Issue Brief
How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
ANNE ROSENBARGER, BETH GINGOLD, RAUF PRASODJO, ARIANA ALISJAHBANA, ANDIKA PUTRADITAMA, DEWI TRESYA
Indonesia is the world’s leading producer of palm oil. Industry and government leaders have announced goals to expand production while avoiding forest loss and social conflict. Achieving those goals depends on establishing new plantations on suitable, non-forested land and respecting local rights. Land classification in Indonesia does not necessarily allow this, as many suitable areas are legally unavailable for development. This issue brief examines methods to change legal classification of land to support sustainable palm oil.
WRI.ORG EXECUTIVE SUMMARY for changing legal land classifications in Indonesian law. Companies could contents Indonesia is the world’s leading use these methods to expand certi- producer and exporter of palm oil, 2 Executive Summary fied sustainable palm oil production with roughly 18 million metric tons in areas that were previously legally 3 Introduction of crude palm oil exports valued at unavailable. The methods could also 1 US $21.6 billion in 2012. The com- be used to facilitate the conservation 5 Methods for Changing modity plays a crucial role in the of forested areas currently legally Legally Allowable country’s economy. However, palm available for agricultural uses. Land Uses oil production is also closely linked to deforestation, social conflicts, and 10 Application: Testing This study identifies three types of other environmental impacts, as Methods in the Field methods for legally reclassifying land: large areas of Indonesia’s forests and 12 Discussion of Findings peatlands are cleared for conversion 1. Single reclassifications: Proce- 2 to oil palm plantations. dures that change the land-use 16 Recommendations classification of a single area. Palm oil industry and government 18 Endnotes leaders in Indonesia have announced 2. Multiple reclassifications: Proce- 21 References goals to expand palm oil produc- dures that change (or “swap”) the tion while avoiding forest loss and land-use classifications of mul- 22 Acknowledgments social conflicts. Achieving these goals tiple areas simultaneously. largely depends on where new oil palm plantations are established and 3. Local/special designations: Pro- whether local rights and interests cedures that change the allowable are respected during site selection land uses in a designated local processes. Site selection, in turn, area, without changing the land depends on government spatial use classifications. planning and permitting processes that determine where companies can In addition to the legal review, legally establish plantations. WRI carried out a land swap through a pilot project with Indonesian As of 2011, approximately 70 percent partner Sekala and PT Smart, one of of Indonesia’s total land area was the largest publically listed palm oil classified as “forest estate” (kawasan companies. PT Smart, which has com- 3 hutan) by the Ministry of Forestry. mitted to the standards of the Round- However, this and other classifica- table on Sustainable Palm Oil,5 held tions may not conform to the physi- a license for forested peatland that cal reality of the land cover: many was classified as “nonforest estate” forest estate lands are settled or and was willing to seek an alternative degraded, and many nonforest estate site on degraded land. In 2009, WRI lands host rich primary forests and and Sekala identified nearby suitable extensive peatlands. A study by the degraded land, where the local com- World Resources Institute found munity had a strong interest in palm that 5.3 million hectares of suitable oil development. However, despite land are part of the forest estate, and this interest, the plan has not been are therefore legally unavailable for approved by the national government, 4 agricultural development. and has stalled because of the com- plexity and cost of the legal process. Based on a desktop legal review, this issue brief found multiple methods
2 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
Companies, project developers, and INTRODUCTION communities seeking to change legal Whether these goals are achieved classifications in a manner that is Indonesia has rapidly expanded its will depend largely on where new consistent with sustainability stan- palm oil production over the past oil palm plantations are established dards face substantial legal chal- several decades to become the top and how local rights and interests are lenges, namely the length and costs producer of palm oil worldwide, with respected during site selection pro- of the processes, lack of legal clarity, crude palm oil exports valued at US$ cesses.10 Site selection in turn is highly 6 and lack of consistency with goals to 21.6 billion in 2012. However, the dependent on government spatial avoid forest loss and social conflicts. growth of the palm oil industry has planning and permitting processes, not been without consequences. Con- which determine where companies This study offers several recommen- version of forests to oil palm planta- can legally establish plantations. dations for palm oil companies to tions is a major driver of forest loss, help address these challenges, such affecting biodiversity, greenhouse gas Both industry and Indonesian 7 as understanding the legal reclassifi- emissions, and local livelihoods. government standards for certified cation procedure options and sharing sustainable palm oil include provi- implementation experience, going To address these concerns, indus- sions designed to contribute to these beyond legal compliance to follow try and government leaders have goals. The Roundtable on Sustain- best practices, and engaging with announced goals to expand palm able Palm Oil (RSPO), a multistake- initiatives such as the Roundtable on oil production while avoiding forest holder organization, has developed a 8 Sustainable Palm Oil and Indone- loss and social conflicts. Realiz- voluntary, market-based certification sian Sustainable Palm Oil to sup- ing these goals could contribute to standard that includes requirements port land-use classification policies. economic growth and job creation, to maintain “high conservation Recommendations are also outlined enhance the competiveness of the value” areas and to obtain the “free, for Indonesian policymakers, includ- Indonesian palm oil industry in the prior, and informed consent” (FPIC) ing clarifying the objectives and growing global market for more sus- of local people.11 definitions associated with land swap tainable palm oil, and contribute to policies, simplifying procedures, national ambitions to reduce green- 9 incorporating biophysical and social house gas emissions. factors into legal classifications, and making data and procedures publi- cally available and easily accessible. Industry and government leaders have Addressing these challenges will help announced goals to expand palm oil Indonesian companies, governments, and communities use land more production while avoiding forest loss efficiently, preserve valuable forests, and expand business prospects. With and social conflict. Whether these goals global demand for sustainable palm oil and other commodities on the are achieved will depend on where new rise, land swaps can help position Indonesia to meet market demands plantations are established and how while using land sustainably. local rights and interests are respected during site selection.
Issue Brief | October 2013 | 3 The Indonesian Sustainable Palm an area identified as suitable for a oil palm plantations (Table 1).18 In Oil certification system, a recently plantation under sustainability stan- some instances, the government has developed legal standard, includes dards is also legally eligible for the already issued permits to companies provisions for avoiding social conflicts permits required for the proposed to begin plantation development in and loss of natural forest and biodi- new land use.16 In Kalimantan, the these areas. For example, in the Proj- versity. These provisions are based on Indonesian portion of the island of ect POTICO pilot field site in West concepts in Indonesian regulations.12 Borneo, a Project POTICO desktop Kalimantan, a palm oil company was study identified 14.6 million hectares issued a permit in a heavily forested Companies can get a head start on as potentially suitable for palm oil peat swamp on land legally classified meeting these standards by iden- expansion, but 5.3 million hectares for plantation development. Con- tifying potentially suitable areas of this total were not legally classi- versely, a nearby area of degraded for expansion using an approach fied to allow for plantation devel- land that met Project POTICO developed by the World Resources opment (Table 1).17 Although field suitability criteria was legally off- Institute (WRI) and Sekala13 under assessments are necessary to reject limits for plantation development.19 the Sustainable Palm on Low Carbon or confirm the suitability of each This Project POTICO pilot site is Degraded Land or POTICO Project site, this analysis suggests that large described in “Application: Testing (Box 1). This approach14 consists of a potentially suitable areas are not Methods in the Field,” below. desktop study and field assessments eligible for development because of and includes economic, environmen- their legal classification. The government has recognized this tal, social, and legal considerations. problem and in June 2012 proposed The approach and spatial data are Meanwhile, 8.6 million hectares a “land swap” policy to help address available at an interactive website.15 found not suitable by the Project inconsistencies in land classification. POTICO desktop study—including The policy is part of a draft national However, companies face the forested areas—were legally clas- “REDD+ Strategy” aimed at reducing remaining challenge of ensuring that sified to allow for conversion to emissions from deforestation and for-
X 1 PROJECT POTICO: SUSTAINABLE PALM OIL ON LOW CARBON DEGRADED LAND B O The World Resources Institute’s Project such as respecting local people’s rights cover data for the Indonesian island of Kali- POTICO supports sustainable palm oil and avoiding deforestation. Sustainable mantan. The Forest Cover Analyzera enables production and improved forest manage- palm oil refers to palm oil produced in users to assess forest cover change and ment in Indonesia. Our pilot project in West accordance with established standards such deforestation risks related to sustainable Kalimantan links the expansion of oil palm as those of the Roundtable on Sustainable palm oil production in areas of their choice cultivation on degraded land with sustain- Palm Oil (RSPO). in Kalimantan. The Suitability Mapperb en- able forest management, while respecting ables users to prioritize potentially suitable local rights and interests. Our research Web Tools to Support Sustainable sites for sustainable palm oil production for and outreach activities support market and Palm Oil further investigation in the field. policy incentives for sustainable palm oil production and improved forest manage- WRI has developed two web applications ment in Indonesia. to enable key stakeholders such as palm Notes: oil producers , investors, and government a. See http://www.wri.org/applications/maps/forest- Palm oil has potential to contribute to decisionmakers to make improved land-use cover-analyzer/. b. See http://www.wri.org/applications/maps/suitabil- Indonesia’s development goals in line with decisions concerning sustainable palm oil. ity-mapper/. Indonesia’s emissions-reduction strategy Building off WRI’s Interactive Atlases, these if expansion follows sustainable practices web tools will provide land use and land
4 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
POTENTIAL SUITABILITY VERSUS LEGAL AVAILABILITY
e 1 tabl IN KALIMANTAN INDONESIA
POTENTIAL SUITABILITY for Oil Palm BASED ON POTICO ANALYSIS (million ha) LEGAL AVAILABILITY Potentially Suitable Not Suitable
Legally available for oil palm 9.3 8.6 (nonforest estate or convertible production forest)
Not available for oil palm (all other 5.3 30 legal land use classifications)
Source: POTICO Suitability Mapper. Available online at http://www.wri.org/project/potico/about-suitability-mapper.
