LARGE-SCALE PALM OIL PLANTATION DEVELOPMENT, CUSTOMARY LAND ACQUISATION AND LOCAL PROTESTS: An Experience of West Sumatra, Indonesia.
LARGE-SCALE PALM OIL PLANTATION DEVELOPMENT,
CUSTOMARY LAND ACQUISATION AND LOCAL PROTESTS:
An Experience of West Sumatra, Indonesia1
By: Dr. Afrizal2
INTRODUCTION
Having inherited poor economic condition from Soekarno's government, led
by Soeharto, the New Order regime attempted to achieve high economic growth by
implementing its five-year development plans begun in early 1970s. For this, the
New Order government stimulated investment in which two important policies were
implemented: Firstly, the state itself invested in resource-based industries in rural
areas (Bowie and Unger 1997, pp. 49-52); Secondly, the concentration on inviting
foreign capital was intense, and this made the Indonesian state at that time “really
became a foreign investor’s paradise” (Taylor 1974, p.18).
Then, the decline of revenue from oil brought about tremendous
development in agricultural sector. This is because the New Order government
endeavoured to find alternative sources of income, one of them was in the field of
agro-industry (Fauzi 1999, pp.162-186), in this case, the government viewed
agriculture as “a major catalyst for economic development” (Kuntjoro-Jakti 1981, p.
42). To increase the contribution of agriculture to the national economy, apart from
efforts to grow rice/food production, export-oriented agricultural products such as
rubber, palm oil, coffee and tea were developed (Langill 1978, p. 184). Palm oil
plantations are the most important one, which recently has grown dramatically both
in terms of the area of plantations and number of large-scale palm oil plantation
companies.
Based on an intensive study in West Sumatra3 and focus the attention to the
process of land acquisition, this article will shows that the development of large
scale plantations has serious implications for local people in the region. The process
of land alienation lacked recognition and respect of customary rights (hak ulayat)
1
2
3
Paper presented at “Seminar Antarbangsa Tanah: Keterhakisan Sosial dan Ekologi-Pengalaman
Malaysia dan Indonesia, Dewan Bahasa dan Pustaka, Kuala Lumpur 4-5 Desember 2007.
Graduated from the Asia Centre of the Flinders University and now is a senior lecturer at the
Department of Sociology Fac. of Social and Political Sciences, Andalas University.
The data used for this paper are my research findings in West Pasaman District, which is a centre
of large-scale palm oil plantations in West Sumatra.
1
by the governments and businesses took advantage of this and, therefore, they also
did not respect local people’s customary rights. This brought about local people lost
their customary land and conflicted with palm oil companies.
THE TREND OF PALM OIL PLANTATION GROWTH IN INDONESIA
Although palm oil plantations have existed in Indonesia since 1911, there
was a new phase of development after 1940 although by that year it was already one
of the important crops in the country. Great need for palm oil in Europe 4 brought
about remarkable increase in the size of palm oil plantation areas in Indonesia. It
was only 1.2 thousand hectares in 1916 and increased little to 109.6 thousand
hectares in 1940, and even up to in 1978 the area increased only to 250,000 ha. But
then, this increased dramatically to more than 2 million ha in 1998/1999. By 2004, it
was reported about 4.1 million ha of land and in 2006 about 6.1 million ha of land
were used for palm oil plantation but concentrated only in the Island of Sumatra and
Kalimantan. Some 50% of them were controlled by private large-scale plantations.
There were 170 palm oil estates recorded in 1985, which was number four after
rubber, tea and coffee in that year. By 1999 the number of palm oil estates had
jumped four-fold to 683 (Biro Pusat Statistik, 1985, p. 248 and 1999, pp. 208-9,
Soetrisno et al. 1991, pp.72-75, PDBI 1998 in Basyar 1999, p. 35 and Colchester et
al., 2006, pp. 21-22). This makes “Indonesia now leads the world…and set to
become the number one palm oil producer overtaking Malaysia by 2010, or even
earlier” (Colchester 2006, p. 25).
The incredible development of the palm oil plantations was related very
much to the governments’ actions because it was the governments in Indonesia that
had a major role in their development. The central and the local governments
encouraged and facilitated their development. They provided the needs of investors
to establish their large-scale palm oil plantations by issuing permits, allocating land
and guaranteeing investors to be able to control land in long term by issuing long
lasted Commercial Use Leases, HGU). It is important to look at why the
governments encouraged and facilitated their development.
4
For more information, read Colchester (2006).
2
There was a rather populist idea behind the development of palm oil
plantations. It was true that the development of palm oil plantations was seen by the
central government as a tool for improving macro-economic performance for it can
increase exports (Basyar, 1999, p. 49 and Bachriadi, 2001, p.229). But the
development of palm oil plantations was also seen by the governments as a tool to
improve local people’s economy. The provincial and district apparatuses also saw
the development of palm oil plantations as fundamental for the improvement of local
community economy (Afrizal 2005, pp. 112-113 and 2007, pp. 95-96 5). This can
be seen from the fact that the governments attempted to prevent the large-scale
plantation corporations’ monopoly on palm oil plantations, and wanted that local
people had share in the plantations. For this, from 1974-1975 the governments
introduced and applied a new mode of plantation production, the Nucleus Estate and
Smallholder (NES) mode of plantations to improve the well-being of small farmers,
(Soetrisno et al. 1991, p. 94-95), and even 1986 the Presient isued a decree to
support this model (Asian Agri 2007). Under this scheme, a plantation consists of
two parts: a nuclear estate that is the asset of big investors; and smallholder
plantations (kebun plasma), which is the asset of small farmers (Soetrisno et al.
1991; pp. 95-96, Basyar 1999, p. 66; Fauzi 1999, pp.187-188 and Bachriadi 2001,
p.239).
Both plantation investors and the state play significant roles in NES
development. The former is responsible for developing of plantation smallholders
(kebun plasma), improving the management quality of plantation smallholders and
buying their palm oil fruits. The latter is responsible for recruiting recipients of the
plantation smallholders, organising land for the plantation and providing loans for
the development of the smallholder plantations 6 (Soetrisno 1991, pp. 99-100). The
recipients of smallholder plantations obtain three plots of land from the state: two
hectares of plantation land; 0.75 hectares of land for farming and 0.25 hectares of
land for settlement (Soetrisno 1991, p. 99).
5
Colchester at all (2006) in many pages of their book informs that for local governments in many
places in Indonesia palm oil plantations were viewed vital for local economy improvement.
6
The recipients of smallholder plantation pay back the loan to the government by instalments of
30% of their sales. These instalments are collected through plantation companies that embrace the
smallholder plantations and buy their product (Soetrisno 1991, pp. 100-101).
3
THE CASE OF WEST SUMATERA
West Sumatra Became A Centre of Large-Scale Palm Oil Plantations
Palm oil plantations were introduced to West Sumatra by the Dutch before
independent with the first palm oil plantation, Ophier, was established in what now
West Pasaman in 1934. It used about 1100 hectares of land, began to produce in the
time of Japanese occupation but was destroyed during the second Dutch aggression
of 1948 (Departemen Penerangan 1953, pp. 730-739). Then, in early 1980s the
government of West Sumatra, supported by the West German Development Bank
(KFW), developed the area as a palm oil plantation again. At this time, the Nucleus
Estate and Smallholder (NES) mode of plantation production was introduced
(Soetrisno et al. 1991, p. 104).
Local governments played a significant role in the development of West
Sumatra became one of the centres of palm oil plantations. The local governments
invited or facilitated investors to invest in West Sumatra. For example, in the middle
of the 1980s the head of Pasaman District gave much attention to palm oil plantation
development in the area by inviting private investors and providing the nagari
community’s communal land for investors’ palm oil businesses (Singgalang 29
October 1989).7 The result of an interview with a local informal leader who was
involved much with the development of palm oil plantations in Pasaman shows how
it happened. Pak NJB, a 60 year old man who was a retired Haluan newspaper
journalist living in Simpang Empat, knew much about the history of large-scale
palm oil plantation development in West Pasaman. He remarked:
In the middle of the 1980s, after visiting the Ophier palm oil plantation that
was run by PT. Perkebunan Nusantara VI, private investors came to Pasaman
sub-district lineage leaders including Nagari Kinali to ask for land. The
lineage leaders told them to approach the Pasaman state apparatus for this
purpose. At that time, local lineage leaders were supportive to the investors.
After that, the head of Pasaman District (Rajuddin Nuh) invited all the
kinship group leaders of Pasaman sub-district including Nagari Kinali to
7
Information was also gained by interviewing a staff member of the Plantation and Agriculture
Office of Pasaman District who was a member of a team for land alienation in Kinali for private
investors, 9 April 2002, Lubuk Sikaping.
4
discuss agribusiness development in the region. The head of the district tried
to persuade the kinship group leaders to provide their communal land for
palm oil plantation development. He said that the development of the
plantations would benefit lineage members. The head of the district said that
they would be provided with plantation partnership by corporations as had
occurred at Ophier plantation. Accordingly, the kinship group leaders agreed
to provide their communal land for private investors.8
The other research’s findings confirmed this (see Colchester et al. 2006, pp. 132133).
