LARGE-SCALE PALM OIL PLANTATION DEVELOPMENT,
CUSTOMARY LAND ACQUISATION AND LOCAL PROTESTS:
An Experience of West Sumatra, Indonesia
1By: Dr. Afrizal
2INTRODUCTION
Having inherited poor economic condition from Soekarno's government, led by Soeharto, the New Order regime attempted to achieve high economic growth by implementing its five-year development plans begun in early 1970s. For this, the New Order government stimulated investment in which two important policies were implemented: Firstly, the state itself invested in resource-based industries in rural areas (Bowie and Unger 1997, pp. 49-52); Secondly, the concentration on inviting foreign capital was intense, and this made the Indonesian state at that time “really became a foreign investor’s paradise” (Taylor 1974, p.18).
Then, the decline of revenue from oil brought about tremendous development in agricultural sector. This is because the New Order government endeavoured to find alternative sources of income, one of them was in the field of agro-industry (Fauzi 1999, pp.162-186), in this case, the government viewed agriculture as “a major catalyst for economic development” (Kuntjoro-Jakti 1981, p. 42). To increase the contribution of agriculture to the national economy, apart from efforts to grow rice/food production, export-oriented agricultural products such as rubber, palm oil, coffee and tea were developed (Langill 1978, p. 184). Palm oil plantations are the most important one, which recently has grown dramatically both in terms of the area of plantations and number of large-scale palm oil plantation companies.
Based on an intensive study in West Sumatra3 and focus the attention to the process of land acquisition, this article will shows that the development of large scale plantations has serious implications for local people in the region. The process of land alienation lacked recognition and respect of customary rights (hak ulayat)
1 Paper presented at “Seminar Antarbangsa Tanah: Keterhakisan Sosial dan Ekologi-Pengalaman
Malaysia dan Indonesia, Dewan Bahasa dan Pustaka, Kuala Lumpur 4-5 Desember 2007. 2 Graduated from the Asia Centre of the Flinders University and now is a senior lecturer at the
Department of Sociology Fac. of Social and Political Sciences, Andalas University.
3 The data used for this paper are my research findings in West Pasaman District, which is a centre
by the governments and businesses took advantage of this and, therefore, they also did not respect local people’s customary rights. This brought about local people lost their customary land and conflicted with palm oil companies.
THE TREND OF PALM OIL PLANTATION GROWTH IN INDONESIA
Although palm oil plantations have existed in Indonesia since 1911, there was a new phase of development after 1940 although by that year it was already one of the important crops in the country. Great need for palm oil in Europe4 brought about remarkable increase in the size of palm oil plantation areas in Indonesia. It was only 1.2 thousand hectares in 1916 and increased little to 109.6 thousand hectares in 1940, and even up to in 1978 the area increased only to 250,000 ha. But then, this increased dramatically to more than 2 million ha in 1998/1999. By 2004, it was reported about 4.1 million ha of land and in 2006 about 6.1 million ha of land were used for palm oil plantation but concentrated only in the Island of Sumatra and Kalimantan. Some 50% of them were controlled by private large-scale plantations. There were 170 palm oil estates recorded in 1985, which was number four after rubber, tea and coffee in that year. By 1999 the number of palm oil estates had jumped four-fold to 683 (Biro Pusat Statistik, 1985, p. 248 and 1999, pp. 208-9, Soetrisno et al. 1991, pp.72-75, PDBI 1998 in Basyar 1999, p. 35 and Colchester et al., 2006, pp. 21-22). This makes “Indonesia now leads the world…and set to become the number one palm oil producer overtaking Malaysia by 2010, or even earlier” (Colchester 2006, p. 25).
The incredible development of the palm oil plantations was related very much to the governments’ actions because it was the governments in Indonesia that had a major role in their development. The central and the local governments encouraged and facilitated their development. They provided the needs of investors to establish their large-scale palm oil plantations by issuing permits, allocating land and guaranteeing investors to be able to control land in long term by issuing long lasted Commercial Use Leases, HGU). It is important to look at why the governments encouraged and facilitated their development.
