CHAPTER SEVEN ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS

CHAPTER SEVEN ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS The development of oil palm plantations in Jambi Province has been associated with adverse impacts on the environment. Local NGOs have been the main agents highlighting these impacts and consistently fighting for the protection of natural resources, especially the forest. However, it is quite difficult to distinguish who is more responsible for the loss of forest in Jambi since other crops have also expanded into the forestland, and much deforestation was caused by the logging concession companies in the past. In addition, local people also engage in logging in the forests. This chapter discusses some environmental issues relating to the expansion of oil palm in Jambi and touches on the role of other parties in the worsening environmental condition. 7.1. The Loss of Forest Land and Biodiversity The loss of forest begins when permits are issued to convert forestland into plantation areas. Following receipt of that permit, the companies usually apply for a wood utilization permit (WUP), permitting them to extract timber from the land cleared. According to Thahar (2003d), along with the rampant illegal logging, too many permits issued to exploit the forest was the main cause of forest loss in Jambi. Many cases revealed collusion between local authorities and companies in issuing permits. The permits actually function as masks to do illegal logging in national park areas. This practice leads to loss of forestland as well as forest biodiversity. Some permits given to private companies have actually never been used to establish an oil palm plantation. This means that after losing the forest and its biodiversity, the government and local people who expected to receive CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 62

economic benefits from the establishment of oil palm plantations suffer further loss. Until June 2001, the forestland converted into oil palm plantations in Jambi Province was reported to be 163,816 hectares (Table 7.1). Compared to the other provinces in Sumatra, this was the third largest area, while nationally it was the sixth largest. In his explanation, the Governor of Jambi said that the further development of oil palm plantations in this province would use the land of local people and idle land. However, the category of idle land was questioned by the NGOs since most of the idle land in Jambi came from forestland cleared by concessionary companies (Down to Earth, 2001). Giving them permits to develop oil palm plantations is seen to be forgiving their past sins in leaving the forest unplanted. Table 7.1 Forestland Converted into Oil Palm Plantations in Selected Provinces up to June 2001 Provinces Area (ha) Riau 814,025 Central Kalimantan 433,980 East Kalimantan 270,651 Aceh 218,034 Irian jaya 194,201 Jambi 163,816 Source: Tribowo and Haryanto (2001) There are in fact close similarities between oil palm plantation companies and the logging concessionary companies. The first similarity is the operating pattern. Most oil palm plantation and concession companies establish their operations in forestland, clear the land, and take advantage of the many kinds of valuable timber. Both are required to replant the area cleared, but in practice, they replant only a small area. The second similarity is that the companies that currently develop oil palm plantations and the logging CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 63

companies are under the management of the same conglomerates that have bad environmental records. Table 7.2 shows the landholdings of the ten largest oil palm conglomerates in Indonesia. Some of these companies also operate in Jambi Province as shown by Table 7.3. All groups but one are the old players in the logging of forests in all parts of Indonesia. In addition, it is very likely that the area of plantations owned by these groups is much greater than these data indicate since some companies have not identified to which group they belong. Table 7.2 Land Holding Owned by 10 Largest Indonesian Oil Palm Conglomerates, 1997 Group Holding Total Land Total Area Company Bank Area (ha) Planted (ha) Salim PT Salim Plantation 1,155,745 95,310 Sinar Mas PT Golden Agri Res. 320,463 113,562 Texmaco - 168,000 35,500 R. Garuda Mas PT Asian Agri 259,075 96,330 Astra PT Astra Agro 192,375 125,461 Lestari Tbk Hashim - 244,235 105,282 Surya Damai - 154,133 23,975 Napan PT PP London Sumatra 245,629 78,944 Indonesia Tbk Duta Palma - 65,800 25,450 Bakrie PT Bakrie Sumatra 49,283 23,392 Plantation TOTAL 2,854,738 723,206 Source: Casson (2000) CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 64