The West Sumatran government's policies to encourage and facilitate
investors in palm oil plantation resulted in many large-scale (above 1000 ha) palm
oil plantation companies (several of them with their own mills) operated in West
Sumatra. Up to 2001, there were 41 companies operated in West Sumatra, controlled
about 336,600 ha to 489,000 ha of land9, and more and more of them are owned by
Malaysian investors recently10. Although the area of palm oil plantation in West
Sumatra is only one-third of the area of the same plantations in Riau Province, this is
number 4 in Indonesia after Riau, North Sumatra and Central Kalimantan
(Colchester 2006, p. 24).
Palm Oil Plantations for the Improvement of Local Community's Welfare
The ideas behind the development of large-scale palm oil plantations in West
Sumatra
by inviting big investors were to improve local people's economic
livelihood, besides, offcourse, to provide sources of revenue for the government. It
was clear that local state apparatuses and the Province of West Sumatra viewed the
development of palm oil plantations as crucial for the economic improvement of
local communities11 (BAPPEDA Tingkat I Sumatra Barat and BPS Sumatra Barat
1983, p. 49). The contents of conversation between local government officials and
local community members reveal this. For example, in 1989 the head of the
Pasaman District, Rajuddin Nuh, said that the development of large-scale palm oil
plantations in
the region
was designed
to apply the Nucleus Estate and
8
Interview with Pak NJB, 7 May 2002, Simpang Empat.
Because of scarcity of land, only few new companies invested in palm oil plantations in West
Sumatera.
10
Personal communication with a number of representatives of Malaysian palm oil plantation
companies during my attendance at RSPO meetings.
11
In opposition some analysts argue that the development of large-scale oil palm plantations caused
deforestation (see Basyar, 1999, p.104).
9
5
Smallholder scheme in order that local people obtain benefit from the development
of large-scale palm oil plantations. Quoting the head of the district, Singgalang news
paper reported that “…investors must involve the local community by providing
smallholder plantations, particularly to those whose land is utilised by the investors”
(Singgalang 29 November 1989). When the Bupati attended the ceremony to mark
the beginning of palm oil planting of a given grower he said again that the company
must organise smallholder plantations for landholders (Singgalang 29 November
1989). The other study also confirms this with the researchers concluded their
findings that “the Bupati of Pasaman said that the main goals of estates development
was to improve the welfare and standard of living of the local population (Colchester
et al., 2006, p. 133).
It can be concluded from the above discussion that in West Sumatra, palm oil
plantations should have been organised in such a way that local people must obtain
the advantage of the development of palm oil plantations. This is should be done by
applying Nuclear Estate and Smallholding model. Local government officials
labelled this model bapak angkat-anak angkat (step parents-step children model).
What is meant is that local people
be provided with smallholding palm oil
plantations as part of the development of large-scale palm oil plantations owned by
big investors. However, as will be discussed below the development of the largescale palm oil plantations ignored local people’s rights, based on their customary
laws, and this is contradictory to the aims of the development of large-scale palm oil
plantations in Indonesia in general and in West Sumatra in perticular.
Unfair Processes of Customary Land Acquisition
1. Land Taken Over By Plantation Companies Without Landholders' Free
Consent
It was found that there were pal oil companies that had taken over land by
force from local landholders. Sometime, police personnel get involved in supporting
the companies. The table 2 below shows an example of local people's land taken
over by force by plantation companies in a nagari in West Pasaman District.
6
Table 1. Local People’s Protests over Illegally Taken Land In Nagari Kinali
Protesters
Date
Company and complaint
Farmers association of Padang
Sungkai/Air Meruap
Oct. 3 1997
Backed up by two army personnel, PT.
TR took their fish ponds by force.
Eight kinship group leaders
Oct. 25 1996
M. Dt. Majobasa, M. Zaman and
Samsir
Oct. 24 1999
Bukini and six friends
June 19 1996
Farmers associations of Aur
Serumpun and Batang Lambau April 10 2000
hamlets
130 Javanese transmigrant farmhouseholds
July 17 1998
PT. AMP was accused of planting
beyond land provided and hiding
documents showing the real size of its
plantation.
PT.PN VI took their farming land
without their consent
PT. PMJ took their rice field without
their consent.
Land size
(ha)
70
Unknown
Unknown
Unknown
PT. PN VI took their farming land by
force.
197
PT. TSG took their land without their
agreement.
87
Sources: 1. Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
2. See the letter of the Dewan Pengurus Daerah to DAN DEM POM 1/6 Sumatera
Barat on 16 October 1997 (author given a copy of the letter from datuak BBS).
3. See the letter of the leaders of the farmer associations of Aur Serumpun and
Batang Lambau hamlets to the director of PT. PN VI on April 10, 2000.
4. Interviews with datuak BBS, 7 May 2002; ABMA, 25 April 2002; datuak MM,
27 April 2002; datuak LJN, 21 April 2002; and IMS, 7 May 2002, Nagari Kinali.
Unfulfilled Adat Requirement: Siliah Jariah
Local people protested to palm oil plantation companies demanding the
fulfilment of siliah jariah (communal land improvement compensation as the
compensation for improvements carried out by local landholders on their communal
land, such as creating irrigation schemes) be made. In most cases kinship group
leaders requested that palm oil plantation companies pay adat payments (customary
dues) and provide their kinship members with schemed smallholder plantations, this
was because they had not sold their communal land neither to the state nor to the
companies. The companies gave them the requested adat payments. However, local
people also demanded that the companies pay compensation for communal land
improvement because part of the land that the companies now utilised had been local
people's cultivated communal land.
7
Companies did not make communal land improvement compensation
because the need for this payment to be made was not identified at the time of the
process of customary land acquisition carried out by the local government land
alienation committee. As a result, the company management did not recognise the
necessity of this payment (Afrizal 2005, p. 123-125, 2007, 105-107).
Unfulfilled Promised Schemed Smallholder Plantations (Kebun Plasma) as
Compensation for Customary Land Provided12
Both the local government and plantation companies had promised
customary landholders that they would gain schemed smallholder plantations in
return for the their customary land they provided to the companies through local
governments or directly to them. This was stated explicitly in the letters of
communal land alienation (the land alienation transfer statements).13 For example,
the letter of communal land alienation of nine kinship group leaders of Nagari Kinali
stipulated that ‘based on providing land mentioned in the first point, the second
party (the Bupati of Kabupaten Pasaman) has an obligation to organise the
development of plantation in the form of step father and step child (smallholder
plantations)’.14 The letters mention that about 60 to 70% of total land provided for
investors by local landholders was for the nucleus estate of the corporations while 40
to 30% was for smallholder plantations.15 There was a different case of a palm oil
company. Although, schemed smallholder plantations are not mentioned in the letter
agreeing to transfer communal land to the company, both the Bupati of Kabupaten
Pasaman and the management of the company had promised orally to landholders
that they would be provided with the schemed smallholder plantation (Singgalang
29 November 1989).
12
A 2 hectares of palm oil plantation that is owned by an individual farmer but organized by an
estate.
13
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993, by two local kinship group leaders Kinali for PT. AMP,
29 November 1994, by two kinship group leaders for PT. AMP, 22 May 1995, and by eleven
kinship group leaders for KUD Harapan Kinali, 8 December 1994.
14
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993.
15
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993, and by two kinship group leaders of Nagari Kinali for PT.
AMP, 29 November 1994.
8
However, as far as smallholder plantations are concerned, local communal
landholders were neglected. The promised schemed smallholder plantations were
not provided, while companies concentrated on their own estates. In certain cases,
smallholder plantations were not developed at all, while local people provided land
for this. In other cases, smallholder plantations were developed even produced, but
these plantations are kept by companies.
Customary Land Became the State Land Without Local Landholder' Knowledge
and Consent
In West Sumatra, the land that has been utilised by large-scale palm oil
plantation corporations was the communal land of local people to which they have
customary right based on Minangkabau customary laws. The communal land is
called in local terminology as tanah ulayat or tanah kaum (for more information,
read Afrizal 2005 and 2007). Local governments recognised this land tenured as hak
ulayat or tanah ulayat of local people as this appeared in any land alienation
agreement letters singed also by the head of the district (bupati).16 In general, the
land was previously uncultivated and swamp located outside local farmland, but
small part of the area taken over for plantations area was local people’s farm land.17
It appears that two patterns of land acquisition procedures had occurred,
direct and indirect. The first consisted of land being directly alienated from local
kinship group leaders to investors, formalised in a signed agreement letters and
officially endorsed by the head of the sub-district (kecamatan) and the leader of .the
Nagari Adat Council (KAN).18 The second or indirect procedure took place by ways
of local governments through the Land Alienation Committee alienated customary
16
See for example the statement letters about kinship group leaders of Nagari Kinali providing their
communal land for PT. TR 5 July 1991; to PT. Arthasolid/PMJ, 22 May 1995; and to PT. INKUD, 4
December 1994 (see also Colchester et al., 2006, pp. 137-8).
17
For example, in the case of a company in a given nagari in West Pasaman District, about 87
hectares of land was former farmland of 130 households, part of 900 hectares of land claimed by a
kinship group leader to the company used to be rice fields and 516 hectares of land claimed by the
other kinship group leader was also farmland (Afrizal 2005, p. and 2007, p……).
18
See for example the statement letters about kinship group leaders of Nagari Kinali providing their
communal land for PT. TR 5 July 1991; to PT. Arthasolid/PMJ, 22 May 1995; and to PT. INKUD, 4
December 1994.