There was a rather populist idea behind the development of palm oil plantations. It was true that the development of palm oil plantations was seen by the central government as a tool for improving macro-economic performance for it can increase exports (Basyar, 1999, p. 49 and Bachriadi, 2001, p.229). But the development of palm oil plantations was also seen by the governments as a tool to improve local people’s economy. The provincial and district apparatuses also saw the development of palm oil plantations as fundamental for the improvement of local community economy (Afrizal 2005, pp. 112-113 and 2007, pp. 95-965). This can be seen from the fact that the governments attempted to prevent the large-scale plantation corporations’ monopoly on palm oil plantations, and wanted that local people had share in the plantations. For this, from 1974-1975 the governments introduced and applied a new mode of plantation production, the Nucleus Estate and Smallholder (NES) mode of plantations to improve the well-being of small farmers, (Soetrisno et al. 1991, p. 94-95), and even 1986 the Presient isued a decree to support this model (Asian Agri 2007). Under this scheme, a plantation consists of two parts: a nuclear estate that is the asset of big investors; and smallholder plantations (kebun plasma), which is the asset of small farmers (Soetrisno et al. 1991; pp. 95-96, Basyar 1999, p. 66; Fauzi 1999, pp.187-188 and Bachriadi 2001, p.239).
Both plantation investors and the state play significant roles in NES development. The former is responsible for developing of plantation smallholders (kebun plasma), improving the management quality of plantation smallholders and buying their palm oil fruits. The latter is responsible for recruiting recipients of the plantation smallholders, organising land for the plantation and providing loans for the development of the smallholder plantations6 (Soetrisno 1991, pp. 99-100). The recipients of smallholder plantations obtain three plots of land from the state: two hectares of plantation land; 0.75 hectares of land for farming and 0.25 hectares of land for settlement (Soetrisno 1991, p. 99).
5 Colchester at all (2006) in many pages of their book informs that for local governments in many
places in Indonesia palm oil plantations were viewed vital for local economy improvement. 6 The recipients of smallholder plantation pay back the loan to the government by instalments of
THE CASE OF WEST SUMATERA
West Sumatra Became A Centre of Large-Scale Palm Oil Plantations
Palm oil plantations were introduced to West Sumatra by the Dutch before independent with the first palm oil plantation, Ophier, was established in what now West Pasaman in 1934. It used about 1100 hectares of land, began to produce in the time of Japanese occupation but was destroyed during the second Dutch aggression of 1948 (Departemen Penerangan 1953, pp. 730-739). Then, in early 1980s the government of West Sumatra, supported by the West German Development Bank (KFW), developed the area as a palm oil plantation again. At this time, the Nucleus Estate and Smallholder (NES) mode of plantation production was introduced (Soetrisno et al. 1991, p. 104).
Local governments played a significant role in the development of West Sumatra became one of the centres of palm oil plantations. The local governments invited or facilitated investors to invest in West Sumatra. For example, in the middle of the 1980s the head of Pasaman District gave much attention to palm oil plantation development in the area by inviting private investors and providing the nagari community’s communal land for investors’ palm oil businesses (Singgalang 29 October 1989).7 The result of an interview with a local informal leader who was involved much with the development of palm oil plantations in Pasaman shows how it happened. Pak NJB, a 60 year old man who was a retired Haluan newspaper journalist living in Simpang Empat, knew much about the history of large-scale palm oil plantation development in West Pasaman. He remarked:
In the middle of the 1980s, after visiting the Ophier palm oil plantation that was run by PT. Perkebunan Nusantara VI, private investors came to Pasaman sub-district lineage leaders including Nagari Kinali to ask for land. The lineage leaders told them to approach the Pasaman state apparatus for this purpose. At that time, local lineage leaders were supportive to the investors. After that, the head of Pasaman District (Rajuddin Nuh) invited all the kinship group leaders of Pasaman sub-district including Nagari Kinali to
7 Information was also gained by interviewing a staff member of the Plantation and Agriculture
discuss agribusiness development in the region. The head of the district tried to persuade the kinship group leaders to provide their communal land for palm oil plantation development. He said that the development of the plantations would benefit lineage members. The head of the district said that they would be provided with plantation partnership by corporations as had occurred at Ophier plantation. Accordingly, the kinship group leaders agreed to provide their communal land for private investors.8
The other research’s findings confirmed this (see Colchester et al. 2006, pp. 132-133).
