar one. It also enjoys a world market that is ever growing. According to Data Consult, global consumption of palm oil in 1998 was 17.7 million metric tons, up by 22 percent from the 1994 figure. By 2012, predicts Data Consult, palm oil could be the most consumed and traded vegetable oil in the international market.

Planting hopes
By the time the PTPN approached the Dayak Hibun tribe living in the village of Empirit in Sanggau, the company was already managing 58,047 hectares of oil-palm plantations in West Kalimantan. According to the Dayak – one of the original settlers here — the PTPN said 150 families from the village could be part of the plan and would have their own mini plantation of sorts. The catch was they would have to first give up their land to the PTPN. The nearby forest on which they depended for their daily living would also be cleared. But the company promised compensation for any plant growing on Dayak land. It also said it would provide houses for those who joined the scheme.

Ignacius Yus Ali says only 90 Empirit families eventually became part of the PTPN plan. The rest were outsiders, he says, although some were Sanggau local officials and policemen.

The 50-year-old respected village elder was among those who gave up their lands and moved to the houses built by the PTPN on the hillside. But like the others, Yus Ali and his family soon returned to live near the river, the same place where their old homes used to be, because of the poor water system in the company estate.

Today, Yus Ali blames the plantations in Empirit for the death of their river, aside from the general degradation of their land. When forests are cleared, soil erosion is unavoidable because the peak of the soil runs off to the river and streams. “Funding Forest Destruction,” a report prepared by AIDEnvironment, Telapak, and Contrast Advies, also says that as much as 15 million tons of palm-oil effluents are generated to produce six million tons of crude palm oil. In 1999, Indonesia’s crude-oil production reached 5.6 million tons. It generated as much sewage as that of one-tenth of the country’s entire population.

Yus Ali recalls that in the past, “we could even see the fish in the river.” But wastewater from the plantation’s factory has since polluted the water, which is now brackish and oily and hardly fit for even a bath. “Urine,” says Urbestus P., another Dayak, “is better than the water here.”

The rainforest in the area is gone as well, cleared years ago to make way for the plantations. According to a December 2002 World Wildlife Fund report, some 2.6 million hectares of rainforest across Indonesia have been converted to oil-palm plantations since 1985. If the trend continues, environmentalists say, the world will lose many species of diptecarp trees and other plants, along with some animals, such as the clouded leopard, sunbear, and Sumatran rhinoceros that thrive especially in the country’s rainforests.

Paltry earnings, rising debts
For the Dayak in West Kalimantan, the loss of their forests has meant the loss of a traditional livelihood source. The Dayak used to gather rattan and resin from the forests, and counted on many of the plants there to make their traditional medicine.

Many of them also planted rice. But they cannot do that anymore, having given up their land for the promises of palm oil riches. Unfortunately, while crude palm oil fetches about Rp3,000 (about 33 U.S. cents) per kilogram, a farmer usually gets only Rp400
(four cents) per kilo of the fresh fruit. The companies do not buy the fruit direct from the farmers, but courses purchases through cooperatives that they set up. Representatives from a farmers’ association usually sit in the committee that controls the prices, but Supardi says they wield no real clout. “They’re like an audience,” he says.

Unable to get a good price for their oil palm harvest, the farmers have found themselves deep in debt as well. The Dayak in Empirit, for example, were told they owed the PTPN as much as Rp11 million ($1,222) just when they were starting to plant the oil palm trees. That has since grown to Rp30 million ($3,333), including interest. Yus Ali says some company personnel told him the amount was for land clearing and preparation, seeds, the maintenance of the palm oil trees until these produced fruit, and fertilizer—– as well as for housing and insurance. Laments Yus Ali: “Every year, there is a different credit scheme that we could not understand.”

As early as 1994, the Dayak Hibun had begun to suspect that something was not exactly right.  They filed suit against the PTPN for compensation of the lands that it cleared, as well as those that were surrendered by villagers like Yus Ali. They lost the case in the lower court and in the high court in Kalimantan. The case reached the Supreme Court, where it has been gathering cobwebs.

Unhealthy and unsafe work environment
Since the conversion of their forests and land into oil-palm plantations, the Dayak have also noticed that many of them have been falling ill from diseases that are largely unfamiliar to them. The children have proved especially vulnerable, with many suffering from scabies and other skin diseases. The animals they raise for food and profit, such as chickens and pigs, now also seem to be more prone to a sudden surge of intense body heat—much like a heat stroke, the Dayak say, but not quite that. (The tribe calls the affliction sampar.)

The villagers believe the dirty water has something to do with their (and their animals’) health problems. There are some NGO workers who think the same, citing chemicals that may be present in the water. But merely working in the plantation could itself be the culprit, since harmful pesticides and fertilizers – loaned by the plantation company — are sprayed on the trees and the farmers are usually without protective gear.

In nearby Malaysia, a women’s organization has come out with a report that says 90 percent of exposure to pesticides occur through the skin. Studying more than 30,000 women hired in oil-palm plantations as sprayers of pesticides and fertilizers, the group found workers suffering from fatigue, back pain, severe headache, nausea, giddiness, chest pains, and swelling breasts, which are among the most common symptoms of exposure to organophosphate and carbarnate type of pesticides.