9
land of local communities from local kinship group leaders and then the local
government provided the land to investors.19 In this case, the kinship group leaders
provided their communal land to the head of the district, signing land alienation
letters or agreement letters. The second procedure was the major way of the
customary land alienation from local landholders to private investors in West
Sumatra (Afrizal 2005 and 2007 as well as Colchester et al. pp. 129-165).
Local kinship group leaders’ understanding of the land alienation is that their
customary land they provided to the local state and to palm oil plantation companies
through both of the above two
procedures was not a process of selling or
transferring ownership.20 Therefore they believed that they had not in fact sold this
land to the state or the companies or to surrender the ownership of the land 21. To
them, they allow companies to utilised their customary land but the ownership is still
with them (For more information, read Afrizal 2005 and 2006).
However, the Indonesian state has different ideas without local people’
knowledge. They attempted to take over ownership and therefore right of control of
customary land without providing adequate information to landholders, which were
kinship groups. How can this happen? On request by the local government land
alienation committee, kinship group leaders (niniak mamak) signed what were called
Surat Pernyataan Pelepasan Hak (Land Right Transfer Statements), declaring that
the kinship group leaders agree to transfer their right over a plot of their customary
land to the state in order that the state could issue Commercial Use Leases (HGU) to
palm oil plantation companies.22 Without kinship group leaders’ knowledge, the
singed Land Right Transfer Statements caused the kinship groups lost their
ownership to the plot of the land. This happened because the singed Land Right
19
The committee consisted of Pasaman District officials led by the bupati.
Analysing six land alienation agreement letters for about 30,540 hectares of land signed by
kinship group leaders of Nagari Kinali for PT. TSG, PT. AMP, PT. PMJ and PT. INKUG Agritama, it
was found that no references to purchasing and selling of land appeared in the letters (see the
statement letters about kinship group leaders of Nagari Kinali providing their communal land for PT.
TSG, 20 July 1990 and for PT. TR, 5 July 1991. Similar cases were also found in Nagri Tiku, Agam
District (see the statement letters about kinship group leaders of Nagari Tiku providing their
communal land for PT. AMP, 19 August 1983, 25 August 1991, 7 April 1993, 1 March 1994 and 19
September 1994).
21
Interviews with datuak BBS, 24 April and 7 May 2002; datuak LJN, 21 April 2002; and datuak
MM, 27 April 2002, Kinali.
22
See for example, the surat pelepasan hak dari ninik mamak kepada Bupati Pasaman, Taufik
Martha, for PT. TSG, It was not mentioned in the letter that local landholders loose their ownership to
the land.
20
10
Transfer Statements were used by palm oil companies to apply for Commercial Use
Leases (Hak Guna Usaha, Commercial Leases, HGU) from the Ministry of Agrarian
affairs/Head of National Land Administration, with these letters being one of the
considerations for issuing leases.23 Based on the letters, when issuing Commercial
Lease certificate, the land was claimed as state
land by the Ministry. 24 They
included the statement that it “…fulfilled requirements to gain HGU on the state
land that was former ulayat land…”. This is further reinforced by the Ministry of
Agrarian/Head of National Land Agency Regulation No. 5/1999 stipulating that only
to cases where HGU was granted on alienated customary land after 1999 that it is
excluded from the rules. This means that the alienated customary land on which a
plantation company obtained HGU before 1999 is considered by the government as
the state land.
This was one example of a more general policy of conversion of customary
land being pursued by the government without the awareness of local landholders
(For more information, read Afrizal 2005 and 2006). This was legitimised and
facilitated by the central government in 1996 with its Law No 40/1996. According to
this the Commercial Use Lease can be provided on non-land directly controlled by
the state through the technique of rights transfer (pelepasan hak)25.
LOCAL CUSTOMARY LANDHOLDERS CLAIMED THEIR RIGHTS
As a result of unfair processes of customary land relinquishment and the
unfulfilled promised schemed smallholder plantations, local customary land owners
carried out overt protests against palm oil plantation companies and the state. Local
people, in many cases kinship group leaders, protested to palm oil plantation
companies to demand that the companies provide them with smallholder
plantations.26 To mention few cases, from the beginning of 1993 to the end of 2002,
ABMA and his kinship group members continued to ask a company to develop 100
hectares in a smallholder plantation with them.27 In June 1998, datuak28 MM and his
23
Interview with an official of Pasaman District BPN, April 2002, Lubuk Sikaping.
See for example, Keputusan Mentri Negara Agraria/Kepala Badan Pertanahan Nasional No.
37/HGU/BPN/94 about the HGU for PT. TSG.
25
See PP. (Government Regulation) No. 40/1996 on Commercial Use.
26
Interviews with datuak MM, 27 April 2002; two of datuak MM’S lineage members, 27 April
2002; datuak BBS,7 May 2002; datuak LJN, 1 April 2002; and a public relations officer of PT. TSG,
20 April 2002, Kinali.
27
Interviews with ABMA, 25 April 2002; datuak BBS, 24 April and 7 May 2002, Kinali.
28
The way people address kinship group leaders.
24
11
kinship group members also protested demanding that the same company develop
900 hectares of smallholder plantation29 while in the whole of 1998 some 20 kinship
group leaders and members also asked the company’s management to develop 7000
smallholder plantation hectares.
In other cases local people protested against palm oil plantation companies
and demanded that they transfer to them the smallholder plantation (kebun plasma)
that had been developed by the companies and were already producing oil fruits.30
To mention few cases, in May 1997 and in December 1999, datuak BBS, acting as
the vice head of the Kinali KAN, and the leaders of the AWM cooperative sent the
Director of PT. AMP a letter stating that the company must transfer the smallholder
plantation which had been developed and begun to produce to local people.
Also, on 1 and 4 November 2002 the people of Nagari Kinali demonstrated
to the head of Pasaman District (Bupati) and to the Pasaman District People’s
Representative Assembly (DPRD) to express their concern that palm oil companies
operating in their nagari had not transferred the smallholder plantation that had
already begun producing oil fruits and to request that the Bupati and the DPRD press
palm oil plantation companies to keep their promise (Padang Ekspres 1 and 4
November 2003).
RESPONSES FROM OIL PALM PLANTATION COMPANIES
After much effort by local people in expressing their concerns, oil palm
companies began to listen to local people’s protests but co-operated with only some
of their demands. They paid communal land improvement compensation (siliah
jariah) as requested by local landholders, and they also provided landholders with
monetary compensation31 to compensate the land that they took by force. However,
oil palm plantation companies provided none of the smallholder plantations that they
had promised to proposed local recipients. 32 In fact, there were companies that had
29
See PT. TSG’s document about disputes with local people and interviews with datuak MM, 27
April 2002; datuak LJN, 21 April 2002; and datuak BBS, 7 April 2002, Kinali.
30
Interview with datuak BBS, 24 April 2002, Kinali.
31
See Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
32
As has been explained earlier, this is the part of the plantation that is provided to local people
under a Nucleus Estate and Smallholder Plantation Scheme. Interviews with datuak BBS, 24 April
and 25 May 2002, ABK, 25 April 2002, a public relations officer of PT. TSG, 20 April 2002, (Kinali)
and a public relation officer of PT. AMP 28 May 2002, (Lubuk Basung).
12
planted the promised smallholder plantation areas themselves but, even after the oil
palms began to produce, had not transferred them to local people. 33 It was found that
there was the head of the district expressed his support to local people that the oil
palms that began to produce should be transferred to local people. Nevertheless, by
the end of 2002 the developed smallholder plantation still had not been transferred to
local people groups of (Padang Ekspres, 2 November 2002 and 5 November 2002).
Two reasons were given by oil palm plantation company managements to
legitimise their lack of action. The first reason is that it is the responsibility of the
local state apparatus to organise the transfer of smallholder plantations. This reason
is plausible because, in fact, it is the duty of the local state apparatus to transfer
plantation partnership plantations to their recipients under a Nucleus Estate and
Smallholder Plantation Scheme (Soetrisno 1991, p. 115). The second reason given
was that smallholder cooperatives had not been formed. However, it was found there
was a case where the lists of proposed smallholder plantation recipients had been
given to the head of a District and cooperatives had in fact been formed. Despite
this, and despite the duty of state officials, nucleus estate companies have also a
responsibility in establishing smallholder plantation co-operatives (Basyar 1999, p.
67).34
There was a case where a management of a company had yet to develop any
smallholder plantations as previously agreed. Firstly, (as mentioned earlier) the
company had agreed to develop 124 hectares of smallholder plantation for 62 of
kinship group members and had accepted that it was the company’s responsibility to
finance all expenses pertaining to this responsibility using its own money, with the
company to be paid back by the recipients when the plantation produces. 35 However,
by March 2002, almost 4 years after the agreement was signed the promised
smallholder plantations had not yet been developed. 36 Secondly, the company had
also agreed to develop smallholder plantations over another 3000 hectares but only
33
Interview with datuak BBS, 24 April and 25 May 2002 (Kinali), a public relations officer of PT.
AMP, 28 May 2002 (Lubuk Basung). See also http://www.PadangEkspress.com, 1 November 2002
and 4 November 2002, both accessed on 16 March 2003.
34
Despite this, Rp 150,000.00 per month was paid by the company to proposed smallholder
plantation recipients as a compensation until the plantations were transferred to them (interview with
a public relations officer of PT. AMP, 28 May 2002, Lubuk Basung).