Table 7.3 Groups of Oil Palm Plantation Companies that Operated in Jambi, 2000 Group Total Land Bank Total Area Area (ha) Planted (ha) Sinar Mas 30,419 25,881 Raja Garuda Mas 38,307 17,300 Astra 41,410 28,241 Salim 18,560 5,993 Bakrie and Brothers 3,500 3,232 Veronica Untu 40,375 28,275 Source: WALHI Jambi (2001) Currently there are deep concerns about illegal logging activities by local people or private companies within the boundaries of the four national parks located in Jambi Province (Table 7.4). According to Rivani (2001), oil palm plantations have not only been established in forest conversion areas but also in conservation forest, such as in Bukit Tigapuluh National Park where there are two oil palm plantations, one of 8000 ha and one of 4000 ha. However, the data released by BAPPEDA Jambi (2004b) do not show such a decrease in the total area of either protected or ecotourism forest (Table 7.5). Table 7.4 Area of National Parks Located in Jambi Province National Parks Total Area Area in Jambi (ha) (ha) Kerinci Seblat 1,484,650 593,860 Bukit Tigapuluh 127,698 33,000 Bukit Duabelas 60,500 60,500 Berbak 162,700 162,700 Source: Thahar 2000a, 2003d and BAPPEDA Jambi (2004b) CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 65

Table 7.5 Forest Area by Function in Jambi Province 1999-2002 Years Production Protected Ecotourism Conversion Total Forest (ha) Forest (ha) Forest (ha) Forest (ha) (ha) 2000 1,312,190 191,130 676,120-2,179,440 2001 1,278,700 191,130 676,120-2,148,950 2002 1,278,700 191,130 676,120-2,148,950 Source: BAPPEDA Jambi (2004b) The different data provided by government agencies and NGOs are often the cause of hot dispute. The government has accused NGOs of boasting about the area of forest loss in Jambi. However, when disasters such as flooding occur, the government admits that indeed some areas of forest are now in a critical condition (i.e., the forests do not have enough trees to protect the land from erosion and to slow runoff) and urgently need replanting. Thahar (2003d) reported that at the end of 2002, the total area of critical land was 581,539 ha, of which 463,290 ha were outside the protected forest and 118,249 ha were inside the protected forest. The role of local people in protecting their forest seems at best very passive. In some cases, they are involved in deforestation activities, exploiting forest timber for sale. The presence of many sawmills has led to rampant illegal logging. According to Sardi (2002), this is due to the feeling that they will get nothing if they are not involved in such forest exploitation. However, as one result of an environmental campaign by NGOs, some groups of local people have begun to be aware of the importance of forest sustainability and demand that plantation companies do not extend further into the forest (WALHI, 2002). 7.2. Forest Fire and Smoke Forest fires have been a major environmental issue in Sumatra in the past decade. The hot spots in Jambi province experienced a substantial increase CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 66

in 1996 and 1997, even though the values were still lower than that of Riau and South Sumatra where oil palm is also expanding (Table 7.6). Table 7.6 Fire Density (per 100 km²) in Three Sumatra Provinces Year Jambi South Sumatra Riau 1992 0.28 0.21 1.26 1993 0.09 0.38 0.19 1996 4.40 2.97 6.76 1997 5.67 8.35 6.86 1998 0.95 0.32 10.23 1999 2.30 3.32 6.68 Average 2.28 3.00 5.00 Source: Suyanto et al. (2000) According to Thahar (2003e and 2003f), the satellite of the National Oceanic and Atmosphere Administration (NOOA) found 1,411 hotspots in Jambi Province in 2002 which burned 2,000 ha of land, including forest and the farms of local people, transmigrants, and large estates. The fire is even worse in drought when winds cause the fire to spread rapidly over surrounding areas resulting in smoke and haze over most regions in Jambi Province. During May and July 2002, NOOA found 801 hotspots, on land occupied by local people (402), industrial forest (198), oil palm areas (87), transmigration areas (56), concessionary forests (46), protected forests (6), and conservation forests (6). These data suggest the important role of local people practising the slash-and-burn method. However, newspapers reported that most large scale fires were sourced from the industrial forests and large oil palm plantations. According to Thahar (1999d), the conversion of forestland to large plantations including oil palm has been the main cause of large scale forest fires in Indonesia. More than 90% of hot spots in 1999 were sourced from the conversion of forestland. Suyanto et al. (2000) found that big companies in Jambi still used fire to clear land even though the government had banned it. CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 67