est degradation. However the details recommendations for palm oil com- tainable land management, whether of the draft policy are undefined. For panies and Indonesian policymakers for oil palm cultivation, forestry example, it is unclear whether “land grappling with land-use classification activities, or other land uses. swap” refers to changes in legal land- challenges. A detailed legal appendix use classifications or permits, or both, is included for reference. METHODS FOR and what criteria would be used to determine whether a land swap can WRI recognizes that the proposed CHANGING LEGALLY be implemented. methods for changing legal classifica- ALLOWABLE LAND USES tions were not designed to support This section summarizes existing As the government continues to local interests and land-use rights. legal methods for changing allow- refine its policies, companies seeking This brief references some of the able land uses, including methods for to develop new plantations in suit- important social issues and chal- changing land-use classifications to able areas need to understand the lenges associated with changing legal allow nonforestry uses (e.g., oil palm existing options for changing legal land classification; however it does plantations) where they were previ- land-use classifications. This brief not attempt to provide a comprehen- ously disallowed, as well as meth- summarizes the existing legal meth- sive analysis of social issues related ods for changing classifications to ods for changing current land-use to Indonesian land use. disallow nonforestry uses where they classifications, which were identified were previously allowed. Details on through a desktop legal review. It Although this brief focuses on palm each method, as well as background offers a Project POTICO case study oil production, its findings are rel- on the Indonesian legal context of the application of these methods, evant to any developer or community relevant to land-use classifications and discusses challenges to their group seeking legal recognition for a and land rights, are in Appendixes A implementation. Finally, it sets out project aiming to pursue more sus- and C.
Issue Brief | October 2013 | 5 In Indonesia, all land is legally clas- 2. Multiple reclassifications: hutan) which allows the conver- sified according to its allowable uses. Methods that change (or “swap”) sion of convertible production forest An area’s land-use classification the land-use classifications of to nonforest estate.24 This method determines its eligibility for rights multiple areas simultaneously. applies only to provinces with at least and permits defining its allowable 30 percent of their area classified as uses. Appendix A2 describes the his- 3. Local/special designations: forest estate.25 As of 2007, 4.6 mil- tory and legal context of the current Methods that change the allow- lion hectares of land formerly classi- classification system. able land uses in a designated fied as convertible production forest local area, without changing the had been reclassified as nonforest All land in Indonesia is classified as land-use classifications. estate for nonforestry uses such as either forest estate (kawasan hutan) oil palm plantations.26 or nonforest estate (areal penggu- The following sections describe the naan lain, or APL). Forest estate is mechanisms, laws, and regulations A second single reclassification further classified into three functional governing these types of methods. method, “forest estate review” categories that determine allowable The procedures applicable in any (penilaian ulang kawasan land uses, from the most restrictive situation depend on initial land hutan) allows for the reclassification category of “conservation forest,” classifications, intended uses, and of land in the forest estate category. through “protection forest,” which project goals. It is important to note When an area that is potentially suit- allows use of forest products, to “pro- that changing legally allowable land able for a particular crop is classified duction forest,” which allows com- uses is not the same as changing as a functional category within a for- mercial timber harvesting.20 Table 2 existing usage rights (i.e., permits); est estate other than convertible pro- summarizes these legal classifications additional processes are required to duction forest, this method can be and their allowable land uses. For change usage rights, which must be used to reclassify the area as convert- more detailed information on forest followed for specific development or ible production forest, which makes classifications, see Appendix B. conservation projects. Table 3 sum- it eligible for reclassification to marizes the legal processes available nonforest estate.27 The forest estate In 2011, about 70 percent of Indo- to reclassify land use. review method also allows a single nesia’s total land area (187.6 mil- reclassification of a forested area lion hectares) was classified by the Single Reclassifications classified as convertible production Ministry of Forestry as forest estate Several legal methods can be used forest to one of the classifications (131 million hectares).21 By conven- to change the land-use classification that is not eligible for removal from tion, nonforest estate is outside the of a single area. These methods can the forest estate category using the jurisdiction of the Ministry of For- be used either to allow nonforestry forest estate release mechanism.28 estry and generally under the control uses (e.g., oil palm plantations) that of the district in which it is situated.22 were previously disallowed, or to The forest estate review process In nonforest estate areas—as for disallow nonforestry uses that were involves re-evaluating the legal classi- other land classes—the legal basis previously allowed. Note that two or fication of the area based on a scoring for governing land use is the Basic more single reclassifications pursued system that includes slope, soil type, Agrarian Law (Law 5 of 1960).23 independently but simultaneously and rainfall intensity.29 Current land could achieve the goals of a multiple cover (forested or nonforested), peat A desktop review of Indonesia’s laws reclassification or “land swap.” depth, and land-use information are and regulations identified three types Appendix C1 provides additional not included in the scoring system. of methods to legally change allow- details about the methods discussed able land uses: in this section. Nonforest estate areas can be reclas- sified to become part of the forest 1. Single reclassifications: estate through a “forest estate The most common single reclassi- Methods that change the land-use gazettement” process (penguku- fication method used to date is the classification of a single area. han kawasan hutan) conducted “forest estate release mecha- by the Ministry of Forestry. This nism” (pelepasan kawasan four-step process is based on a forest
6 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
LAND-USE CLASSIFICATIONS BY FUNCTION e 2 tabl MAIN CLAS- SUBCLASSI- PERMITTED FUNCTION CRITERIA SIFICATION FICATION ACTIVITIES
Forest Estate (Kawasan Hutan)
Natural Reserve Preserve animal and plant biodi- Varies according to its Research, science, education, (Hutan Suaka) versity as well as its ecosystem, subclassification (natural and limited tourism also functions as an area for reserve, wildlife reserve) life-supporting systems. Conservation Forest (Hutan Konservasi; HK) Nature Conser- Protect life-supporting Varies according to its Research, science, education, vation Area systems, preserve biodiversity subclassification (national cultivation activities, cultural (Hutan Peles- and sustainable utilization of park, grand forest park, activities, and limited tourism tarian Alam) natural resources and their nature recreational park, ecosystems. hunting park)
Protection ----- Forest estate with main Weighted scorea of >175 Forest area utilization activities Forest (Hutan function of protecting or, (1) slope class of 40% (cultivating medicinal/decorative Lindung; HL) life-supporting systems for or more; (2) 2000+ m plants, fungi, apiculture, swiftlet hydrology, preventing floods, above sea level; (3) soil nests, capturing wildlife, cattle feed) controlling erosion, preventing is extremely vulnerable to sea water intrusion, and main- erosion with slope class Utilization of environmental taining soil fertility. of 15% or more; (4) water services (water flow, ecotourism, catchment area; (5) coastal biodiversity, environmental protec- protection area tion, carbon absorption and storage) Extraction of nontimber forest products (rattan, bamboo, honey, resin, fruits, fungi)
Limited Produc- Forest estate with main Weighted score 125–174. Timber extraction through selec- tion Forest function of generating forest Must be outside of protec- tive logging (Hutan Produksi products via selective/limited tion forest, conservation Terbatas; HPT) logging scheme forest, and hunting areas
Permanent Forest estate with main Weighted score <125. Clear cutting forests and indus- Production Production Forest function of generating forest Located outside of protec- trial timber plantations Forest (Hutan (Hutan Produksi products. tion forest, conservation Produksi; HP) Tetap; HP) forest and hunting areas
Convertible Forest estate with main function Forest estate area that has Clear cutting and industrial Production Forest of generating forest products been spatially designated timber plantations, can also be (Hutan Produksi but spatially reserved for use of for nonforest development released to be nonforest land Konversi; HPK) development other than forestry purposes (areal penggunaan lain – APL).