The West Sumatran government's policies to encourage and facilitate investors in palm oil plantation resulted in many large-scale (above 1000 ha) palm oil plantation companies (several of them with their own mills) operated in West Sumatra. Up to 2001, there were 41 companies operated in West Sumatra, controlled about 336,600 ha to 489,000 ha of land9, and more and more of them are owned by Malaysian investors recently10. Although the area of palm oil plantation in West Sumatra is only one-third of the area of the same plantations in Riau Province, this is number 4 in Indonesia after Riau, North Sumatra and Central Kalimantan (Colchester 2006, p. 24).
Palm Oil Plantations for the Improvement of Local Community's Welfare
The ideas behind the development of large-scale palm oil plantations in West Sumatra by inviting big investors were to improve local people's economic livelihood, besides, offcourse, to provide sources of revenue for the government. It was clear that local state apparatuses and the Province of West Sumatra viewed the development of palm oil plantations as crucial for the economic improvement of local communities11 (BAPPEDA Tingkat I Sumatra Barat and BPS Sumatra Barat 1983, p. 49). The contents of conversation between local government officials and local community members reveal this. For example, in 1989 the head of the Pasaman District, Rajuddin Nuh, said that the development of large-scale palm oil plantations in the region was designed to apply the Nucleus Estate and
8 Interview with Pak NJB, 7 May 2002, Simpang Empat.
9 Because of scarcity of land, only few new companies invested in palm oil plantations in West
Sumatera.
10 Personal communication with a number of representatives of Malaysian palm oil plantation
companies during my attendance at RSPO meetings.
11 In opposition some analysts argue that the development of large-scale oil palm plantations caused
Smallholder scheme in order that local people obtain benefit from the development of large-scale palm oil plantations. Quoting the head of the district, Singgalang news paper reported that “…investors must involve the local community by providing smallholder plantations, particularly to those whose land is utilised by the investors” (Singgalang 29 November 1989). When the Bupati attended the ceremony to mark the beginning of palm oil planting of a given grower he said again that the company must organise smallholder plantations for landholders (Singgalang 29 November 1989). The other study also confirms this with the researchers concluded their findings that “the Bupati of Pasaman said that the main goals of estates development was to improve the welfare and standard of living of the local population (Colchester et al., 2006, p. 133).
It can be concluded from the above discussion that in West Sumatra, palm oil plantations should have been organised in such a way that local people must obtain the advantage of the development of palm oil plantations. This is should be done by applying Nuclear Estate and Smallholding model. Local government officials labelled this model bapak angkat-anak angkat (step parents-step children model). What is meant is that local people be provided with smallholding palm oil plantations as part of the development of large-scale palm oil plantations owned by big investors. However, as will be discussed below the development of the large-scale palm oil plantations ignored local people’s rights, based on their customary laws, and this is contradictory to the aims of the development of large-scale palm oil plantations in Indonesia in general and in West Sumatra in perticular.
Unfair Processes of Customary Land Acquisition
1. Land Taken Over By Plantation Companies Without Landholders' Free Consent
Table 1. Local People’s Protests over Illegally Taken Land In Nagari Kinali
TR took their fish ponds by force. 70
Eight kinship group leaders Oct. 25 1996
Sources: 1. Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
2. See the letter of the Dewan Pengurus Daerah to DAN DEM POM 1/6 Sumatera Barat on 16 October 1997 (author given a copy of the letter from datuak BBS). 3. See the letter of the leaders of the farmer associations of Aur Serumpun and
Batang Lambau hamlets to the director of PT. PN VI on April 10, 2000.
4. Interviews with datuak BBS, 7 May 2002; ABMA, 25 April 2002; datuak MM, 27 April 2002; datuak LJN, 21 April 2002; and IMS, 7 May 2002, Nagari Kinali.
Unfulfilled Adat Requirement: Siliah Jariah
Companies did not make communal land improvement compensation because the need for this payment to be made was not identified at the time of the process of customary land acquisition carried out by the local government land alienation committee. As a result, the company management did not recognise the necessity of this payment (Afrizal 2005, p. 123-125, 2007, 105-107).