35
Agreement letter between A. datuak MM and the general manager of PT. TSG, 22 June 1998.
36
Interviews with a public relations officer of PT. TSG, 20 April 2002, datuak MM, 27 April 2002,
and former holder of datuak IML, 27 April 2002, Kinali.
13
about 200 had been planted.37 When asked for its reasons for not developing the
promised smallholder plantations, the company’s public relations officer said that it
could not obtain a loan to finance the development of the smallholder plantation
because the central government had stopped providing Kredit Koperasi Primer
Anggota (Primary Cooperative Member Credit, KKPA) for smallholder plantation
development from 1998.38 It is usual, however, for a plantation corporation to
develop the smallholder plantations after completing the development of its own
nucleus estate plantation and offices (Ahmad 1998, p. 45). It had taken the five years
until 1995 for PT. TSG to complete these 39 so for several years after that it had been
in a position to obtain KKPA funding. The secretary of Kabupaten Pasaman said
that PT. TSG’s given reason was a trick about the absence of government loans. As
he said, “It is true that the government stopped providing loans for plantation
partnership development in 1998, but PT. TSG should have developed the promised
plantation partnership before that year”.40
Another argument given the company was that providing the plantations for
local landholders was not mentioned at the time when kinship group leaders
provided land to the company, and no such thing was written in the land provision
letter.41 This is true. However, providing smallholder plantation for local landholders
was promised orally by the director of the company at the time of the company’s
ceremony marking the beginning of planting in 1989 (Singgalang, 29 November,
1989). Moreover, as mentioned earlier, the management of PT. TSG and A. datuak
MM produced a written agreement that the company agreed to develop smallholder
plantation for A. datuak MM and his lineage members. There was also an agreement
on 4 October 1999 between the management of PT. TSG and lineage leaders of
Nagari Kinali that the company would develop 3000 hectares of smallholder
plantation.42 On 11 April 2000 there was agreement between the management of the
37
Interviews with a public relations officer of PT. TSG, 20 April 2002, datuak BBS, 7 May 2002,
and datuak MM, 27 April 2002, Kinali.
38
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali. The secretary of
Pasaman District confirmed that the government had stopped providing loans for financing
smallholder plantation development since 1998 (interview with the secretary of Pasaman District, 6
May 2002, Lubuk Sikaping).
39
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
40
Interview with the secretary of Pasaman District, 6 May 2002, Lubuk Sikaping.
41
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
42
See Daftar Investor Perkebunan Kelapa Sawit di Kecamatan Kinali 2001. The fact that PT. TSG
promised to develop smallholder plantations on area 2 of the 3000 hectares can also be found in the
inventory of Oil Palm Plantation Problems produced by the government of Pasaman District in 2001.
14
company and kinship group leaders of a Hamlet that the company would develop
200 hectares of smallholder plantations.43 Ironically, the public relations officer of
the company said that “the management of the company was under pressure at the
time agreements were made”.44
It seems that there is little possibility that local people to gain smallholder
plantations from the company as the company was sold to another plantation
company in 2004 without informing local people.45
RESPONSES FROM THE STATE
Local people attempted to get help from the provincial and the local state
apparatus, including from the local People’s Representative Assembly (DPRD), in
their efforts to resolve their conflicts with oil palm companies. However, the
governments objected to pushing companies to develop smallholder plantations as
demanded by local people, to certain cases claiming that there had been no written
agreement about this matter produced between the kinship group leaders in question
and the companies at the time of the land alienation process. 46 In fact, the absence of
the written agreements was because of a mistake by local government officials as it
was them who had been responsible for organising the alienation of the local
people’s communal land for the company’s oil palm plantation47.
Moreover, it is true that no promise to provide smallholder plantations was
mentioned in the letter of land alienation from local kinship group leaders to the
company via the head of the District. However, in 1989, when the same head of
the district attended the company’s planting commencement ceremony, he had
43
See Daftar Investor Perkebunan Kelapa Sawit di Kecamatan Kinali 2001.
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
45
Personal communication with Andiko in September 2005 and with a student of Political Science
Department of Andalas University who is originated from the place in November 2005.
46
See the letter of the head of Pasaman District to the Nagari Kinali Community Rights
Advocacy Team, 9 September 1999. When the Secretary of Pasaman District was asked about this he
also said that the absence of written statements made in the letter of land alienation by the
management of companies to develop plantation partnership as set out was the reason why the local
government did not want to push companies to develop the plantation for the people of Nagari Kinali
(interview, 6 May 2002, Lubuk Sikaping). When interviewed by a journalist, the deputy of the head of
the district, Benny Utama, also said that local people’s demand for smallholder plantations would be
very hard to achieve because of the absence of written agreements (Kompas 8 May 2001).
47
See the statement letters about kinship group leaders of Nagari Kinali providing their communal
land to the head of Pasaman District for PT. TSG, 24 May 1989 and 20 July 1990 and see also the
previous discussion about the procedures of communal land alienation from local kinship group
leaders to oil palm plantation companies.
44
15
publicly stated that the company would provide them for local landholders, as did
the director of the company (Singgalang 29 November 1989).48
The formalistic standpoint of the local government district benefited the
company by legitimising the company’s policy that it did not need to provide local
people with smallholder plantation as there was no written agreement that had been
produced before the company had begun to cultivate the land in question.
The local state apparatus has a duty both in recruiting the recipients of
smallholder plantations (Soetrisno 1991, p. 102 and Basyar 1999, p 67) and also in
organising the transfer of the plantations to the recipients (see Soetrisno 1991, p. 115
and Ahmad 1998, pp. 143-143).49 But it was found that the local state apparatus had
not carried out its duties to organise the transfer of smallholder plantations to local
landholders (Padang Ekspres 2 November 2002 and 5 November 2002). There was
a case in a nagari that in the second half of 1999 the head of a District had
expressed his agreement to transfer to local recipients smallholder plantations that
were already producing, but the local government did not organise their transfer to
local people.
This confirms others’ findings that the process of transferring smallholder
plantation from the control of a nucleus estate corporation to the recipients of
smallholder plantation is problematic. Besides the negative actions of the nucleus
estate corporation it is clear that the state apparatus plays a role in the problem in
part as it is very slow in completing the paperwork needed 50 because of a lack of
coordination, causing delay in the transfer (see Soetrisno 1991, p. 115).
CONCLUSION
This article demonstrates that
the development of large-scale palm oil
plantations that was a strategy chosen by the Indonesian government to provide
them with an alternative source of income and to improve the welfare of local
communities, in West Sumatra this has undesirable social implications for local
people. They lost plots of their customary land without their informed consent and
48
It is true that the land alienation statement letter does not mention smallholder plantations.
However, this was the Pasaman District state officials’ mistake, because they were responsible for
organising land alienation.
49
Information was also gained by interviewing a public relations officer of PT. AMP, 28 May 2002,
Kinali.
50
For example, processing land certificates, the calculation of credit and time of instalments
(Ahmad 1998, p. 137).
16
they were involved in long-lasted conflict with palm oil companies and the state
apparatuses. These unwanted impacts were caused by two things; firstly by unfair
ways of land acquisition; secondly by ways in which palm oil plantations and local
governments treated local landholders with regard to the contribution of large-scale
palm oil plantation development for local people, in this case promised smallholder
plantations
as compensation for customary land provided and by promised local
economy improvement as the site effect of the development of large-scale palm oil
plantations.
Beyond that, this article shows lack of recognition and respect toward local
people with their customary rights based on their customary laws by business and
the state in the economic development. Therefore, the case of large-scale palm oil
plantation development demonstrates the problem of ongoing contestation between
recognition of customary rights of local communities and the interests of capital and
the state in Indonesia in general and in West Sumatra in particular.
References
Afrizal, 2007, The Nagari Community, Business and the State: The Origin and the
Process of Contemporary Agrarian Protests In West Sumatera, Forest People
Programmed and Sawit Watch, Bogor.
_____,2006, Sosiologi Konflik Agraria: Protes-Protes Agraria dalam Masyarakat
Indonesia Kontemporer, Universitas Andalas Press, Padang.
_____, 2005a, the Nagari Community, Business and the State: The Origin and the
Process of Contemporary Agrarian Protests In West Sumatera, Indonesia, Ph.D
Thesis at the Asia Centre of Faculty of Social Sciences Flinders University.
Ahmad, R., 1998, Perkebunan: Dari NES Ke PIR, Puspa Swara, Jakarta.
BAPPEDA Propinsi Sumatera Barat and BPS Propinsi Sumatera Barat, 1994,
Produk Domestik Regional Bruto (PRDB) Menurut Lapangan Usaha Propinsi
Sumatera Barat 1989-1993, BAPPEDA Propinsi Sumatera Barat dan BPS
Propinsi Sumatera Barat, Padang.
Basyar, H., A., 1999, Perkebunan Besar Kelapa Sawit: Blunder Ketiga Kebijakan
Sektor Kehutanan, E-Law and CePAS, No place of publication.
Biro Pusat Statistik, 1985, Statistik Indonesia, Biro Pusat Statistik, Jakarta.
Biro Pusat Statistik, 1999, Statistik Indonesia, Biro Pusat Statistik, Jakarta.