Nonforest Estate (Areal Penggu- Land outside the forest estate designated for nonforestry use such as agriculture, naan Lain; APL) settlement, etc.
Source: Compiled from Law 41 of 1999 on Forestry, Minister of Forestry Regulation P.50 of 2009, Minister of Forestry Regulation 37 of 2007, and Government Regulation 68 of 1998 a “Weighted score” refers to the calculation of an “erosion sensitivity factor” based on a combination of slope, soil type, and rainfall intensity. A higher “weighted score” equates to a higher “erosion sensitivity factor.”
Issue Brief | October 2013 | 7 inventory and involves the review at least two times more nonforest Local/Special Designations of national, provincial, and dis- estate land must be reclassified as There are also procedures for des- trict spatial plans.30 A forest estate forest estate than forest estate land ignating localized special areas to gazettement process can be either reclassified as nonforest estate. In change allowable land uses without “partial” or “provincial.” The process provinces where the forest estate is changing their legal land-use clas- for a partial forest estate gazettement more than 30 percent of the land sifications. Appendix C3 provides is detailed in a Ministry of Forestry area, the minimum exchange ratio additional details about the methods regulation.31 As of July 2013, there is 1:1.35 Very few precedents for the described in this section. A “forest was no implementing regulation to application of this procedure exist.36 with rights” (hutan hak) process explain how to conduct provincial is available in forested areas of a forest estate gazettement process.32 A spatial planning revision nonforest estate with demonstrable40 process under Spacial Planning local rights. The local regent/mayor Law 26 of 2007 can change many Multiple Reclassifications can request a hutan hak designation classifications at once.37 Spatial plans Several legal methods exist for simul- for an eligible area. If the forested are made at district and provincial taneously changing the land-use clas- area serves a conservation or protec- levels through multiple processes sifications of two or more areas. In tion function, an additional process and incorporated into national plans. general, increasing the number and can be used to reclassify the area as Spatial plans made under this law size of the areas involved increases forest estate after compensating local are valid for 20 years and should the complexity of the procedures rights holders.41 be reviewed every five years by the and decreases the likelihood that district and provincial government. site- or community-specific concerns An “enclave solution” allows Associated processes, laws, and regu- about land rights will be adequately for the creation of relatively small lations are described in Appendix C2. addressed. Appendix C2 provides enclaves within forest estate areas additional details about the methods where local people can legally con- A July 2012 amendment to the described in this section. duct nonforest activities.42 In nonfor- forest exchange mechanism regula- est estate areas, regents and mayors tions creates an expedited forest The legal procedure that allows for can issue a local conservation exchange for companies that were the simultaneous reclassification of area stipulation to restrict uses, for issued permits prior to the 2007 two areas is known as the “forest example, to uses allowed in areas spatial planning law , which now exchange mechanism” (tukar- classified as “conservation forest.”43 conflicts with the current legal clas- menular kawasan hutan). The sifications.38 For instance, a palm Ministry of Forestry describes the Areas that are legally stipulated as oil company with a permit for land procedure as a “land swap.”33 In this “village forest” (hutan desa) classified as nonforest estate prior to usage, land swap refers purely to or “community forest” (hutan 2007, but reclassified as forest estate changing classifications, not moving kemasyarakatan) are also within under the spatial planning law, could existing permits. The forest exchange the forest estate. These lands have use the expedited process to reclas- mechanism can be applied to the Ministry of Forestry functional clas- sify the permitted area as nonforest reclassification of nonforest estate to sifications, but their use is limited estate. This process, which involves permanent production forest or lim- to communities.44 a legal classification change linked ited production forest, and vice versa.34 to changing permits, could also be considered a “land swap.” The forest exchange mechanism is applicable in provinces where the An alternative method for chang- forest estate is less than 30 percent ing multiple classifications at once of the land area and the forest estate is through a government-initiated release mechanism does not apply. forest audit mechanism, in which In these provinces, the minimum the Ministry of Forestry conducts a exchange ratio of forest estate to rescoring exercise applicable to nonforest estate is 1:2, meaning that many areas.39
8 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
SUMMARY OF PROCEDURES FOR CHANGING ALLOWABLE LAND AREAS
e 3 tabl IN INDONESIA
Procedure Initial Classification Final Classification Comments
Single Reclassification
Forest estate release Convertible production forest Nonforest estate Most common method for reclas- (pelepasan kawasan sifying land to date. Initiated by a hutan) minister-level government official, regent, mayor, governor, head of corporation, or head of a foundation
Forest estate review Conservation forest, protection Conservation forest, protection Can be used in combination with forest (penilaian ulang forest, limited production forest, forest, limited production forest, estate release mechanisms. Initiated by kawasan hutan) permanent production forest, or permanent production forest, or regent or mayor if area is within one convertible production forest convertible production forest district or city, or by governor if area is within multiple districts
Forest estate Nonforest estate Conservation forest, limited Four -step process to designate gazettement production forest, permanent nonforest estate into forest estate. (pengukuhan production forest, convertible Conducted by the Ministry of kawasan hutan) production forest, protection forest Forestry.
Multiple Reclassification
Forest exchange Limited production forest or Nonforest estate and limited Simultaneous reclassification of two mechanism (tukar- permanent production forest and production forest or permanent areas. Initiated by the Minister of menukar kawasan nonforest estate production forest Forestry, or a government official hutan) equivalent to a minister, governor, regent, mayor, head of govern- mental or private business entity or head of a foundation
Expedited forest Limited production forest or perma- Nonforest estate and limited Existing permit required exchange (tukar- nent production forest and nonforest production forest or permanent menukar kawasan estate production forest hutan yang dipercepat)
Spatial planning Conservation forest, protection Conservation forest, protection Plans created for district, prov- revision process forest, limited production forest, forest, limited production forest, ince, and national spatial plans. (revisi rancangan permanent production forest, permanent production forest, Multiple decisionmakers involved in tata ruang dan convertible production forest and/or convertible production forest and/or process. Revised every five years. wilayah) nonforest estate nonforest estate
Forest audit mecha- Conservation forest, protection Conservation forest, protection Initiative led by Ministry of Forestry nism (mekanisme forest, limited production forest, forest, limited production forest, in which forest estate rescoring is audit kawasan permanent production forest, or permanent production forest, or conducted for many areas. hutan) convertible production forest convertible production forest
Issue Brief | October 2013 | 9 SUMMARY OF PROCEDURES FOR CHANGING ALLOWABLE LAND AREAS
e 3 tabl IN INDONESIA (cont.)
Procedure Initial Classification Final Classification Comments
Local/Special Designation
Forest with rights Nonforest estate No change Allows forest uses in APL; can be used (hutan hak) as first step to reclassify APL as forest estate. Initiated by regent/mayor.
Enclave solution Limited production forest, perma- No change Allows nonforestry uses within nent production forest, or convert- forest estates. Initiated by regent or ible production forest mayor.
