POSITION PAPER Dirty Plan behind Palm Oil Bill Position Paper WALHI | 1 A. Introduction Palm oil plantation is a plantation plant In accordance with WALHI record, 21 out commodity which is the biggest in terms of 28 Regional offices have done advocacy of its land use in Indonesia. In accordance for monoculture plantation, which has to Directorate General of Plantation, the caused conflict and significant ecological Ministry of Agriculture data, there are damages. Furthermore, the Agricultural 11,672,861 hectares of palm oil plantation Reform Consortium (KPA)1 noted that there areas; while Corruption Eradication were 450 agricultural conflicts throughout Commission (KPK) states that the total area 2016. According to the conflict record, 163 of palm oil plantation in Indonesia is 15.7 conflicts (36.22%) happened in plantation million hectares. Based on KPK data, only sector dominated by the expansion of 28.03% of such palm oil plantation is owned palm oil plantation. Most of the palm oil by the community; the other 3.14% is owned plantation conflict includes the overlapping by State Owned Enterprise and 68.83% is with the people management land and due under private investment control. Such space to functional shifting of the forest and forest controlling condition obviously represents area causing the loss or damage on living the domination of palm oil plantation in sources of the community. Indonesia by Investment. The relation between conflict and releasing The dominating investment situation over forest area is shown from the total area of palm oil plantation in Indonesia has in fact forest being shifted for its function. Based on left devastating mark to the social and processed data from Ministry of Environment environment condition which can be seen and Forestry, there are more than 5 million from the record of conflict and environmental hectare forest areas that has been shifted for impact resulted from its activity. its function becoming palm oil plantation area within 1987 to 2016. It reached its highest point of shifting function of forest area during 2013 and 2014. 1. Konsorsium Pembaharuan Agraria, Catatan Akhir Tahun 2016, Liberalisasi Agraria Diperhebat, Reforma Agraria Dibelokkan. 2 | Position Paper WALHI Picture 1. Map of hot spot distribution in permitted area and non-permitted area in 2013 Picture 2. Map of hot spot distribution in permitted area and non-permitted area in 2014 Position Paper WALHI | 3 Picture 3. Map of hot spot distribution in permitted area and non-permitted area in 2015 Another bad impact of palm oil plantation is This is proven by the decision of the House of regarding hot spots distribution throughout Representative of the Republic of Indonesia 2013 until 2016, during which the palm (DPR-RI) that considers Palm Oil Bill to oil plantation, particularly HGU and IUP be part of the National Legislation Program Plantations, was considered as one of the (Prolegnas) in 2016 and 2017; and continues biggest contributors for hot spots in Indonesia. the harmonization process as well as internal In addition to its relation with forest and discussion in DPR-RI despite the fact that the land fires, palm oil plantation contributes to Government considers there is no urgency the other ecological disasters, such as water in discussing this RUU. Nevertheless, the crisis, flood, etc. substance of this RUU shows the tendency of siding towards investment and ignoring the The above explanation at least illustrates that social as well as environmental aspects. the promise for welfare resulted from palm oil investment is merely an imagination. Unfortunately, the reality of negative impact caused by palm oil plantation is not counted into consideration in preparing the national political legislation. Dok. Milieudefensi/Kemal Jufri | Palm Oil Pontianak 4 | Position Paper WALHI B. Threat Notes on Palm Oil Bill 3. It mentions principle of environmental At the end of 2016, DPR-RI was officially preservation in the palm oil plantation deciding again that Palm Oil Bill was practice (Article 2 letter J). Such included in the 2017 Prolegnas Priority. Such principle obviously contradicts with ratification is the continuation of DPR policy, the palm oil principle, palm oil of which in 2015 stipulated this Bill to be development is indeed related to the included in the 2016 Prolegnas Priority. Bad loss of forest coverage and damage of intention of this Bill is starting to get obvious soil and water ecosystem; after the disclosure of the academic text and Bill draft, in which the spirit of this Bill is 4. 