Unfulfilled Promised Schemed Smallholder Plantations (Kebun Plasma) as Compensation for Customary Land Provided12
Both the local government and plantation companies had promised customary landholders that they would gain schemed smallholder plantations in return for the their customary land they provided to the companies through local governments or directly to them. This was stated explicitly in the letters of communal land alienation (the land alienation transfer statements).13 For example, the letter of communal land alienation of nine kinship group leaders of Nagari Kinali stipulated that ‘based on providing land mentioned in the first point, the second party (the Bupati of Kabupaten Pasaman) has an obligation to organise the development of plantation in the form of step father and step child (smallholder plantations)’.14 The letters mention that about 60 to 70% of total land provided for investors by local landholders was for the nucleus estate of the corporations while 40 to 30% was for smallholder plantations.15 There was a different case of a palm oil company. Although, schemed smallholder plantations are not mentioned in the letter agreeing to transfer communal land to the company, both the Bupati of Kabupaten Pasaman and the management of the company had promised orally to landholders that they would be provided with the schemed smallholder plantation (Singgalang
29 November 1989).
12 A 2 hectares of palm oil plantation that is owned by an individual farmer but organized by an
estate.
13 See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communalland for PT. AMP, 9 April 1993, by two local kinship group leadersKinali for PT. AMP, 29 November 1994, by two kinship group leaders for PT. AMP, 22 May 1995, and by eleven kinship group leaders for KUD Harapan Kinali, 8 December 1994.
14 See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communalland for PT. AMP, 9 April 1993.
15 See the statement letters about nine kinship group leaders of Nagari Kinali providing their
However, as far as smallholder plantations are concerned, local communal landholders were neglected. The promised schemed smallholder plantations were not provided, while companies concentrated on their own estates. In certain cases, smallholder plantations were not developed at all, while local people provided land for this. In other cases, smallholder plantations were developed even produced, but these plantations are kept by companies.
Customary Land Became the State Land Without Local Landholder' Knowledge and Consent
In West Sumatra, the land that has been utilised by large-scale palm oil plantation corporations was the communal land of local people to which they have customary right based on Minangkabau customary laws. The communal land is called in local terminology as tanah ulayat or tanah kaum (for more information, read Afrizal 2005 and 2007). Local governments recognised this land tenured as hak ulayat or tanah ulayat of local people as this appeared in any land alienation agreement letters singed also by the head of the district (bupati).16 In general, the land was previously uncultivated and swamp located outside local farmland, but small part of the area taken over for plantations area was local people’s farm land.17
It appears that two patterns of land acquisition procedures had occurred, direct and indirect. The first consisted of land being directly alienated from local kinship group leaders to investors, formalised in a signed agreement letters and officially endorsed by the head of the sub-district (kecamatan) and the leader of .the Nagari Adat Council (KAN).18 The second or indirect procedure took place by ways of local governments through the Land Alienation Committee alienated customary
16 See for example the statement letters about kinship group leadersof NagariKinali providing their
communalland for PT. TR 5 July 1991; to PT. Arthasolid/PMJ, 22 May 1995; and to PT. INKUD, 4 December 1994 (see also Colchester et al., 2006, pp. 137-8).
17 For example, in the case of a company in a given nagari in West Pasaman District, about 87
hectares of land was former farmland of 130 households, part of 900 hectares of land claimed by a kinship group leader to the company used to be rice fields and 516 hectares of land claimed by the other kinship group leader was also farmland (Afrizal 2005, p. and 2007, p……).
18 See for example the statement letters about kinship group leadersof NagariKinali providing their
land of local communities from local kinship group leaders and then the local government provided the land to investors.19 In this case, the kinship group leaders provided their communal land to the head of the district, signing land alienation letters or agreement letters. The second procedure was the major way of the customary land alienation from local landholders to private investors in West Sumatra (Afrizal 2005 and 2007 as well as Colchester et al. pp. 129-165).
Local kinship group leaders’ understanding of the land alienation is that their customary land they provided to the local state and to palm oil plantation companies through both of the above two procedures was not a process of selling or transferring ownership.20 Therefore they believed that they had not in fact sold this land to the state or the companies or to surrender the ownership of the land21. To them, they allow companies to utilised their customary land but the ownership is still with them (For more information, read Afrizal 2005 and 2006).