Local conservation Nonforest estate No change Restricts uses of APL to area (area konser- conservation vasi lokal)
Village forest Limited production forest, perma- No change Restricts uses within forest estate to or community nent production forest, or convert- communities forest (hutan ible production forest desa or hutan kemasyarakatan)
APPLICATION: TESTING Developing the degraded land would (izin lokasi) on forested peatland that require obtaining a permit, as well as was classified as nonforest estate.47 PT METHODS IN THE FIELD the free, prior, and informed consent Smart was willing to forego devel- In 2009, under Project POTICO, of local people.46 At the same time, oping that area for oil palm and to WRI and Indonesian partner orga- the company would work with local investigate alternative management nization Sekala initiated a pilot communities and government to options for maintaining the forest. project to facilitate a “land swap.” In develop a sustainable management PT Smart had publicly committed the original conception of the pilot, plan for the original permitted area. to fulfilling the RSPO principles and Project POTICO considered a “land A successful swap would require a criteria in new plantation develop- swap” a change in legally permitted method for changing legal classifica- ments; it has since announced specific management rather than a change tions if the initial legal classifications forest conservation measures that go in legal land classifications. In other were inconsistent with the desired beyond these requirements.48 words, a company with a permit on final land uses (e.g., oil palm on the forested land would agree to not degraded land, sustainably managed WRI and Sekala worked with PT develop the area and instead, develop community forestry on the forested Smart to identify a potentially suit- a similarly sized area that was not land) (Figure 1). able degraded area nearby where forested, but rather was considered communities had expressed interest “degraded”45 in accordance with the In the pilot site, PT Smart, one of the in oil palm plantation development. Roundtable on Sustainable Palm Oil world’s largest publicly listed palm The partners identified the area (RSPO) certification requirements. oil producers, held a location permit through a method that included both
10 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
a desktop analysis and rapid field assessments, followed by more in depth surveys and discussions with local community members, govern- ment officials, and nongovernmental Project POTICO considered a “land organizations (NGOs) once prior- ity sites had been identified.49 Even swap” a change in legally permitted before WRI and Sekala’s involve- ment, local community representa- management. A company with a per- tives had, on multiple occasions, approached PT Smart to inquire mit on forested land would agree to not about development in the area. develop the area and instead, develop a Despite community interest and similarly sized area that was not forested. the potential suitability of the area, existing legal land-use classifi- cation complications had dissuaded PT Smart from pursuing develop- ment plans prior to WRI and Sekala’s involvement.
POTICO “LAND SWAP” CONCEPT Fig ure 1
FOREST, PEATLAND & OTHER HCV AREAS DEGRADED LAND
L AND U SE PALM OIL PRODUCTION NOT COMMERCIALLY UTILIZED INITIA L INTENDED
“LAND SWAP” Legal land use classifications Use rights (permits, local claims) Management plans
CONSERVATION OR SUSTAINABLE USE PALM OIL PRODUCTION RE V ISED L AND U SE
Issue Brief | October 2013 | 11 proposed LEGAL LAND-USE CLASSIFICATION CHANGES FOR POTICO
Fig ure 2 PILOT SITE IN KAPUAS HULU, WEST KALIMANTAN
FOREST, PEATLAND & OTHER HCV AREAS DEGRADED LAND
Nonforest Estate Production Forest initia l ega ation cl assifi c ation
“LAND SWAP” Legal land use classifications
ation c ation Protected Forest Nonforest Estate assifi re v ised l ega cl
The site was legally classified as lim- apply because the degraded area was short-lived opportunity to reclassify ited production forest and produc- not classified as convertible produc- the area through this larger district, tion forest and therefore would need tion forest. WRI / Sekala considered province, and nationwide spatial to be reclassified to nonforest estate a multiple reclassification more con- planning review process. The team to allow for legal oil palm cultivation sistent with the project goals, which also viewed the provisional spatial (Figure 2). included maintaining the forested planning process as an opportunity area as forest. to increase community participation To facilitate the pilot “land swap” in the government process.51 WRI that would change the legally permit- WRI and Sekala first considered and Sekala engaged district, provin- ted management of both the forested using the forest exchange mecha- cial, and national decisionmakers and degraded sites, WRI and Sekala nism, but PT Smart and the POTICO by providing detailed recommen- investigated each of the methods for field team determined the process dations that reflected current land changing legal land classifications would be too long, complicated, cover, land use, and conservation identified in the desktop review. and expensive. The spatial planning values, as well as perspectives from process was in its five-year review the local communities and palm oil Initially, single reclassifications were period (see process in “Multiple companies. This engagement pro- not considered attractive. The forest Reclassifications,” above),50 and the cess included facilitating discussions estate release mechanism did not team opted to take advantage of the among elected representatives of
12 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
local communities, PT Smart, and development negotiations guided holds the concession for the area, will local government officials. by the principle of free, prior, and convert the forest in the near term: informed consent. the company is committed to avoiding WRI and Sekala’s recommendations deforestation and is open to alterna- were incorporated into the 2010 drafts Over three years—with approval of tive management options. However, of district and provincial spatial plans, the provincial spatial plan uncer- this is only the case while PT Smart largely because of the engagement of tain—the team gradually shifted its retains the permit. As long as the other stakeholders, including NGOs approach from trying to implement forested area remains part of the working to improve spatial planning a land “swap” through a multiple nonforest estate, there is a risk that in the area. PT Smart’s assurance that reclassification, to using local/spe- PT Smart’s permit for oil palm will be it would support reclassification of the cial designations, which could be revoked and reissued to a company forested area despite holding a use pursued simultaneously to achieve with no interest in conservation.55 permit was critical to the incorporation the pilot project’s original goals. of WRI and Sekala’s recommendations Although the pilot project is ongoing, in the draft plans. The POTICO team has recently it has informed WRI’s analysis of the begun to investigate an enclave solu- existing legal reclassification meth- Despite this initial success, the tion suggested by the local govern- ods identified in the desktop legal national government had not yet ment. As described in “Methods for review. Findings from this analysis approved the provincial plan when Changing Legally Allowable Land are discussed in the next section. this issue brief was finalized (July Use,” above, this option creates 2013) and it was unclear when or small enclaves within forest estate DISCUSSION whether it will do so. Since the areas where local people can legally national process includes review of conduct nonforestry activities.53 This OF FINDINGS all provincial maps, the timeline is change could allow communities to WRI’s analysis found multiple long, unclear, and prone to delay cultivate oil palm while maintaining methods in Indonesian law for because of politics unrelated to the their permanent production forest changing legal land-use classifica- specifics of any given field project. and limited production forest legal tions. Companies could, in theory, The POTICO team has found it dif- classifications in the “degraded” area. use many of these methods to ficult to determine where the plan The creation of enclaves also aligns expand certified sustainable palm is in the process, and who in the with recent discussions (December oil production in areas that were government is responsible for taking 2011) with local communities that previously legally off limits. These the next steps. See Appendix C2 for reflect a growing interest in small- methods could be used to conserve additional details. holder development. With sufficient forested areas that are currently local political and community will, legally available for agriculture. While the spatial planning process enclaves may be a viable solution. stalled, the project team conducted Whether it is financially viable for However, in practice, companies several workshops with community the communities to become small- face many challenges to changing members, government officials, and holder developers depends largely on legal land-use classifications. These PT Smart to discuss potential devel- the provision of extension services challenges are problematic both opment opportunities, both for oil by larger palm oil companies in the for project developers interested in palm and other options. Workshop area, as is the case with most small- ecosystem restoration concessions56 participants reviewed a sample coop- holder development scenarios. in forested areas and for local people eration agreement provided by PT interested in strengthening their Smart outlining the development and Furthermore, work remains to land management rights. management details of a plantation identify a legal and financially viable partnership.52 The team also facili- management plan for the forested Overall, companies, project develop- tated a detailed community mapping area within the existing oil palm ers, and communities face substan- process in both the forested and concession that will effectively main- tial legal challenges in implementing degraded areas with local facilitators tain its conservation values.54 There financially viable, clear procedures to help prepare for possible future is little risk that PT Smart, which for changing legal classifications