Bowie, A., and Unger, D., 1997, The Politic of Open Economy: Indonesia,
Malaysia, the Philipines, and Thailand, Cambridge University Press,
Cambridge.
Colchester, M., et al, 2006, Palm Oil and Land Acquisition in Indonesia:
Implications for Local Communities and Indigenous Peoples, Forest People
Program and Sawit Watch, Bogor.
17
Departemen Penerangan, 1953, Republik Indonesia: Propinsi Sumatera Tengah,
Kementerian Penerangan (Bandung).
Fauzi, N., 1999, Petani dan Penguasa: Diniamikia Perjalanan Politik Agraria
Indonesia, KPA, Bandung.
Kuntjoro-Jakti, D., 1981, ״The Political Economy of Development: the case of
Indonesia unde the new order government, 1966-1978״, PhD Thesis, University
of California.
Langill, L., R., 1978, Military Rule and Development Policy in Indonesia Under the
New Order: 1966-1974, Ph.D Thesis, Faculty of the School of International
Service of the American University.
Taylor, J., 1974, ‘The Economic Strategy of the “New Order”, in Repression and
Exploitation in Indonesia, ed., the British Indonesian Committee, Spokesman
Books, London.
Newspapers And Magazines
‘Tanah Ulayat di Sumbar, Untuk Kesejahteraan atau Perpecahan’, Singgalang 29
October 1989.
‘Tanah Ulayat di Pasaman Mulai Diselimuti Pohon Sawit’, Singgalang 29
November 1989.
‘Hentikan Intimidasi: Rakyat Kinali Tuntut Pengembalian Hak’, Singgalang 25 June
1998.
18
CUSTOMARY LAND ACQUISATION AND LOCAL PROTESTS:
An Experience of West Sumatra, Indonesia1
By: Dr. Afrizal2
INTRODUCTION
Having inherited poor economic condition from Soekarno's government, led
by Soeharto, the New Order regime attempted to achieve high economic growth by
implementing its five-year development plans begun in early 1970s. For this, the
New Order government stimulated investment in which two important policies were
implemented: Firstly, the state itself invested in resource-based industries in rural
areas (Bowie and Unger 1997, pp. 49-52); Secondly, the concentration on inviting
foreign capital was intense, and this made the Indonesian state at that time “really
became a foreign investor’s paradise” (Taylor 1974, p.18).
Then, the decline of revenue from oil brought about tremendous
development in agricultural sector. This is because the New Order government
endeavoured to find alternative sources of income, one of them was in the field of
agro-industry (Fauzi 1999, pp.162-186), in this case, the government viewed
agriculture as “a major catalyst for economic development” (Kuntjoro-Jakti 1981, p.
42). To increase the contribution of agriculture to the national economy, apart from
efforts to grow rice/food production, export-oriented agricultural products such as
rubber, palm oil, coffee and tea were developed (Langill 1978, p. 184). Palm oil
plantations are the most important one, which recently has grown dramatically both
in terms of the area of plantations and number of large-scale palm oil plantation
companies.
Based on an intensive study in West Sumatra3 and focus the attention to the
process of land acquisition, this article will shows that the development of large
scale plantations has serious implications for local people in the region. The process
of land alienation lacked recognition and respect of customary rights (hak ulayat)
1
2
3
Paper presented at “Seminar Antarbangsa Tanah: Keterhakisan Sosial dan Ekologi-Pengalaman
Malaysia dan Indonesia, Dewan Bahasa dan Pustaka, Kuala Lumpur 4-5 Desember 2007.
Graduated from the Asia Centre of the Flinders University and now is a senior lecturer at the
Department of Sociology Fac. of Social and Political Sciences, Andalas University.
The data used for this paper are my research findings in West Pasaman District, which is a centre
of large-scale palm oil plantations in West Sumatra.
1
by the governments and businesses took advantage of this and, therefore, they also
did not respect local people’s customary rights. This brought about local people lost
their customary land and conflicted with palm oil companies.
THE TREND OF PALM OIL PLANTATION GROWTH IN INDONESIA
Although palm oil plantations have existed in Indonesia since 1911, there
was a new phase of development after 1940 although by that year it was already one
of the important crops in the country. Great need for palm oil in Europe 4 brought
about remarkable increase in the size of palm oil plantation areas in Indonesia. It
was only 1.2 thousand hectares in 1916 and increased little to 109.6 thousand
hectares in 1940, and even up to in 1978 the area increased only to 250,000 ha. But
then, this increased dramatically to more than 2 million ha in 1998/1999. By 2004, it
was reported about 4.1 million ha of land and in 2006 about 6.1 million ha of land
were used for palm oil plantation but concentrated only in the Island of Sumatra and
Kalimantan. Some 50% of them were controlled by private large-scale plantations.
There were 170 palm oil estates recorded in 1985, which was number four after
rubber, tea and coffee in that year. By 1999 the number of palm oil estates had
jumped four-fold to 683 (Biro Pusat Statistik, 1985, p. 248 and 1999, pp. 208-9,
Soetrisno et al. 1991, pp.72-75, PDBI 1998 in Basyar 1999, p. 35 and Colchester et
al., 2006, pp. 21-22). This makes “Indonesia now leads the world…and set to
become the number one palm oil producer overtaking Malaysia by 2010, or even
earlier” (Colchester 2006, p. 25).
The incredible development of the palm oil plantations was related very
much to the governments’ actions because it was the governments in Indonesia that
had a major role in their development. The central and the local governments
encouraged and facilitated their development. They provided the needs of investors
to establish their large-scale palm oil plantations by issuing permits, allocating land
and guaranteeing investors to be able to control land in long term by issuing long
lasted Commercial Use Leases, HGU). It is important to look at why the
governments encouraged and facilitated their development.
4
For more information, read Colchester (2006).
2
There was a rather populist idea behind the development of palm oil
plantations. It was true that the development of palm oil plantations was seen by the
central government as a tool for improving macro-economic performance for it can
increase exports (Basyar, 1999, p. 49 and Bachriadi, 2001, p.229). But the
development of palm oil plantations was also seen by the governments as a tool to
improve local people’s economy. The provincial and district apparatuses also saw
the development of palm oil plantations as fundamental for the improvement of local
community economy (Afrizal 2005, pp. 112-113 and 2007, pp. 95-96 5). This can
be seen from the fact that the governments attempted to prevent the large-scale
plantation corporations’ monopoly on palm oil plantations, and wanted that local
people had share in the plantations. For this, from 1974-1975 the governments
introduced and applied a new mode of plantation production, the Nucleus Estate and
Smallholder (NES) mode of plantations to improve the well-being of small farmers,
(Soetrisno et al. 1991, p. 94-95), and even 1986 the Presient isued a decree to
support this model (Asian Agri 2007). Under this scheme, a plantation consists of
two parts: a nuclear estate that is the asset of big investors; and smallholder
plantations (kebun plasma), which is the asset of small farmers (Soetrisno et al.
1991; pp. 95-96, Basyar 1999, p. 66; Fauzi 1999, pp.187-188 and Bachriadi 2001,
p.239).
Both plantation investors and the state play significant roles in NES
development. The former is responsible for developing of plantation smallholders
(kebun plasma), improving the management quality of plantation smallholders and
buying their palm oil fruits. The latter is responsible for recruiting recipients of the
plantation smallholders, organising land for the plantation and providing loans for
the development of the smallholder plantations 6 (Soetrisno 1991, pp. 99-100). The
recipients of smallholder plantations obtain three plots of land from the state: two
hectares of plantation land; 0.75 hectares of land for farming and 0.25 hectares of
land for settlement (Soetrisno 1991, p. 99).
5
Colchester at all (2006) in many pages of their book informs that for local governments in many
places in Indonesia palm oil plantations were viewed vital for local economy improvement.
6
The recipients of smallholder plantation pay back the loan to the government by instalments of
30% of their sales. These instalments are collected through plantation companies that embrace the
smallholder plantations and buy their product (Soetrisno 1991, pp. 100-101).
3
THE CASE OF WEST SUMATERA
West Sumatra Became A Centre of Large-Scale Palm Oil Plantations
Palm oil plantations were introduced to West Sumatra by the Dutch before
independent with the first palm oil plantation, Ophier, was established in what now
West Pasaman in 1934. It used about 1100 hectares of land, began to produce in the
time of Japanese occupation but was destroyed during the second Dutch aggression
of 1948 (Departemen Penerangan 1953, pp. 730-739). Then, in early 1980s the
government of West Sumatra, supported by the West German Development Bank
(KFW), developed the area as a palm oil plantation again. At this time, the Nucleus
Estate and Smallholder (NES) mode of plantation production was introduced
(Soetrisno et al. 1991, p. 104).
Local governments played a significant role in the development of West
Sumatra became one of the centres of palm oil plantations. The local governments
invited or facilitated investors to invest in West Sumatra. For example, in the middle
of the 1980s the head of Pasaman District gave much attention to palm oil plantation
development in the area by inviting private investors and providing the nagari
community’s communal land for investors’ palm oil businesses (Singgalang 29
October 1989).7 The result of an interview with a local informal leader who was
involved much with the development of palm oil plantations in Pasaman shows how
it happened. Pak NJB, a 60 year old man who was a retired Haluan newspaper
journalist living in Simpang Empat, knew much about the history of large-scale
palm oil plantation development in West Pasaman. He remarked:
In the middle of the 1980s, after visiting the Ophier palm oil plantation that
was run by PT. Perkebunan Nusantara VI, private investors came to Pasaman
sub-district lineage leaders including Nagari Kinali to ask for land. The
lineage leaders told them to approach the Pasaman state apparatus for this
purpose. At that time, local lineage leaders were supportive to the investors.