However, the Indonesian state has different ideas without local people’ knowledge. They attempted to take over ownership and therefore right of control of customary land without providing adequate information to landholders, which were kinship groups. How can this happen? On request by the local government land alienation committee, kinship group leaders (niniak mamak) signed what were called
Surat Pernyataan Pelepasan Hak (Land Right Transfer Statements), declaring that the kinship group leaders agree to transfer their right over a plot of their customary land to the state in order that the state could issue Commercial Use Leases (HGU) to palm oil plantation companies.22 Without kinship group leaders’ knowledge, the singed Land Right Transfer Statements caused the kinship groups lost their ownership to the plot of the land. This happened because the singed Land Right
19 The committee consisted of Pasaman District officials led by the bupati.
20 Analysing six land alienation agreement letters for about 30,540 hectares of land signed by
kinship group leaders of Nagari Kinali for PT. TSG, PT. AMP, PT. PMJ and PT. INKUG Agritama, it was found that no references to purchasing and selling of land appeared in the letters (see the statement letters about kinship group leadersof NagariKinali providing their communalland for PT. TSG, 20 July 1990 and for PT. TR, 5 July 1991. Similar cases were also found in Nagri Tiku, Agam District (see the statement letters about kinship group leaders of Nagari Tiku providing their communalland for PT. AMP, 19 August 1983, 25 August 1991, 7 April 1993, 1 March 1994 and 19 September 1994).
21 Interviews with datuak BBS, 24 April and 7 May 2002; datuak LJN, 21 April 2002; and datuak MM, 27 April 2002, Kinali.
Transfer Statements were used by palm oil companies to apply for Commercial Use Leases (Hak Guna Usaha, Commercial Leases, HGU) from the Ministry of Agrarian affairs/Head of National Land Administration, with these letters being one of the considerations for issuing leases.23 Based on the letters, when issuing Commercial Lease certificate, the land was claimed as state land by the Ministry.24 They included the statement that it “…fulfilled requirements to gain HGU on the state land that was former ulayat land…”. This is further reinforced by the Ministry of Agrarian/Head of National Land Agency Regulation No. 5/1999 stipulating that only to cases where HGU was granted on alienated customary land after 1999 that it is excluded from the rules. This means that the alienated customary land on which a plantation company obtained HGU before 1999 is considered by the government as the state land.
This was one example of a more general policy of conversion of customary land being pursued by the government without the awareness of local landholders (For more information, read Afrizal 2005 and 2006). This was legitimised and facilitated by the central government in 1996 with its Law No 40/1996. According to this the Commercial Use Lease can be provided on non-land directly controlled by the state through the technique of rights transfer (pelepasan hak)25.
LOCAL CUSTOMARY LANDHOLDERS CLAIMED THEIR RIGHTS
As a result of unfair processes of customary land relinquishment and the unfulfilled promised schemed smallholder plantations, local customary land owners carried out overt protests against palm oil plantation companies and the state. Local people, in many cases kinship group leaders, protested to palm oil plantation companies to demand that the companies provide them with smallholder plantations.26 To mention few cases, from the beginning of 1993 to the end of 2002, ABMA and his kinship group members continued to ask a company to develop 100 hectares in a smallholder plantation with them.27 In June 1998, datuak28 MM and his 23 Interview with an official of Pasaman District BPN, April 2002, Lubuk Sikaping.
24 See for example, Keputusan Mentri Negara Agraria/Kepala Badan Pertanahan Nasional No. 37/HGU/BPN/94 about the HGU for PT. TSG.
25 See PP. (Government Regulation) No. 40/1996 on Commercial Use.
26 Interviews with datuak MM, 27 April 2002; two of datuak MM’S lineage members, 27 April 2002; datuak BBS,7 May 2002; datuak LJN, 1 April 2002; and a public relations officer of PT. TSG, 20 April 2002, Kinali.
kinship group members also protested demanding that the same company develop 900 hectaresof smallholder plantation29 while in the whole of 1998 some 20 kinship group leaders and members also asked the company’s management to develop 7000 smallholder plantation hectares.
In other cases local people protested against palm oil plantation companies and demanded that they transfer to them the smallholder plantation (kebun plasma) that had been developed by the companies and were already producing oil fruits.30 To mention few cases, in May 1997 and in December 1999, datuak BBS, acting as the vice head of the Kinali KAN, and the leaders of the AWM cooperative sent the Director of PT. AMP a letter stating that the company must transfer the smallholder plantation which had been developed and begun to produce to local people.