Issue Brief | October 2013 | 13 consistent with sustainability stan- Challenge 2: Lack of dards for avoiding forest loss and Legal Clarity Overall, com- social conflicts. Uncertainty regarding the legality of panies, project Three categories of major legal chal- existing procedures, classifications, lenges are described below. Although permits, and customary rights is a developers, and the Indonesian government has rec- major hindrance to implementing ognized many of these challenges and procedures to change legal classifica- communities has begun to take steps to address tions. Other challenges include: them (for example, through proposed face substantial national REDD+ strategies), these No single legal classification legal challenges challenges continue to hinder compa- map. A prerequisite for imple- nies and other stakeholders.57 menting a clear process for changing legal classifications in implementing Challenge 1: Length and Cost is clear information and agree- ment on the initial legal clas- financially viable, of Procedures sifications. However, there is All the processes identified require currently no single government- clear procedures many steps to attain approvals from approved map that clearly multiple government agencies at defines which areas are forest for changing different levels, adding substantial estates. Although the Ministry legal classifica- time and cost to the already lengthy of Forestry has produced a single bureaucratic procedures for acquir- map, it is not harmonized with tions consistent ing a land-use permit. the many spatial planning maps created by various jurisdictional with sustainabil- For example, according to the law levels, which are already being governing the forest exchange used at a local level to guide ity standards for mechanism, the Ministry of Forestry’s permitting decisions.60 bureaucratic process can take up to avoiding forest 2,273 days—over six years—from the In addition, as of 2010 about time the application is submitted.58 89.2 percent of the land clas- loss and social This does not include time that the sified as forest estate by the National Parliament might take to Ministry of Forestry had not yet conflicts. consider the application. A combina- been “stipulated” following the tion of changing classifications within full delineation process required the forest estate followed by the forest by law.61 A Constitutional Court estate relinquishment mechanism decision in February 2012 cast could take two and a half years within uncertainty on the legal status of the Ministry of Forestry alone. these areas, but the implications Lack of publicly available, easily of the decision remain unclear.62 accessible data on legal clas- In both cases, the applicant bears the In response to the decision, sifications, permits, and rights. majority of the cost, including the the Ministry of Forestry issued Without publicly available, easily cost of the government-appointed a memo to governors, district accessible data on legal clas- research team and the cost of delinea- heads, and local forestry agen- sifications, permits, and rights, tion. The cost of implementing the cies stating that all designation companies and individuals are forest exchange mechanism proce- of forest area prior to the Consti- disadvantaged when making dures in the POTICO field project was tutional Court’s decision and the planning decisions, and govern- estimated at more than US$200,000 legal implications are still valid.63 ment officials can profit by selec- —and amount that PT Smart deter- tively sharing information. Many mined to be prohibitively expensive.59 district-, province-, island-, and
14 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
national-level spatial planning nesian laws concentrate control from deforestation or maintaining maps are not publicly available. over land, water, and natural biodiversity conservation. Although the Ministry of For- resources in the government.70 estry has made legal classifica- Likewise, land-use reclassifica- tion and permit data available Little or no information on tion procedures do not adequately on a public website, these maps successful legal precedents. address the involvement of local are sometimes difficult to access With the exception of the forest communities and do not allow com- and are often inconsistent with release mechanism, most of munities or individuals to initiate the provincial and district maps the methods identified in the reclassification process. Although of permits.64 None of the maps review have not been widely some procedures mention either provides information on local or implemented.71 Few documented compensation to communities or customary rights to land. “success” stories of legal classi- require public participation, these fication changes following many provisions are usually vague and Convoluted, frequently chang- of the procedures are avail- often ignored in practice. When ing procedures and missing able to the public. Of the legal communities are not involved in instructions for implementation. precedents that do exist, many legal classification decisions, and are Convoluted procedures with are small scale or appear to be subsequently not involved in permit- many bureaucratic steps, often special cases whose outcomes ting decisions, costly ongoing social with undefined approval criteria, depended on local political will conflicts are likely to arise. Although provide rent-seeking opportuni- and/or civil society support.72 some of these problems can be ties.65 This situation is particu- avoided when companies follow their larly problematic when combined Challenge 3: Inconsistent own due diligence procedures, the with ongoing jurisdictional politi- Goals to Avoid Forest Loss lack of legal clarity regarding local cal wrangling at multiple levels of and Social Conflicts land use rights is a fundamental government. Constant changes to challenge facing companies intent on procedures through amendments In general, the methods for changing following the principle of free, prior, contribute to ongoing confu- legal classifications identified have and informed consent. sion and lack of long-term legal not been specifically designed to certainty.66 Meanwhile, some support efforts to both maintain high As long as these environmental and procedures lack instructions conservation value areas and respect social factors remain unaddressed 73 for implementation.67 local land use rights and interests. in legal classification and reclassifi- As a result, diligently following exist- cation procedures, companies will Inconsistent treatment of cus- ing legal procedures can fail to con- continue to receive permits that are tomary land rights and lack of tribute to, or even detract from, best likely to be inconsistent with the goal mechanisms for resolving land management practices for meeting of achieving more sustainable palm disputes. Ongoing, costly social the twin goals of maintaining high oil production without forest loss conflicts resulting from a lack of conservation values and avoiding and social conflicts. mechanisms to recognize cus- social conflicts. tomary land rights and resolve RECOMMENDATIONS land-use claims continue to Regarding conservation values, proce- plague the palm oil industry. A dures for determining land-use classi- Fully addressing the challenges iden- study by Sawit Watch, an Indo- fications within the forest estate do not tified above will require broad policy nesian NGO, noted 660 ongoing include important biophysical charac- and legal reforms targeting spatial land conflicts related to the palm teristics such as current land cover and planning and land use permitting. oil industry in Indonesia.68 There depth of peat soils. Therefore, there is Nonetheless, companies and poli- remains a lack of clarity regard- no legal mechanism for ensuring that cymakers can take immediate steps ing jurisdictions and land rights, these factors are taken into account regarding legal classification chal- and different laws treat tradi- when allocating land-use categories lenges to more sustainable imple- tional land rights in contradic- relevant to achieving goals regarding mentation of palm oil projects. Based tory ways.69 In general, Indo- reducing greenhouse gas emissions on the analysis in this brief, WRI
Issue Brief | October 2013 | 15 recommends the following actions: Engage with initiatives like described in this brief, and con- the RSPO and the Indonesian sider the need for simple, timely, Recommendations for Palm Sustainable Palm Oil to support and coherent procedures. Oil Companies improved land-use classifica- tion policies. Multistakeholder Consider redesigning legal Understand legal reclassifica- initiatives provide opportuni- classification and reclassifica- tion procedure options and ties for companies to share and tion procedures to incorporate share implementation experi- learn best practices as well as to appropriate biophysical and ence. By implementing relevant contribute to efforts to influence social factors relevant to main- options and documenting and government policies in ways that taining high conservation values sharing experiences, companies are consistent with these best and avoiding social conflicts. To can help provide positive legal practices. ensure that new policies are con- precedents and pave the way for sistent with the Indonesian gov- replication. Likewise, challenges Recommendations for ernment’s stated goals related and unsuccessful attempts to Indonesian Policymakers to reducing greenhouse gas pursue reclassification can pro- emissions, conserving biodiver- vide insights regarding potential When designing “land swap” sity, and poverty reduction, the need for procedural reforms. policies, clarify objectives and redesign of legal classification Companies can share their definitions, address existing and reclassification procedures experiences by publishing case laws and regulations, and sim- should ensure that relevant studies with the help of research plify procedures. The term “land biophysical factors (such as land institutions like WRI or through swap” has been used in different cover and peat) and social fac- platforms such as the RSPO. ways to refer variously to chang- tors (such as current land uses ing legal classifications, changing and claims) are incorporated Go beyond legal compliance permits, or changing both. New into legal procedures. and follow best practices. This policies using this term should legal analysis demonstrates that employ clear definitions that are Make data and procedural following legal procedures to consistent with policy objectives. information publicly available the letter does not necessarily In addition, to avoid creating and easily accessible. Publicly guarantee—and may sometimes further confusion, new policies available and easily accessible interfere with—achieving goals should account for existing laws data on biophysical factors such such as maintaining high conser- and regulations such as those vation values and avoiding social conflicts. Therefore, companies should take steps that are not required in the law to assess risks. Such due diligence should start as early as the preliminary site selection process, when deciding whether or not to accept Companies and policymakers can take a location permit (izin lokasi). To do this, companies should seek immediate steps regarding legal classi- additional guidance from initia- tives such as the RSPO, social fication challenges to more sustainable organizations,74 and research institutions such as WRI.75 implementation of palm oil projects.