After that, the head of Pasaman District (Rajuddin Nuh) invited all the
kinship group leaders of Pasaman sub-district including Nagari Kinali to
7
Information was also gained by interviewing a staff member of the Plantation and Agriculture
Office of Pasaman District who was a member of a team for land alienation in Kinali for private
investors, 9 April 2002, Lubuk Sikaping.
4
discuss agribusiness development in the region. The head of the district tried
to persuade the kinship group leaders to provide their communal land for
palm oil plantation development. He said that the development of the
plantations would benefit lineage members. The head of the district said that
they would be provided with plantation partnership by corporations as had
occurred at Ophier plantation. Accordingly, the kinship group leaders agreed
to provide their communal land for private investors.8
The other research’s findings confirmed this (see Colchester et al. 2006, pp. 132133).
The West Sumatran government's policies to encourage and facilitate
investors in palm oil plantation resulted in many large-scale (above 1000 ha) palm
oil plantation companies (several of them with their own mills) operated in West
Sumatra. Up to 2001, there were 41 companies operated in West Sumatra, controlled
about 336,600 ha to 489,000 ha of land9, and more and more of them are owned by
Malaysian investors recently10. Although the area of palm oil plantation in West
Sumatra is only one-third of the area of the same plantations in Riau Province, this is
number 4 in Indonesia after Riau, North Sumatra and Central Kalimantan
(Colchester 2006, p. 24).
Palm Oil Plantations for the Improvement of Local Community's Welfare
The ideas behind the development of large-scale palm oil plantations in West
Sumatra
by inviting big investors were to improve local people's economic
livelihood, besides, offcourse, to provide sources of revenue for the government. It
was clear that local state apparatuses and the Province of West Sumatra viewed the
development of palm oil plantations as crucial for the economic improvement of
local communities11 (BAPPEDA Tingkat I Sumatra Barat and BPS Sumatra Barat
1983, p. 49). The contents of conversation between local government officials and
local community members reveal this. For example, in 1989 the head of the
Pasaman District, Rajuddin Nuh, said that the development of large-scale palm oil
plantations in
the region
was designed
to apply the Nucleus Estate and
8
Interview with Pak NJB, 7 May 2002, Simpang Empat.
Because of scarcity of land, only few new companies invested in palm oil plantations in West
Sumatera.
10
Personal communication with a number of representatives of Malaysian palm oil plantation
companies during my attendance at RSPO meetings.
11
In opposition some analysts argue that the development of large-scale oil palm plantations caused
deforestation (see Basyar, 1999, p.104).
9
5
Smallholder scheme in order that local people obtain benefit from the development
of large-scale palm oil plantations. Quoting the head of the district, Singgalang news
paper reported that “…investors must involve the local community by providing
smallholder plantations, particularly to those whose land is utilised by the investors”
(Singgalang 29 November 1989). When the Bupati attended the ceremony to mark
the beginning of palm oil planting of a given grower he said again that the company
must organise smallholder plantations for landholders (Singgalang 29 November
1989). The other study also confirms this with the researchers concluded their
findings that “the Bupati of Pasaman said that the main goals of estates development
was to improve the welfare and standard of living of the local population (Colchester
et al., 2006, p. 133).
It can be concluded from the above discussion that in West Sumatra, palm oil
plantations should have been organised in such a way that local people must obtain
the advantage of the development of palm oil plantations. This is should be done by
applying Nuclear Estate and Smallholding model. Local government officials
labelled this model bapak angkat-anak angkat (step parents-step children model).
What is meant is that local people
be provided with smallholding palm oil
plantations as part of the development of large-scale palm oil plantations owned by
big investors. However, as will be discussed below the development of the largescale palm oil plantations ignored local people’s rights, based on their customary
laws, and this is contradictory to the aims of the development of large-scale palm oil
plantations in Indonesia in general and in West Sumatra in perticular.
Unfair Processes of Customary Land Acquisition
1. Land Taken Over By Plantation Companies Without Landholders' Free
Consent
It was found that there were pal oil companies that had taken over land by
force from local landholders. Sometime, police personnel get involved in supporting
the companies. The table 2 below shows an example of local people's land taken
over by force by plantation companies in a nagari in West Pasaman District.
6
Table 1. Local People’s Protests over Illegally Taken Land In Nagari Kinali
Protesters
Date
Company and complaint
Farmers association of Padang
Sungkai/Air Meruap
Oct. 3 1997
Backed up by two army personnel, PT.
TR took their fish ponds by force.
Eight kinship group leaders
Oct. 25 1996
M. Dt. Majobasa, M. Zaman and
Samsir
Oct. 24 1999
Bukini and six friends
June 19 1996
Farmers associations of Aur
Serumpun and Batang Lambau April 10 2000
hamlets
130 Javanese transmigrant farmhouseholds
July 17 1998
PT. AMP was accused of planting
beyond land provided and hiding
documents showing the real size of its
plantation.
PT.PN VI took their farming land
without their consent
PT. PMJ took their rice field without
their consent.
Land size
(ha)
70
Unknown
Unknown
Unknown
PT. PN VI took their farming land by
force.
197
PT. TSG took their land without their
agreement.
87
Sources: 1. Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
2. See the letter of the Dewan Pengurus Daerah to DAN DEM POM 1/6 Sumatera
Barat on 16 October 1997 (author given a copy of the letter from datuak BBS).
3. See the letter of the leaders of the farmer associations of Aur Serumpun and
Batang Lambau hamlets to the director of PT. PN VI on April 10, 2000.
4. Interviews with datuak BBS, 7 May 2002; ABMA, 25 April 2002; datuak MM,
27 April 2002; datuak LJN, 21 April 2002; and IMS, 7 May 2002, Nagari Kinali.
Unfulfilled Adat Requirement: Siliah Jariah
Local people protested to palm oil plantation companies demanding the
fulfilment of siliah jariah (communal land improvement compensation as the
compensation for improvements carried out by local landholders on their communal
land, such as creating irrigation schemes) be made. In most cases kinship group
leaders requested that palm oil plantation companies pay adat payments (customary
dues) and provide their kinship members with schemed smallholder plantations, this
was because they had not sold their communal land neither to the state nor to the
companies. The companies gave them the requested adat payments. However, local
people also demanded that the companies pay compensation for communal land
improvement because part of the land that the companies now utilised had been local
people's cultivated communal land.
7
Companies did not make communal land improvement compensation
because the need for this payment to be made was not identified at the time of the
process of customary land acquisition carried out by the local government land
alienation committee. As a result, the company management did not recognise the
necessity of this payment (Afrizal 2005, p. 123-125, 2007, 105-107).
Unfulfilled Promised Schemed Smallholder Plantations (Kebun Plasma) as
Compensation for Customary Land Provided12
Both the local government and plantation companies had promised
customary landholders that they would gain schemed smallholder plantations in
return for the their customary land they provided to the companies through local
governments or directly to them. This was stated explicitly in the letters of
communal land alienation (the land alienation transfer statements).13 For example,
the letter of communal land alienation of nine kinship group leaders of Nagari Kinali
stipulated that ‘based on providing land mentioned in the first point, the second
party (the Bupati of Kabupaten Pasaman) has an obligation to organise the
development of plantation in the form of step father and step child (smallholder
plantations)’.14 The letters mention that about 60 to 70% of total land provided for
investors by local landholders was for the nucleus estate of the corporations while 40
to 30% was for smallholder plantations.15 There was a different case of a palm oil
company. Although, schemed smallholder plantations are not mentioned in the letter
agreeing to transfer communal land to the company, both the Bupati of Kabupaten
Pasaman and the management of the company had promised orally to landholders
that they would be provided with the schemed smallholder plantation (Singgalang
29 November 1989).
12
A 2 hectares of palm oil plantation that is owned by an individual farmer but organized by an
estate.
13
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993, by two local kinship group leaders Kinali for PT. AMP,
29 November 1994, by two kinship group leaders for PT. AMP, 22 May 1995, and by eleven
kinship group leaders for KUD Harapan Kinali, 8 December 1994.
14
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993.
15
See the statement letters about nine kinship group leaders of Nagari Kinali providing their
communal land for PT. AMP, 9 April 1993, and by two kinship group leaders of Nagari Kinali for PT.
AMP, 29 November 1994.
8
However, as far as smallholder plantations are concerned, local communal
landholders were neglected. The promised schemed smallholder plantations were
not provided, while companies concentrated on their own estates. In certain cases,
smallholder plantations were not developed at all, while local people provided land
for this. In other cases, smallholder plantations were developed even produced, but
these plantations are kept by companies.