Also, on 1 and 4 November 2002 the people of Nagari Kinali demonstrated to the head of Pasaman District (Bupati) and to the Pasaman District People’s Representative Assembly (DPRD) to express their concern that palm oil companies operating in their nagari had not transferred the smallholder plantation that had already begun producing oil fruits and to request that the Bupati and the DPRD press palm oil plantation companies to keep their promise (Padang Ekspres 1 and 4 November 2003).
RESPONSES FROM OIL PALM PLANTATION COMPANIES
After much effort by local people in expressing their concerns, oil palm companies began to listen to local people’s protests but co-operated with only some of their demands. They paid communal land improvement compensation (siliah jariah) as requested by local landholders, and they also provided landholders with monetary compensation31 to compensate the land that they took by force. However, oil palm plantation companies provided none of the smallholder plantations that they had promised to proposed local recipients. 32 In fact, there were companies that had
29 See PT. TSG’s document about disputes with local people and interviews with datuak MM, 27 April 2002; datuak LJN, 21 April 2002; and datuak BBS, 7 April 2002, Kinali.
30Interview with datuak BBS, 24 April 2002, Kinali.
31See Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
32 As has been explained earlier, this is the part of the plantation that is provided to local people
planted the promised smallholder plantation areas themselves but, even after the oil palms began to produce, had not transferred them to local people.33 It was found that there was the head of the district expressed his support to local people that the oil palms that began to produce should be transferred to local people. Nevertheless, by the end of 2002 the developed smallholder plantation still had not been transferred to local people groups of (Padang Ekspres, 2 November 2002 and 5 November 2002).
Two reasons were given by oil palm plantation company managements to legitimise their lack of action. The first reason is that it is the responsibility of the local state apparatus to organise the transfer of smallholder plantations. This reason is plausible because, in fact, it is the duty of the local state apparatus to transfer plantation partnership plantations to their recipients under a Nucleus Estate and Smallholder Plantation Scheme (Soetrisno 1991, p. 115). The second reason given was that smallholder cooperatives had not been formed. However, it was found there was a case where the lists of proposed smallholder plantation recipients had been given to the head of a District and cooperatives had in fact been formed. Despite this, and despite the duty of state officials, nucleus estate companies have also a responsibility in establishing smallholder plantation co-operatives (Basyar 1999, p. 67).34
There was a case where a management of a company had yet to develop any smallholder plantations as previously agreed. Firstly, (as mentioned earlier) the company had agreed to develop 124 hectares of smallholder plantation for 62 of kinship group members and had accepted that it was the company’s responsibility to finance all expenses pertaining to this responsibility using its own money, with the company to be paid back by the recipients when the plantation produces.35 However, by March 2002, almost 4 years after the agreement was signed the promised smallholder plantations had not yet been developed.36 Secondly, the company had also agreed to develop smallholder plantations over another 3000 hectares but only
33 Interview with datuak BBS, 24 April and 25 May 2002 (Kinali), a public relations officer of PT. AMP, 28 May 2002 (Lubuk Basung). See also http://www.PadangEkspress.com, 1 November 2002 and 4 November 2002, both accessed on 16 March 2003.
34 Despite this, Rp 150,000.00 per month was paid by the company to proposed smallholder
plantation recipients as a compensation until the plantations were transferred to them (interview with a public relations officer of PT. AMP, 28 May 2002, Lubuk Basung).
about 200 had been planted.37 When asked for its reasons for not developing the promised smallholder plantations, the company’s public relations officer said that it could not obtain a loan to finance the development of the smallholder plantation because the central government had stopped providing Kredit Koperasi Primer Anggota (Primary Cooperative Member Credit, KKPA) for smallholder plantation development from 1998.38 It is usual, however, for a plantation corporation to develop the smallholder plantations after completing the development of its own nucleus estate plantation and offices (Ahmad 1998, p. 45). It had taken the five years until 1995 for PT. TSG to complete these39 so for several years after that it had been in a position to obtain KKPA funding. The secretary of Kabupaten Pasaman said that PT. TSG’s given reason was a trick about the absence of government loans. As he said, “It is true that the government stopped providing loans for plantation partnership development in 1998, but PT. TSG should have developed the promised plantation partnership before that year”.40
Another argument given the company was that providing the plantations for local landholders was not mentioned at the time when kinship group leaders provided land to the company, and no such thing was written in the land provision letter.41 This is true. However, providing smallholder plantation for local landholders was promised orally by the director of the company at the time of the company’s ceremony marking the beginning of planting in 1989 (Singgalang, 29 November, 1989). Moreover, as mentioned earlier, the management of PT. TSG and A. datuak
MM produced a written agreement that the company agreed to develop smallholder plantation for A. datuak MM and his lineage members. There was also an agreement on 4 October 1999 between the management of PT. TSG and lineage leaders of Nagari Kinali that the company would develop 3000 hectares of smallholder plantation.42 On 11 April 2000 there was agreement between the management of the
37 Interviews with a public relations officer of PT. TSG, 20 April 2002, datuak BBS, 7 May 2002, and datuak MM, 27 April 2002, Kinali.