16 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
as land cover and peat as well as legal factors such as classifica- tions, permits, and rights can help companies, government officials, and communities make better decisions about more sustainable palm oil production. Government initiatives such as OneMap76 are already making progress and should be strength- ened. In addition to providing maps, Indonesian policymakers can make information about procedures more accessible. For example, policymakers can provide regular public updates about the spatial planning pro- cesses and legal status of each of the spatial planning maps created at the district, provincial, island, and national levels. Infor- mation about the status of legal classification procedures should be made readily available when requested using Indonesia’s freedom of information act. The government should also publish and make publically available guidance documents summariz- ing legal procedures, including logistical information such as timelines and relevant contacts.
Through these actions, companies and policymakers can substantially contribute to achieving clearer legal reclassification procedures to support sustainable palm oil in Indonesia.
Issue Brief | October 2013 | 17 Endnotes
1. Indonesia Investments Website. Table: GAR’s Forest Conservation Policy. Indonesia, focusing on land-use planning, “Indonesia’s Palm Oil Production and Export 9. Indonesia’s government sets target to forest governance, community mapping, 2007–13.” http://www.indonesia-invest- reduce its greenhouse gas emissions by capacity building, conflict resolution, remote ments.com/doing-business/commodities/ 26 percent—or 41 percent with interna- sensing, and spatial analysis. palm-oil/item166 tional assistance—while maintaining 7 14. Gingold 2012. “How to Identify Degraded 2. A recent study in Nature Climate Change percent economic growth and 8-10 percent Land for Sustainable Palm Oil in Indone- indicates that 90 percent of lands converted poverty reduction as stated by Presidential sia” by WRI and Sekala describes a quick to oil palm from 1990 to 2010 in Kalimantan Decree 61 of 2011 (National Action Plan and cost-effective method for identifying were forested. Carlson et al. 2012. on Greenhouse Gas Emission Reduction) potentially suitable “degraded land” for 3. Ministry of Forestry. Indonesian Forestry and National Medium-Term Development sustainable palm oil production in Indonesia Statistics 2012. http://www.dephut.go.id/ Plan See http://www.sekretariat-rangrk.org/ and presents results from the application of files/BUku%20Statistik%20Juli%20 and
18 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
cover, peat, conservation areas with buffer revision process, about 15.7 million 36. One example of the forest exchange mecha- zones, water resource buffers) and crop pro- hectares of forest have been suggested to nism is Surat Menteri Kehutanan No.S.13/ ductivity criteria (topography, climate, soil). be converted to nonforest estate in 2010. Menhut-II/2005, which was used to change See http://www.wri.org/project/potico/ By the end of December 2010, there were the status of Baloi Dam Forest Estate in about-suitability-mapper. already 520 forests estate relinquishment Batam. 20. The three main functional categories of applications at the Ministry of Forestry 37. See “Revision of spatial planning” in Article forest estate codified in Law 41 of 1999 on with an average area of 200,000 hectares 16 of Law 26 of 2007 on spatial planning forestry are conservation forest, protection per applicant. See Kesatuan Pengelolaan at http://hukum.jogjakota.go.id/upload/ forest, and production forest. Each of these Hutan pp. 17-18 at http://www.dephut.go.id/ UU%20No.26-2007ttg%20Penataan%20 categories has subcategories, which further files/Buku%20Pembangunan%20KPH%20 Ruang.pdf. define the specific function of each forest. 16%20Des%202011.pdf. 38. Government Regulation 10 of 2010 was For more information on legal catego- 27. For forest to be relinquished to nonfor- amended with Government Regulation 60 rization, see: http://www3.bkpm.go.id/ est estate, the area must fulfill the scoring of 2012. http://www.depdagri.go.id/media/ file_uploaded/Law_4199.htm. requirement of convertible production documents/2012/08/27/p/p/pp_no.60- 21. Despite this number, only 10.8 percent forest. According to Ministry of Agricul- 2012.pdf. of the area has been formally stipulated ture Decree 837/Kpts/Um/11/1980, the 39. According to Minister of Forestry Regula- (ditetapkan) as forest estate and inserted convertible production forest score must be tion P-10/Menhut-II/2010 on Mechanism & into the state gazette (dikukuhkan). The rest less than 125 and reserved for nonforestry Procedure of Forest Estate Audit, the audit of the nonstipulated forest estate was merely purposes. See http://www.satgasreddplus. is conducted through updating the audited designated (ditunjuk) by the Ministry of org/download/Forest%20Lands%20Suit- forest estate data according to its designa- Forestry. See Indonesia Forestry Statistics, ability001.pdf. tion status, rescoring the forest estate and http://www.dephut.go.id/files/BUku%20 28. This method could facilitate the develop- analyzing the overlay of spatial data. See: Statistik%20Juli%202012_terbaru.pdf and ment of community forestry or ecosystem http://kehutanan.kalbarprov.go.id/joomla15/ National Forestry Plan, http://www.dephut. restoration projects. If a forested area is images/peraturan/P10_2010.pdf go.id/files/DitRenHut_RKTN_2011.pdf. classified as convertible production forest, 40. Land rights can be evidenced by recht title/ 22. In urban areas, nonforest estate lands may it can be reclassified within the forest estate, land ownership in the form of (1) Certificate be under the jurisdiction of mayors. for example to permanent production forest, of Ownership or quotation from Letter C 23. Accessible at http://portal.djmbp.esdm. using the forest estate review method. Book or Girik Letter (Surat Girik) from local go.id/sijh/UU%205%20Tahun%20 29. Government Regulation 44 of 2004 on authorities (issued by the head of the rel- 1960_%20UUPA.pdf. It should be noted Forestry Planning stated the scoring of a evant subdistrict/village to the “landowner” that by content, the Agrarian Law applies to forest’s biophysical variables is required to evidencing payment of local land taxes) all land, not only to nonforest estates. There determine forest function. See http://www. or other information that is recognized by is no law or regulation that stipulates that jkpp.org/downloads/PP_No44-2004.pdf. National Land Agency; (2) Certificate of the Agrarian Law should be applied only to 30. See Appendix C1.1. There is no legal Right to Use (Sertifikat Hak Pakai); and nonforest estates. requirement for the Ministry of Forestry (3) other letters/documents admitted as 24. The mechanism is recognized by Govern- to stipulate according to national, provin- evidence of land acquisition or other proof ment Regulation 10 of 2010 on Procedures cial, or district spatial plans (Article 16 of of land ownership. See “Procedures on of Changing the Allocation and Functions of Government Regulation 44 of 2004). As Community Based Development of Forest Forest Estate, paragraph 3, Article 19. See little as 10.8 percent classified as forest Management Program,” p. 32 at http:// http://www.dephut.go.id/files/pp10_10.pdf. estate by maps from the Ministry of Forestry www.redd-indonesia.org/pdf/Buku_Saku_ Minister of Forestry Regulation 33 of 2010 have actually gone through the steps in this PHBM_web.pdf. for further details of this process. stipulation process. 41. See Article 19 of Minister of Forestry Regu- 25. Most of the provinces meet the 30 percent 31. Ministry of Forestry Regulation 32 of 2001. lation P.26/Menhut-II/2005 on Guideline for minimum requirement of forest estate to See Appendix C1 for more information the Use of Forest with Rights. change its forest estate function classifica- 32. See Appendix C1. Processes explained in 42. A five-step procedure, conducted by the tion into convertible production forest and/ Government Regulation 44 of 2004 and district-level Ministry of Forestry official, or to conduct forest estate relinquishment Minister of Forestry Decree 32/Kpts-II/2001. determines enclave eligibility. First, the mechanism. Only 7 out of 33 provinces 33. See Article 10 of Government Regulation social and biophysical features of the area (DKI Jakarta, West Java, Central Java, East 10 of 2010 on Procedures of Changing the are assessed through a site verification. Java, DIY Yogyakarta, Banten, and Bali) are Allocation and Functions of Forest Estate at Second, a feasibility study evaluates the unable to meet the 30 percent forest estate http://www.dephut.go.id/files/pp10_10.pdf. physical feasibility; social feasibility; and requirement. Of these seven provinces, 34. Ibid. economic, cultural and legal and settlement only two (Central Java and East Java) have 35. See Article 12 of Government Regulation history. Third, a variable measurement of significant forested area. 10 of 2010 on Procedures of Changing the the enclave candidate area is made using a 26. Total area reclassified is before the spatial Allocation and Functions of Forest Estate at scoring mechanism. Fourth, the determina- planning revision process. Through this http://www.dephut.go.id/files/pp10_10.pdf. tion of settlement (whether the area can be