Customary Land Became the State Land Without Local Landholder' Knowledge
and Consent
In West Sumatra, the land that has been utilised by large-scale palm oil
plantation corporations was the communal land of local people to which they have
customary right based on Minangkabau customary laws. The communal land is
called in local terminology as tanah ulayat or tanah kaum (for more information,
read Afrizal 2005 and 2007). Local governments recognised this land tenured as hak
ulayat or tanah ulayat of local people as this appeared in any land alienation
agreement letters singed also by the head of the district (bupati).16 In general, the
land was previously uncultivated and swamp located outside local farmland, but
small part of the area taken over for plantations area was local people’s farm land.17
It appears that two patterns of land acquisition procedures had occurred,
direct and indirect. The first consisted of land being directly alienated from local
kinship group leaders to investors, formalised in a signed agreement letters and
officially endorsed by the head of the sub-district (kecamatan) and the leader of .the
Nagari Adat Council (KAN).18 The second or indirect procedure took place by ways
of local governments through the Land Alienation Committee alienated customary
16
See for example the statement letters about kinship group leaders of Nagari Kinali providing their
communal land for PT. TR 5 July 1991; to PT. Arthasolid/PMJ, 22 May 1995; and to PT. INKUD, 4
December 1994 (see also Colchester et al., 2006, pp. 137-8).
17
For example, in the case of a company in a given nagari in West Pasaman District, about 87
hectares of land was former farmland of 130 households, part of 900 hectares of land claimed by a
kinship group leader to the company used to be rice fields and 516 hectares of land claimed by the
other kinship group leader was also farmland (Afrizal 2005, p. and 2007, p……).
18
See for example the statement letters about kinship group leaders of Nagari Kinali providing their
communal land for PT. TR 5 July 1991; to PT. Arthasolid/PMJ, 22 May 1995; and to PT. INKUD, 4
December 1994.
9
land of local communities from local kinship group leaders and then the local
government provided the land to investors.19 In this case, the kinship group leaders
provided their communal land to the head of the district, signing land alienation
letters or agreement letters. The second procedure was the major way of the
customary land alienation from local landholders to private investors in West
Sumatra (Afrizal 2005 and 2007 as well as Colchester et al. pp. 129-165).
Local kinship group leaders’ understanding of the land alienation is that their
customary land they provided to the local state and to palm oil plantation companies
through both of the above two
procedures was not a process of selling or
transferring ownership.20 Therefore they believed that they had not in fact sold this
land to the state or the companies or to surrender the ownership of the land 21. To
them, they allow companies to utilised their customary land but the ownership is still
with them (For more information, read Afrizal 2005 and 2006).
However, the Indonesian state has different ideas without local people’
knowledge. They attempted to take over ownership and therefore right of control of
customary land without providing adequate information to landholders, which were
kinship groups. How can this happen? On request by the local government land
alienation committee, kinship group leaders (niniak mamak) signed what were called
Surat Pernyataan Pelepasan Hak (Land Right Transfer Statements), declaring that
the kinship group leaders agree to transfer their right over a plot of their customary
land to the state in order that the state could issue Commercial Use Leases (HGU) to
palm oil plantation companies.22 Without kinship group leaders’ knowledge, the
singed Land Right Transfer Statements caused the kinship groups lost their
ownership to the plot of the land. This happened because the singed Land Right
19
The committee consisted of Pasaman District officials led by the bupati.
Analysing six land alienation agreement letters for about 30,540 hectares of land signed by
kinship group leaders of Nagari Kinali for PT. TSG, PT. AMP, PT. PMJ and PT. INKUG Agritama, it
was found that no references to purchasing and selling of land appeared in the letters (see the
statement letters about kinship group leaders of Nagari Kinali providing their communal land for PT.
TSG, 20 July 1990 and for PT. TR, 5 July 1991. Similar cases were also found in Nagri Tiku, Agam
District (see the statement letters about kinship group leaders of Nagari Tiku providing their
communal land for PT. AMP, 19 August 1983, 25 August 1991, 7 April 1993, 1 March 1994 and 19
September 1994).
21
Interviews with datuak BBS, 24 April and 7 May 2002; datuak LJN, 21 April 2002; and datuak
MM, 27 April 2002, Kinali.
22
See for example, the surat pelepasan hak dari ninik mamak kepada Bupati Pasaman, Taufik
Martha, for PT. TSG, It was not mentioned in the letter that local landholders loose their ownership to
the land.
20
10
Transfer Statements were used by palm oil companies to apply for Commercial Use
Leases (Hak Guna Usaha, Commercial Leases, HGU) from the Ministry of Agrarian
affairs/Head of National Land Administration, with these letters being one of the
considerations for issuing leases.23 Based on the letters, when issuing Commercial
Lease certificate, the land was claimed as state
land by the Ministry. 24 They
included the statement that it “…fulfilled requirements to gain HGU on the state
land that was former ulayat land…”. This is further reinforced by the Ministry of
Agrarian/Head of National Land Agency Regulation No. 5/1999 stipulating that only
to cases where HGU was granted on alienated customary land after 1999 that it is
excluded from the rules. This means that the alienated customary land on which a
plantation company obtained HGU before 1999 is considered by the government as
the state land.
This was one example of a more general policy of conversion of customary
land being pursued by the government without the awareness of local landholders
(For more information, read Afrizal 2005 and 2006). This was legitimised and
facilitated by the central government in 1996 with its Law No 40/1996. According to
this the Commercial Use Lease can be provided on non-land directly controlled by
the state through the technique of rights transfer (pelepasan hak)25.
LOCAL CUSTOMARY LANDHOLDERS CLAIMED THEIR RIGHTS
As a result of unfair processes of customary land relinquishment and the
unfulfilled promised schemed smallholder plantations, local customary land owners
carried out overt protests against palm oil plantation companies and the state. Local
people, in many cases kinship group leaders, protested to palm oil plantation
companies to demand that the companies provide them with smallholder
plantations.26 To mention few cases, from the beginning of 1993 to the end of 2002,
ABMA and his kinship group members continued to ask a company to develop 100
hectares in a smallholder plantation with them.27 In June 1998, datuak28 MM and his
23
Interview with an official of Pasaman District BPN, April 2002, Lubuk Sikaping.
See for example, Keputusan Mentri Negara Agraria/Kepala Badan Pertanahan Nasional No.
37/HGU/BPN/94 about the HGU for PT. TSG.
25
See PP. (Government Regulation) No. 40/1996 on Commercial Use.
26
Interviews with datuak MM, 27 April 2002; two of datuak MM’S lineage members, 27 April
2002; datuak BBS,7 May 2002; datuak LJN, 1 April 2002; and a public relations officer of PT. TSG,
20 April 2002, Kinali.
27
Interviews with ABMA, 25 April 2002; datuak BBS, 24 April and 7 May 2002, Kinali.
28
The way people address kinship group leaders.
24
11
kinship group members also protested demanding that the same company develop
900 hectares of smallholder plantation29 while in the whole of 1998 some 20 kinship
group leaders and members also asked the company’s management to develop 7000
smallholder plantation hectares.
In other cases local people protested against palm oil plantation companies
and demanded that they transfer to them the smallholder plantation (kebun plasma)
that had been developed by the companies and were already producing oil fruits.30
To mention few cases, in May 1997 and in December 1999, datuak BBS, acting as
the vice head of the Kinali KAN, and the leaders of the AWM cooperative sent the
Director of PT. AMP a letter stating that the company must transfer the smallholder
plantation which had been developed and begun to produce to local people.
Also, on 1 and 4 November 2002 the people of Nagari Kinali demonstrated
to the head of Pasaman District (Bupati) and to the Pasaman District People’s
Representative Assembly (DPRD) to express their concern that palm oil companies
operating in their nagari had not transferred the smallholder plantation that had
already begun producing oil fruits and to request that the Bupati and the DPRD press
palm oil plantation companies to keep their promise (Padang Ekspres 1 and 4
November 2003).
RESPONSES FROM OIL PALM PLANTATION COMPANIES
After much effort by local people in expressing their concerns, oil palm
companies began to listen to local people’s protests but co-operated with only some
of their demands. They paid communal land improvement compensation (siliah
jariah) as requested by local landholders, and they also provided landholders with
monetary compensation31 to compensate the land that they took by force. However,
oil palm plantation companies provided none of the smallholder plantations that they
had promised to proposed local recipients. 32 In fact, there were companies that had
29
See PT. TSG’s document about disputes with local people and interviews with datuak MM, 27
April 2002; datuak LJN, 21 April 2002; and datuak BBS, 7 April 2002, Kinali.
30
Interview with datuak BBS, 24 April 2002, Kinali.
31
See Daftar Investor Perkebunan Sawit Di Kecamatan Kinali 2001.
32
As has been explained earlier, this is the part of the plantation that is provided to local people
under a Nucleus Estate and Smallholder Plantation Scheme. Interviews with datuak BBS, 24 April
and 25 May 2002, ABK, 25 April 2002, a public relations officer of PT. TSG, 20 April 2002, (Kinali)
and a public relation officer of PT. AMP 28 May 2002, (Lubuk Basung).
12
planted the promised smallholder plantation areas themselves but, even after the oil
palms began to produce, had not transferred them to local people. 33 It was found that
there was the head of the district expressed his support to local people that the oil
palms that began to produce should be transferred to local people. Nevertheless, by
the end of 2002 the developed smallholder plantation still had not been transferred to
local people groups of (Padang Ekspres, 2 November 2002 and 5 November 2002).