They prefer to use fire as this is the cheapest way to clear the land and to ensure crop nutrition. Even though the forest fire in 1999 was announced as a national disaster and cost the country around Rp7 billion (US$ 1 million) to reduce the smoke, in fact the practices continued (Thahar, 1999d). The slash-and-burn method is not only practised by plantation companies but is the traditional practice of local villagers. Those who practice shifting cultivation have long found this method is very efficient. They usually cultivate upland rice during the first three years after clearing by slash and burn. After that, the farmers often planted rubber. However, unlike the plantation companies that burn much larger areas, the farmers burn only a limited area which is relatively easy to control. In addition, according to Suyanto et al. (2000), to replant the old rubber trees, farmers in Jambi do not use the slash-and-burn technique. Rather, they usually use the sisipan technique that is, planting new rubber seedlings in the existing rubber gardens to replace the dead, dying, unproductive, and unwanted trees. This method definitely reduces the occurrence of forest fires. Suyanto et al. (2000) also found that fire became a weapon between two opposing parties, the farmers and the companies. Due to the increase in conflict, local people had no incentive to reduce the spread of fire, as a way of expressing protest at the company s activities. 7.3. Flood Disaster Flooding is a very serious problem in Jambi Province. The province suffers floods at least twice a year. In 2003, flooding occurred three times, costing an estimated Rp255 billion or US$ 32 million (Bakhori, 2004). The population also suffered from many kinds of illness and disruption of their economic and other activities as most of the roads were seriously damaged. The development of oil palm plantations in Jambi Province may not be fully responsible for the increasing occurrence of flood since there are also other plantations supported by the government such as rubber and cocoa. The CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 68

activities of logging companies may be more responsible. However, the expansion of oil palm plantations into forestland cannot be separated from the activity of deforestation itself, especially if we refer to the data about the area of forestland converted into oil palm plantations in Jambi Province, as discussed above (Table 7.1). Besides that, Jambi also experienced frequent flooding in the 1960s and 1970s when there was not much exploitation in the forest. However, the impact of flooding in recent years is worse due to the increase in population and the spread of population into new areas. 7.4. Conclusion Forest loss in Jambi has emerged as a deep concern since the province has recorded the sixth largest area of deforestation in Indonesia. Currently the four national parks are also threatened. Despite the alarming condition about the loss of forest and its negative impacts, the government still readily issues permits to establish oil palm plantations. The collusion and nepotism that have spread over the country means that such permits are sold cheaply. The government should release the permits more selectively, and not give permits to companies or conglomerates that have bad records in relation to logging activities in the past. The rapid deforestation in Jambi is exacerbated by the involvement of local people. Their involvement in deforestation activities cannot be justified but can be understood as a way to survive in the presence of large companies that exploit their natural resources. Forest fire and smoke are caused by the slash and-burn method to clear land, used by plantation companies and local people. Even though government has banned it, the practice continues because this method is considered as the cheapest way and helps provide crop nutrients. Large-scale fires are found in plantation areas, however there is a tendency of increasing number of hotspots in village areas. CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 69

The change of people s attitude toward the sustainability of the forest and its natural resources could be the best way to prevent further damage to the forest. Some demonstrations held by villagers in Jambi have been showing their concern for environmental issues. This is a good start, but not enough if the government does not improve its policy toward the exploitation of forestland in Jambi. CHAPTER SEVEN: ENVIRONMENTAL IMPACTS OF OIL PALM PLANTATIONS 70