Issue Brief | October 2013 | 19 stipulated as enclave area or to be resettled) land-use classification changes are not for fast-tracking the forest estate delineation is made. Fifth, the area is designated an included as part of existing legislation process and developing dispute resolution enclave. See http://bpkh8.net/pemolaan- related to the spatial plan revision process. mechanisms. Amendments to the forest kawasan-hutan/identifikasi-calon-enclave/ However, WRI and Sekala were able to exchange mechanism in 2012 to allow fast for detail of the procedures. introduce perspectives from the local com- tracking for areas that have permits issued 43. Presidential Decree 32 of 1990 on Manage- munity that might have otherwise not been before the Spatial Planning Law of 2007 ment of Protected Areas serves as the considered, facilitate discussions between , which are inconsistent with Ministry of legal grounds to enact a local conserva- decisionmakers and local community Forestry classifications under the 1999 law. tion area with the authority of the governor members, and inform communities of the 58. This number is the sum of all the time and district head (Bupati), stipulated by process and its potential implications. frames detailed in the regulations related to provincial government regulation (peraturan 52. Plantation partnership refers to an inti/ this process. daerah tingkat I – Perda). See Article 34 of plasma scheme. Under Article 11 of Minis- 59. For the 12,000 hectare pilot project area, Presidential Decree 32 of 1990 for details of ter of Agriculture Regulation 26 of 2007, at cost estimates for technical assistance and the procedure at http://www.jkpp.org/down- least 20 percent of an area permitted for oil boundary delineation were US$26,000 loads/Keppres_32_1990.pdf palm development (hak guna usaha) must and US$208,000, respectively. This does 44. See Appendix B “Categories of Forests.” be “plasma,” which is owned by the local not include over US$50,000 in costs for 45. In the context of Project POTICO, the term community, although frequently developed facilitating workshops as a precursor to a “degraded” refers to an area with low carbon and managed by the palm oil company. An negotiation process with the communities stocks and low biodiversity levels. The inti is the rest of the plantation (at most 80 in the area. degraded area identified for this application percent) owned and managed by the palm 60. Many maps are created, including district was selected as “potentially suitable” based oil company. The cooperation agreement level, province level, and island level, all of on a full range of environmental, economic, provides details of how the development which in theory are approved at a national social, and legal criteria developed under and management of the plasma area would level including by the Ministry of Forestry. Project POTICO. Details on this method occur. In theory these maps should be completed can be found in the working paper, “How to 53. See Appendix C , “Enclave Area Designa- and harmonized as per Spatial Planning Identify Degraded Land for Sustainable Palm tion.” Law 26 of 2007. For a legal history see Oil in Indonesia,” at http://pdf.wri.org/work- 54. Including both social and environmental Appendix B. In practice, map harmonization ing_papers/how_to_identify_degraded_ values. has been difficult to achieve and inconsis- land_for_sustainable_palm_oil_in_indo- 55. RSPO 2012, 33. tencies continue between maps, leading to nesia.pdf 56. The concession is given under the Busi- confusion regarding who has jurisdiction 46. Obtaining the free, prior, and informed ness License for the Utilisation of Forest over which areas. Since the enactment of the consent of local people is a requirement Timber Products through Restoration of the Spatial Planning Law in 2007, only 8 out of the RSPO’s Principles and Criteria. The Ecosystem (Izin Usaha Pemanfaatan Hasil of 33 provincial spatial plans and 19 out of RSPO provides a guidance document to Hutan Kayu-Restorasi Ekosistem - IUPHHK- 398 district spatial plans have been passed companies at http://www.rspo.org/en/docu- RE). This type of concession can be given by law. ment_fpic by the Ministry of Forestry as a business 61. See National Forestry Plan p. 8, at http:// 47. Location permit (izin lokasi) is a permit license to develop a zone in natural forest www.dephut.go.id/files/DitRenHut_ given to company to acquire the land categorized as production forest that has RKTN_2011.pdf and Appendix B for details needed for investment and it also serves critical ecosystem functions that need to be on forest gazettement process. as permit to transfer rights and to utilize preserved through maintenance, protection, 62. See Wells et al. 2012. The “MK Court the land for business purposes. The permit and restoration of the forest ecosystem. decision” in 2012 resulted in a Supreme is given by the National Land Agency. For Activities allowed by this permit include Court decision that forest estate must be more information on location permit, refer assisted regeneration and enrichment plant- “stipulated” and not simply “designated” – to Head of National Land Agency (BPN) ing of local species, breeding of fauna, and but it is unclear what the implications of this Regulation 2 of 1999 at http://hukum.unsrat. releasing of flora and fauna to their natural are in practice. ac.id/men/menagraria_2_1999.pdf habitat to restore biotic elements (flora and 63. See Note from Minister of Forestry 2012 at 48. See Greenpeace Scorecard on Palm Oil fauna) and abiotic elements (soil and water) http://www.dephut.go.id/files/SE.3_Men- Producers http://www.greenpeace.org/inter- to a region with native species to achieve hut_II_2012_Putusan%20Mahkamah%20 national/en/publications/Campaign-reports/ biological and ecosystem balance. For more Konstitusi_edited_0.pdf. Forests-Reports/Palm-Oil-Scorecard/ detailed information on this permit, refer to 64. Direktorat Jenderal Planologi Kehutanan 49. Gingold et al. 2012. Minister of Forestry Regulation 50 of 2010, website, http://appgis.dephut.go.id/appgis/ 50. This process had just begun, according http://lpp.dephut.go.id/SFile/peraturan/ 65. Or that have implementing instructions to Spatial Planning Law of 2007. This law p1.pdf, and Procedures for Requesting that are vague and highly dependent on states that national, provincial, and district IUPHHK-RE, http://www.dephut.go.id/ individual politician decisions without clear spatial plans must be constructed and files/Tata%20Cara%20Permohononan%20 criteria and therefore potential for arbitrary approved. Dan%20Pemberian%20%20IUPHHK-RE. decisions (e.g., get a letter of recommenda- 51. Comprehensive procedures for obtaining pdf tion from regent). free, prior, and informed consent of local 57. For example, proposed REDD+ policies and 66. Amendments to the forest exchange mecha- communities with regard to potential legal the Ministry of Forestry plans have called nism in 2012 to allow fast track for areas
20 | How to Change Legal Land Use Classifications to Support More Sustainable Palm Oil in Indonesia
that have permits that were issued before REFERENCES the Spatial Planning Law of 2007, which are inconsistent with Ministry of Forestry Akiefnawati, R., G. B. Villamor, F. Zulfikar, I. classifications under the 1999 law. However Budisetiawan, E. Mulyoutami, A. Ayat, and M. much confusion remains and rapidly chang- Van Noordwijk. 2010. “Stewardship Agreement to ing amendments, policies, etc., are hard to Reduce Emissions from Deforestation and Degra- follow. dation (REDD): Case Study from Lubuk Beringin’s 67. For example, Government Regulation 2010 Hutan Desa, Jambi Province, Sumatra, Indone- has a whole option that is not described in sia.” International Forestry Review 12(4):349–60. detail by ministerial decree. http://www.bioone.org/doi/abs/10.1505/ 68. Kompas.com News. “8.000 Konflik Agraria ifor.12.4.349. Belum Diselesaikan.” http://nasional.kom- pas.com/read/2013/02/08/01585120/8.000. Carlson, K., L. Curran, , G. Asner, , A. Pittman, , Konflik.Agraria.Belum.Diselesaikan. S. Trigg, , and J. Adeney. 