Two reasons were given by oil palm plantation company managements to
legitimise their lack of action. The first reason is that it is the responsibility of the
local state apparatus to organise the transfer of smallholder plantations. This reason
is plausible because, in fact, it is the duty of the local state apparatus to transfer
plantation partnership plantations to their recipients under a Nucleus Estate and
Smallholder Plantation Scheme (Soetrisno 1991, p. 115). The second reason given
was that smallholder cooperatives had not been formed. However, it was found there
was a case where the lists of proposed smallholder plantation recipients had been
given to the head of a District and cooperatives had in fact been formed. Despite
this, and despite the duty of state officials, nucleus estate companies have also a
responsibility in establishing smallholder plantation co-operatives (Basyar 1999, p.
67).34
There was a case where a management of a company had yet to develop any
smallholder plantations as previously agreed. Firstly, (as mentioned earlier) the
company had agreed to develop 124 hectares of smallholder plantation for 62 of
kinship group members and had accepted that it was the company’s responsibility to
finance all expenses pertaining to this responsibility using its own money, with the
company to be paid back by the recipients when the plantation produces. 35 However,
by March 2002, almost 4 years after the agreement was signed the promised
smallholder plantations had not yet been developed. 36 Secondly, the company had
also agreed to develop smallholder plantations over another 3000 hectares but only
33
Interview with datuak BBS, 24 April and 25 May 2002 (Kinali), a public relations officer of PT.
AMP, 28 May 2002 (Lubuk Basung). See also http://www.PadangEkspress.com, 1 November 2002
and 4 November 2002, both accessed on 16 March 2003.
34
Despite this, Rp 150,000.00 per month was paid by the company to proposed smallholder
plantation recipients as a compensation until the plantations were transferred to them (interview with
a public relations officer of PT. AMP, 28 May 2002, Lubuk Basung).
35
Agreement letter between A. datuak MM and the general manager of PT. TSG, 22 June 1998.
36
Interviews with a public relations officer of PT. TSG, 20 April 2002, datuak MM, 27 April 2002,
and former holder of datuak IML, 27 April 2002, Kinali.
13
about 200 had been planted.37 When asked for its reasons for not developing the
promised smallholder plantations, the company’s public relations officer said that it
could not obtain a loan to finance the development of the smallholder plantation
because the central government had stopped providing Kredit Koperasi Primer
Anggota (Primary Cooperative Member Credit, KKPA) for smallholder plantation
development from 1998.38 It is usual, however, for a plantation corporation to
develop the smallholder plantations after completing the development of its own
nucleus estate plantation and offices (Ahmad 1998, p. 45). It had taken the five years
until 1995 for PT. TSG to complete these 39 so for several years after that it had been
in a position to obtain KKPA funding. The secretary of Kabupaten Pasaman said
that PT. TSG’s given reason was a trick about the absence of government loans. As
he said, “It is true that the government stopped providing loans for plantation
partnership development in 1998, but PT. TSG should have developed the promised
plantation partnership before that year”.40
Another argument given the company was that providing the plantations for
local landholders was not mentioned at the time when kinship group leaders
provided land to the company, and no such thing was written in the land provision
letter.41 This is true. However, providing smallholder plantation for local landholders
was promised orally by the director of the company at the time of the company’s
ceremony marking the beginning of planting in 1989 (Singgalang, 29 November,
1989). Moreover, as mentioned earlier, the management of PT. TSG and A. datuak
MM produced a written agreement that the company agreed to develop smallholder
plantation for A. datuak MM and his lineage members. There was also an agreement
on 4 October 1999 between the management of PT. TSG and lineage leaders of
Nagari Kinali that the company would develop 3000 hectares of smallholder
plantation.42 On 11 April 2000 there was agreement between the management of the
37
Interviews with a public relations officer of PT. TSG, 20 April 2002, datuak BBS, 7 May 2002,
and datuak MM, 27 April 2002, Kinali.
38
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali. The secretary of
Pasaman District confirmed that the government had stopped providing loans for financing
smallholder plantation development since 1998 (interview with the secretary of Pasaman District, 6
May 2002, Lubuk Sikaping).
39
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
40
Interview with the secretary of Pasaman District, 6 May 2002, Lubuk Sikaping.
41
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
42
See Daftar Investor Perkebunan Kelapa Sawit di Kecamatan Kinali 2001. The fact that PT. TSG
promised to develop smallholder plantations on area 2 of the 3000 hectares can also be found in the
inventory of Oil Palm Plantation Problems produced by the government of Pasaman District in 2001.
14
company and kinship group leaders of a Hamlet that the company would develop
200 hectares of smallholder plantations.43 Ironically, the public relations officer of
the company said that “the management of the company was under pressure at the
time agreements were made”.44
It seems that there is little possibility that local people to gain smallholder
plantations from the company as the company was sold to another plantation
company in 2004 without informing local people.45
RESPONSES FROM THE STATE
Local people attempted to get help from the provincial and the local state
apparatus, including from the local People’s Representative Assembly (DPRD), in
their efforts to resolve their conflicts with oil palm companies. However, the
governments objected to pushing companies to develop smallholder plantations as
demanded by local people, to certain cases claiming that there had been no written
agreement about this matter produced between the kinship group leaders in question
and the companies at the time of the land alienation process. 46 In fact, the absence of
the written agreements was because of a mistake by local government officials as it
was them who had been responsible for organising the alienation of the local
people’s communal land for the company’s oil palm plantation47.
Moreover, it is true that no promise to provide smallholder plantations was
mentioned in the letter of land alienation from local kinship group leaders to the
company via the head of the District. However, in 1989, when the same head of
the district attended the company’s planting commencement ceremony, he had
43
See Daftar Investor Perkebunan Kelapa Sawit di Kecamatan Kinali 2001.
Interview with a public relations officer of PT. TSG, 20 April 2002, Kinali.
45
Personal communication with Andiko in September 2005 and with a student of Political Science
Department of Andalas University who is originated from the place in November 2005.
46
See the letter of the head of Pasaman District to the Nagari Kinali Community Rights
Advocacy Team, 9 September 1999. When the Secretary of Pasaman District was asked about this he
also said that the absence of written statements made in the letter of land alienation by the
management of companies to develop plantation partnership as set out was the reason why the local
government did not want to push companies to develop the plantation for the people of Nagari Kinali
(interview, 6 May 2002, Lubuk Sikaping). When interviewed by a journalist, the deputy of the head of
the district, Benny Utama, also said that local people’s demand for smallholder plantations would be
very hard to achieve because of the absence of written agreements (Kompas 8 May 2001).
47
See the statement letters about kinship group leaders of Nagari Kinali providing their communal
land to the head of Pasaman District for PT. TSG, 24 May 1989 and 20 July 1990 and see also the
previous discussion about the procedures of communal land alienation from local kinship group
leaders to oil palm plantation companies.
44
15
publicly stated that the company would provide them for local landholders, as did
the director of the company (Singgalang 29 November 1989).48
The formalistic standpoint of the local government district benefited the
company by legitimising the company’s policy that it did not need to provide local
people with smallholder plantation as there was no written agreement that had been
produced before the company had begun to cultivate the land in question.
The local state apparatus has a duty both in recruiting the recipients of
smallholder plantations (Soetrisno 1991, p. 102 and Basyar 1999, p 67) and also in
organising the transfer of the plantations to the recipients (see Soetrisno 1991, p. 115
and Ahmad 1998, pp. 143-143).49 But it was found that the local state apparatus had
not carried out its duties to organise the transfer of smallholder plantations to local
landholders (Padang Ekspres 2 November 2002 and 5 November 2002). There was
a case in a nagari that in the second half of 1999 the head of a District had
expressed his agreement to transfer to local recipients smallholder plantations that
were already producing, but the local government did not organise their transfer to
local people.
This confirms others’ findings that the process of transferring smallholder
plantation from the control of a nucleus estate corporation to the recipients of
smallholder plantation is problematic. Besides the negative actions of the nucleus
estate corporation it is clear that the state apparatus plays a role in the problem in
part as it is very slow in completing the paperwork needed 50 because of a lack of
coordination, causing delay in the transfer (see Soetrisno 1991, p. 115).
CONCLUSION
This article demonstrates that
the development of large-scale palm oil
plantations that was a strategy chosen by the Indonesian government to provide
them with an alternative source of income and to improve the welfare of local
communities, in West Sumatra this has undesirable social implications for local
people. They lost plots of their customary land without their informed consent and
48
It is true that the land alienation statement letter does not mention smallholder plantations.
However, this was the Pasaman District state officials’ mistake, because they were responsible for
organising land alienation.
49
Information was also gained by interviewing a public relations officer of PT. AMP, 28 May 2002,
Kinali.
50
For example, processing land certificates, the calculation of credit and time of instalments
(Ahmad 1998, p. 137).
16
they were involved in long-lasted conflict with palm oil companies and the state
apparatuses. These unwanted impacts were caused by two things; firstly by unfair
ways of land acquisition; secondly by ways in which palm oil plantations and local
governments treated local landholders with regard to the contribution of large-scale
palm oil plantation development for local people, in this case promised smallholder
plantations
as compensation for customary land provided and by promised local
economy improvement as the site effect of the development of large-scale palm oil
plantations.
Beyond that, this article shows lack of recognition and respect toward local
people with their customary rights based on their customary laws by business and
the state in the economic development. Therefore, the case of large-scale palm oil
plantation development demonstrates the problem of ongoing contestation between
recognition of customary rights of local communities and the interests of capital and
the state in Indonesia in general and in West Sumatra in particular.
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18