38 Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali. The secretary of
Pasaman District confirmed that the government had stopped providing loans for financing smallholder plantation development since 1998 (interview with the secretary of Pasaman District, 6 May 2002, Lubuk Sikaping).
39 Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
40 Interview with the secretary of Pasaman District, 6 May 2002, Lubuk Sikaping.
41 Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
company and kinship group leaders of a Hamlet that the company would develop 200 hectares of smallholder plantations.43 Ironically, the public relations officer of the company said that “the management of the company was under pressure at the time agreements were made”.44
It seems that there is little possibility that local people to gain smallholder plantations from the company as the company was sold to another plantation company in 2004 without informing local people.45
RESPONSES FROM THE STATE
Local people attempted to get help from the provincial and the local state apparatus, including from the local People’s Representative Assembly (DPRD), in their efforts to resolve their conflicts with oil palm companies. However, the governments objected to pushing companies to develop smallholder plantations as demanded by local people, to certain cases claiming that there had been no written agreement about this matter produced between the kinship group leaders in question and the companies at the time of the land alienation process.46 In fact, the absence of the written agreements was because of a mistake by local government officials as it was them who had been responsible for organising the alienation of the local people’s communal land for the company’s oil palm plantation47.
Moreover, it is true that no promise to provide smallholder plantations was mentioned in the letter of land alienation from local kinship group leaders to the company via the head of the District. However, in 1989, when the same head of the district attended the company’s planting commencement ceremony, he had
43 See Daftar Investor Perkebunan Kelapa Sawit di Kecamatan Kinali 2001. 44 Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
45 Personal communication with Andiko in September 2005 and with a student of Political Science
Department of Andalas University who is originated from the place in November 2005.
46 See the letter of the head of Pasaman District to the Nagari Kinali Community Rights
Advocacy Team, 9 September 1999. When the Secretary of Pasaman District was asked about this he also said that the absence of written statements made in the letter of land alienation by the management of companies to develop plantation partnership as set out was the reason why the local government did not want to push companies to develop the plantation for the people of Nagari Kinali (interview, 6 May 2002, Lubuk Sikaping). When interviewed by a journalist, the deputy of the head of the district, Benny Utama, also said that local people’s demand for smallholder plantations would be very hard to achieve because of the absence of written agreements (Kompas 8 May 2001).
47 See the statement letters about kinship group leaders of NagariKinali providing their communal
publicly stated that the company would provide them for local landholders, as did the director of the company (Singgalang 29 November 1989).48
The formalistic standpoint of the local government district benefited the company by legitimising the company’s policy that it did not need to provide local people with smallholder plantation as there was no written agreement that had been produced before the company had begun to cultivate the land in question.
The local state apparatus has a duty both in recruiting the recipients of smallholder plantations (Soetrisno 1991, p. 102 and Basyar 1999, p 67) and also in organising the transfer of the plantations to the recipients (see Soetrisno 1991, p. 115 and Ahmad 1998, pp. 143-143).49 But it was found that the local state apparatus had not carried out its duties to organise the transfer of smallholder plantations to local landholders (Padang Ekspres 2 November 2002 and 5 November 2002). There was a case in a nagari that in the second half of 1999 the head of a District had expressed his agreement to transfer to local recipients smallholder plantations that were already producing, but the local government did not organise their transfer to local people.
This confirms others’ findings that the process of transferring smallholder plantation from the control of a nucleus estate corporation to the recipients of smallholder plantation is problematic. Besides the negative actions of the nucleus estate corporation it is clear that the state apparatus plays a role in the problem in part as it is very slow in completing the paperwork needed50 because of a lack of coordination, causing delay in the transfer (see Soetrisno 1991, p. 115).