2012. “Carbon Emis- 69. Colchester et al. 2006. sions from Forest Conversion by Kalimantan Oil 70. There are laws that acknowledge private Palm Plantations.” Nature Climate Change 3: property rights and customary rights to 283–87. http://www.nature.com/nclimate/journal/ land, however, these rights come after “pub- v3/n3/full/nclimate1702.html#/ref-link-10. lic and state interest” (kepentingan umum dan negara) in which the state is given Colchester, Marcus, Norman Jiwan, Andiko, authority to determine what constitutes Martua Sirait, Asep Yunan Firdaus, A. Surambo, public and state interest. For more informa- and Herbert Pane. 2006. Promised Land: Palm tion about the hierarchy of laws, traditional Oil and Land Acquisition in Indonesia: Implica- rights issues, etc., see Appendix A. tions for Local Communities and Indigenous 71. The official data on forest estate release Peoples. Forest Peoples Programme and Sawit are accessible at http://www.dephut.go.id/ Watch, Indonesia. http://www.forestpeoples.org/ index.php?q=id/node/7604 and http:// topics/palm-oil-rspo/publication/2010/promised- www.dephut.go.id/files/Statistik%20 land-palm-oil-and-land-acquisition-indonesia- 2011Ditjen%20Planologi%20Kehutanan. implicat. pdf. 72. Hutan Desa in Lubuk Beringin, Jambi, is an Gingold, Beth, Anne Rosenbarger, Yohanes I Ketut example of the first Hutan Desa case recog- Deddy Muliastra, Fred Stolle, I Made Sudana, nized by the Ministry of Forestry. For more Masita Dwi Mandini Manessa, Ari Murdimanto, information see Akiefnawati et al. 2010. Sebastianus Bagas Tiangga, Cicilia Cicik Madu- 73. There are no specific references to “high sari, and Pascal Douard. 2012. “How to Identify conservation values” or “free, prior, and Degraded Land for Sustainable Palm Oil in Indo- informed consent” in existing Indonesian nesia.” Working Paper, April, World Resources law. For more information on FPIC and Institute and Sekala, Washington DC. http://www. palm oil in Indonesia, refer to http://www. wri.org/publication/identifying-degraded-land- forestpeoples.org/topics/palm-oil-rspo/pub- sustainable-palm-oil-indonesia. lication/2012/conference-paper-free-prior- and-informed-consent-and-oil-palm-. RSPO (Roundtable on Sustainable Palm Oil). 74. Such as Sawit Watch (www.sawitwatch. 2012. “Report of the Field Investigation in Central or.id/) and Forest Peoples Program (www. Kalimantan of the RSPO Ad Hoc Working Group forestpeoples.org) on High Conservation Values in Indonesia.” 75. WRI provides online tools to help assess http://www.forestpeoples.org/sites/fpp/files/pub- such risks: The Suitability Mapper at http:// lication/2012/08/final-report-field-investigation- www.wri.org/applications/maps/suitability- rspo-ad-hoc-wg-hcv-indo-july-20113.pdf. mapper/, and Forest Cover Analyzer at http://www.wri.org/applications/maps/ Wells, Philip, Neil Franklin, Petrus Gunarso, forest-cover-analyzer/ . Gary Paoli,Tiza Mafira, Dimas Riyo, Kusumo 76. Currently under development and scheduled Ben Clanchy. 2012. “Indonesian Constitutional to be released by the end of 2013. For more Court Ruling No. 45/PUU–IX/2011 in Rela- information, see http://www.satgasreddplus. tion to Forest Lands, Implications for Forests, org/download/120905%20ONEMAP%20 Development and REDD+.” Daemeter Consult- Midway%20Workshop%202012.pdf ing. http://www.daemeter.org/wp-content/files/ Policy_Brief_Constitutional_Court_Decision_ No_45_PUUIX_2011.pdf.
Issue Brief | October 2013 | 21 About the Authors Acknowledgments Anne Rosenbarger is a Fellow with WRI’s The authors are grateful to the following col- We would like to thank WRI’s experienced Project POTICO, based in Bali, Indonesia. She leagues and peers who provided critical reviews publication team, particularly Ashleigh Rich. The coordinates field activities and engagement with and other valuable contributions to this publica- authors are also grateful to Emily Schabacker for the Roundtable on Sustainable Palm Oil and tion: Andhyta Utami (WRI), Patrick Anderson editing and proofreading and Mary Paden for contributes to publication and product develop- (Forest Peoples Program), Kemen Austin (WRI), copyediting. Special thanks to Nick Price for the ment. Her work focuses on issues related to the Crystal Davis (WRI), Chip Fay (CLUA), Craig publication layout. Thanks also to WRI’s external utilization of degraded lands, land- use planning, Hanson (WRI), Lisa Johnston (WRI), Moray relations team for promoting this work, specifi- community rights, and conservation of forests Mcleish (PWC), Sophie Persey (REAKaltim), Ja- cally James Anderson for putting together a web and high conservation value areas. net Ranganathan (WRI), Nigel Sizer (WRI), Alfred story for the release of this paper and for his contributions to the executive summary. Contact: [email protected]. Stolle (WRI), Peter Veit (WRI). The authors thank the following for their generous Beth Gingold, Schools Conservation Coordinator The authors are extremely grateful to Sekala , financial support: the NewPage Corporation, for the District of Columbia Department of General whose partnership made this work possible. Walmart, the Netherlands Ministry of Foreign Services, currently leads the recycling program in In particular we thank Yohanes I Ketut Deddy Affairs, the Swedish International Development D.C. Public Schools. While a Research Associate Muliastra, Sekala’s director, and Made Sudana who Cooperation Agency, the International Finance at WRI, she managed Project POTICO’s research managed the implementation of the POTICO pilot Corporation’s Biodiversity and Agricultural team and the production of the Forest Cover Ana- site activities in Kapuas Hulu, West Kalimantan. We Commodities Program (the International Finance lyzer and Suitability Mapper websites. also thank Julius Lawata and Ari Murdimanto of Sekala for facilitating community engagement and Corporation is not responsible for the implemen- Contact: [email protected]. participatory mapping in and around the pilot site. tation or administration of this project), and the UK Climate Change Unit of Indonesia (UKCCU). Rauf Prasodjo is a former a Research Analyst We extend a special thanks to the Indonesian with WRI’s Project POTICO and the Governance Center of Environmental Law (ICEL) for providing This report is released in the name of the World of Forest Initiative. While at WRI, his primary re- its time and expertise. Resources Institute (WRI) and represents the search focused on policies related to oil palm ex- perspectives and research of its authors alone. It pansion, land use, land-use change, and forestry The authors would like to thank PT Smart for its does not necessarily represent the views of WRI, (LULUCF) spatial planning and forest governance partnership at the POTICO pilot site, in particular the publication reviewers, Sekala, PT Smart, the in Indonesia. He is currently a graduate student Jean Pierre Caliman, Yap Jia Jiun, Susanto, and NewPage Corporation, Walmart, the Netherlands at the Yale School of Forestry and Environmental the plantation staff in Badau, Kapuas Hulu. Ministry of Foreign Affairs, the Swedish Interna- Studies, New Haven. tional Development Cooperation Agency, Johnson Contact: [email protected]. The authors would like to express their gratitude to & Johnson, the International Finance Corpora- the local officials from the offices of Dinas Perke- tion’s Biodiversity and Agricultural Commodities Ariana Alisjahbana is a Research Analyst with bunan dan Kehutanan, Bappeda, and the Bupati of Program or the UK Commission WRI’s Forests Initiative, focusing on land-use Kapuas Hulu as well as the Camat and subdistrict on Climate Change. challenges in forested tropical countries, including government staff of Badau for their support and forest governance, forest monitoring, sustainable participation in POTICO activities at the pilot site. agriculture, and commodities. She coordinates all We also thank the Ministry of Forestry national of- Indonesia-related work across the Institute. fice and Baplan provincial office of West Kaliman- tan for their feedback regarding implementation of Contact: [email protected]. the methods described in this brief.
Andika Putraditama is the Outreach Officer for We are grateful to the NGOs active in the Kapuas WRI’s Project POTICO, based in Jakarta, Indo- Hulu area, particularly Pancurkasih, People nesia. His work focuses on engaging Indonesian Resources and Conservation Foundation (PRCF), and international stakeholders on agriculture, Flora and Fauna International (FFI), and Gesell- forestry, and land use issues in Indonesia. schaft für Internationale Zusammenarbeit (GIZ), Contact: [email protected]. for their participation in POTICO workshops and for collaboration on influencing the spatial plan- Dewi Tresya is a legal researcher in Indonesia. ning revision process in the region. She focuses on environmental law, especially in forestry, peat land, and climate change. She The authors would also like to thank the local com- has extensive experience in the regions of Riau, munities in the Kapuas Hulu area, particularly those Central Kalimantan, East Kalimantan, and West in Badau and Batang Lupar subdistricts for their Nusa Tenggara. Currently, she works as legal feedback regarding land use and development issues researcher for the Indonesian REDD+ Task Force. and for their participation in Project POTICO. Contact: [email protected].
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