4. Opening opportunities for the clearly and obviously ignoring the interest of exploitation and even opening of peat the community (plantation) and environment. ecosystems for oil palm plantations In regards with such matter, WALHI (Article 9 paragraph (2), Article 23 identifies several crucial articles showing the paragraph (4), Article 50, Article 51). real intention of Palm Oil Bill2 that supports This provision is certainly contrary to the investment, including: spirit of protection of the peat ecosystem and the Government’s efforts to prevent 1. Considering Preamble letter b states forest and land fires. The position of that palm oil is one of the biodiversity the Moratorium Presidential Instruction resources becoming the strategic will not be empowered against the commodity and has big contribution substance of this bill if it is ratified; and potential in the national economy development for the welfare of 5. 5. The existence of a provision that the people. This is an unfounded negates the criminal liability scheme assumption since the Palm Oil Bill with the limitation of the system of substance is indeed dominated administrative accountability only by the provision for giving extra (Articles 16 and 53). Should the intensive and privilege to investment; fulfillment of administrative violations may be fulfilled by the element against 2. Considering Preamble letter c the law in some criminal provisions; states that palm oil is not regulated comprehensively and integrated 6. Provision of special facilities / intensive according to the need and development to investors / investment, which is of law. Such considering statement is reduction of corporate income tax; non-sense for the fact that Law Number exemption or relief of import duty on 39 of 2014 regarding Plantation is still the import of goods; exemption or relief relevant and accordingly regulates the of import duties on raw materials or palm oil management system as one of auxiliaries for production purposes; the plantation plants; exemption or suspension of value added tax on import of capital goods or machinery or equipment for production purposes not yet produced domestically; accelerated depreciation or amortization; earth and building tax relief; and / or 2. Draft Juni 2017. product marketing assistance through agencies or agencies (Article 18). Position Paper WALHI | 5 Substance of formulation of Article 18 is 10. The concentration of people’s cultivation contrary to the Government’s efforts system on only palm oil commodity to increase state revenues from the (Article 29). This will promote the tax sector. In addition, in the principle acceleration of agricultural land of justice, the one that shall be getting conversion into palm oil plantation; access and subsidy is the poor, not the big-scale businessman who certainly has 11. 11. The blurring of history by the ability to fulfill his obligation fully; making palm oil a part of Indonesia’s genetic resources (Article 34); 7. The legalization of crime in forest area (Article 24 paragraph (2). Although 12. Excessive allocation of national this provision sets forth in particular fertilizers for oil palm and subsidies for the Planter, there is a threat for this imported fertilizer use (Art 47). Against provision to be abused by falsifying this provision there are two threats. document of big-scale individual and Firstly, the increasing use of chemical corporate plantation relocation to be fertilizers and the potential for opening owned by Planters for the acceleration new fertilizer plants to meet the needs process of plantation legalization; of large-scale oil palm plantations is increasingly high. Secondly, there is 8. The existence of de-legitimization potential for unavailability of fertilizer efforts on land rights and indigenous allocation for other plantations, as well people’s cultivation systems (Articles as inaccurate target of fertilizer subsidies 25 and 26). This provision has the dominated for investment needs; potential to change the traditional cultivation tradition of indigenous and 13. Government facility for water supply tribal peoples. Furthermore, it has the and peat management (Article 49 potential to eliminate the independence and 50). This provision adds the and customary law community over burden for the Government to give their customary lands, in which the special facility potentially to be patterns of land delivery open up the used for big-scale investment; potential loss of indigenous peoples’ rights over a long period of time; 14. Any compensation for eradication of palm oil attacked by pests. There 9. Open the opportunity of land banking, is no difference on compensation in which determined the land owning receiver between the community and for 100,000 hectare at the most for corporate. It may cause additional Corporate, not for each holding company financial burden of the state; (Article 27). This provision opens the opportunity for holding company to create “shadow company”