CONCLUSION
This article demonstrates that the development of large-scale palm oil plantations that was a strategy chosen by the Indonesian government to provide them with an alternative source of income and to improve the welfare of local communities, in West Sumatra this has undesirable social implications for local people. They lost plots of their customary land without their informed consent and
48 It is true that the land alienation statement letter does not mention smallholder plantations.
However, this was the Pasaman District state officials’ mistake, because they were responsible for organising land alienation.
49 Information was also gained by interviewing a public relations officer of PT. AMP, 28 May 2002,
Kinali.
50 For example, processing land certificates, the calculation of credit and time of instalments
they were involved in long-lasted conflict with palm oil companies and the state apparatuses. These unwanted impacts were caused by two things; firstly by unfair ways of land acquisition; secondly by ways in which palm oil plantations and local governments treated local landholders with regard to the contribution of large-scale palm oil plantation development for local people, in this case promised smallholder plantations as compensation for customary land provided and by promised local economy improvement as the site effect of the development of large-scale palm oil plantations.
Beyond that, this article shows lack of recognition and respect toward local people with their customary rights based on their customary laws by business and the state in the economic development. Therefore, the case of large-scale palm oil plantation development demonstrates the problem of ongoing contestation between recognition of customary rights of local communities and the interests of capital and the state in Indonesia in general and in West Sumatra in particular.
References
Afrizal, 2007, The Nagari Community, Business and the State: The Origin and the Process of Contemporary Agrarian Protests In West Sumatera, Forest People Programmed and Sawit Watch, Bogor.
_____,2006, Sosiologi Konflik Agraria: Protes-Protes Agraria dalam Masyarakat Indonesia Kontemporer, Universitas Andalas Press, Padang.
_____, 2005a, the Nagari Community, Business and the State: The Origin and the Process of Contemporary Agrarian Protests In West Sumatera, Indonesia, Ph.D Thesis at the Asia Centre of Faculty of Social Sciences Flinders University. Ahmad, R., 1998, Perkebunan: Dari NES Ke PIR, Puspa Swara, Jakarta.
BAPPEDA Propinsi Sumatera Barat and BPS Propinsi Sumatera Barat, 1994,
Produk Domestik Regional Bruto (PRDB) Menurut Lapangan Usaha Propinsi Sumatera Barat 1989-1993, BAPPEDA Propinsi Sumatera Barat dan BPS Propinsi Sumatera Barat, Padang.
Basyar, H., A., 1999, Perkebunan Besar Kelapa Sawit: Blunder Ketiga Kebijakan Sektor Kehutanan, E-Law and CePAS, No place of publication.
Biro Pusat Statistik, 1985, Statistik Indonesia, Biro Pusat Statistik, Jakarta. Biro Pusat Statistik, 1999, Statistik Indonesia, Biro Pusat Statistik, Jakarta.
Bowie, A., and Unger, D., 1997, The Politic of Open Economy: Indonesia, Malaysia, the Philipines, and Thailand, Cambridge University Press, Cambridge.
Departemen Penerangan, 1953, Republik Indonesia: Propinsi Sumatera Tengah, Kementerian Penerangan (Bandung).
Fauzi, N., 1999, Petani dan Penguasa: Diniamikia Perjalanan Politik Agraria Indonesia, KPA, Bandung.
Kuntjoro-Jakti, D., 1981, ״The Political Economy of Development: the case of Indonesia unde the new order government, 1966-1978״, PhD Thesis, University of California.
Langill, L., R., 1978, Military Rule and Development Policy in Indonesia Under the New Order: 1966-1974, Ph.D Thesis, Faculty of the School of International Service of the American University.
Taylor, J., 1974, ‘The Economic Strategy of the “New Order”, in Repression and Exploitation in Indonesia, ed., the British Indonesian Committee, Spokesman Books, London.
Newspapers And Magazines
‘Tanah Ulayat di Sumbar, Untuk Kesejahteraan atau Perpecahan’, Singgalang 29 October 1989.
‘Tanah Ulayat di Pasaman Mulai Diselimuti Pohon Sawit’, Singgalang 29 November 1989.