Among the Dayak Hibun here, however, taking care of the oil-palm trees is a family affair. Men, women, and even children work together to ensure a good harvest.

Tjanhyo Dwi Ariantono, an investor relations officer of the Astro-Agra Lestari Tbk, acknowledges that oil-palm plantations have spawned “problems with the environment.” But he says his company, one of the biggest in the Indonesian palm-oil industry, has taken the initiative to find some solutions to those problems.

For one, he says, Astra is now using organic fertilizers. For another, the company, which Ariantono says is aiming for zero-pesticide use, has taken to breeding natural predators, including barn owls to go after the rats that destroy fruit-laden tree branches. Ariantono says the program has already produced quite a number of owls, and the company is giving some away to other plantations.

Unlike Astra, the PTPN, which keeps a posh main office in Pontianak, West Kalimantan, declined to be interviewed for this story. But its 2001 annual report does say that its mission is to help develop the community through small-scale business and cooperatives. Among its priorities, at least on paper, are improving social facilities and aiding NGOs looking after the welfare of the community within its estates.

Even without the use of pesticides, however, work in palm-oil plantations is backbreaking and dangerous. Oil-palm fruits grow alongside thorny fronds 12 to 15 feet above the ground. Pickers use heavy poles to reach the fruits, and they are likely to be cut by the fronds that fall down as well. And when the fruits are picked, the thorns can be lodged permanently in the pickers’ hands, causing constant irritation and infection.

Legislating change
Convinced that palm-oil plantations posed more problems than they offered benefits, more than 40 Indonesian NGOs in July 1998 formed the Sawit (Palm) Watch. Since then, more NGOs have pledged their support for the struggles of local and indigenous peoples against large-scale oil-palm plantation companies. They have also promised to continue campaigning against the International Monetary Fund and the World Bank’s sectoral adjustment for liberalizing oil-palm plantations and to raise public awareness at local, national, and international levels on the adverse social and environmental impact of oil-palm plantations.

These days, NGOs are busy lobbying for the passage of the Natural Resources Management Act, a proposed law that they hope would address many of the problems related to the environment. They expect strong opposition from the Ministry of Mining and Forestry and business giants benefiting from the current set-up, but they hope that with the help of progressive legislators, the bill would become law.

It remains to be seen, though, if it would be enough to curb the rapid deforestation of Indonesia that has been blamed partly on two particular laws: one on decentralization (Law No. 22/1999) and the other on fiscal balancing (Law No. 25/1999). In the paper “Shifting Power to the Periphery,” Ida Adu Pradja explains that these laws transferred authority regarding forest resources to regional governments, which also gained an increased share of the revenues derived from forestry. Yet while article 2 of the decentralization law provides legal basis for the transfer to regional governments authority over all sectors of governance, Pradja notes that among the exceptions it cites are the use of natural resources and conservation. Thus, asserts Pradja, “in the areas of natural resources, these two articles can be interpreted as contradictory and ambiguous.”

The scholar is not the only one with this view. In a Jan. 27, 2003 article, the Jakarta Post quoted forestry ministry official Lumisu Mangiwa as saying that the problem had become the subject of dispute between his ministry and local governments. The ministry had banned the issuance of forest concession licenses in order to rehabilitate destroyed natural forests, but local governments had refused to comply, claiming their right over the use of forests.

The real beneficiaries
Yet to Y. Th. Donatus Djaman, local district representative in Sanggau, this debate should not even be included in discussions over the good and bad effects of palm-oil plantations. To Djaman, it is clear that the authority of control over the palm-oil industry remains with the central government, which also gets the bulk of the tax revenues from palm oil. “The central government devolved the authority to the local government, but it (the local government) actually has not authority to tax the palm-oil business,” he says.

Djaman says local governments get only a small share of the profits in the form of yearly allocations. “It is not clearly indicated where (these come) from,” he says. “It is not fair to the local community who gave up their lands but…are not well compensated. They also do not get the opportunity to improve their welfare because payment for the utilization of land for palm oil is very low.”

Aside from the central government, large companies, many of them Malaysian, haul in much of the largesse from the palm-oil industry. So big are the profits that the companies do not blink at investing hundreds of millions of dollars in palm oil. The Malaysian firm Kumpulan Guthrie Berhad, for instance, paid some $368 million for 25 plantations covering more than 260,000 hectares in Sumatra, Kalimantan, and Sulawesi. According to its chief executive, Tan Sri Datuk Khalid Ibrahim, the company would invest about $100 million more over the next two years to increase the output of its palm-oil operations in Indonesia.

Djaman, though, says he would rather not see any new investments for palm oil in Sanggau. He says that the existing plantations have just “brought a lot of problems.”

At least the Dayak Hibun still have their traditional dances to lift their sagging spirits from time to time. But they no longer hold festivities such as thanksgiving celebrations for bountiful harvests. To them, these no longer make sense.

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