For the last two decades palm oil has been one of the fastest growing commodities in Indonesia. According to the Director General of Plantations, palm oil plantation area has increased from 1.1 million ha in 1990 to 6.1 million ha in 2006. The Ministry of Agriculture (MoA) states that up to 2007 palm oil plantation area has now reached 6.3 million ha. On average there are 260 thousand ha of new palm oil plantation every year. Plantation area is defined as area that has been planted for plantation commodities, productive and non-productive. The land bank is area allocated for plantation concessions (a license has officially been issued). In 2005, the land bank for palm oil plantation reached 8.5 million hectares in Indonesia. Concerning plantation land policy, this terrible/rapid development is thought to be the result of inconsistent implementation by government authorities. Nineteen groups of large palm oil companies have plantations of over 100 thousand ha; this despite the 1998 Department of Forestry and Plantations decree stating maximum area for one company or group to be 20,000 ha in one province, 100,000 ha for all of Indonesia. Currently, the government is discussing palm oil plantation for group companies, even though there are rumors that many parties are opposed to it.
Palm Oil Plantation Development in Central Kalimantan
Central Kalimantan is currently the province with the fastest growth and expansion of palm oil in Indonesia. In 17 years, palm oil plantation area has increased nearly 400 fold. Up to the end of 2006, there were approximately 816,000 ha of forest area in Central Kalimantan released for palm oil development. Nevertheless, 60% of the area has been carried out with a HGU. The Ministry of Forestry (MoF) decree No.146/Kpts-II/2003, the circumstance under which a HGU is legal is within one year of the Area Release Decree issue. This means there are 326,000 ha that should be returned to the state.
Deforestation and Uncertain Land Use Policies
To mitigate rapid deforestation, the federal government issued the Ministry of Forestry and Plantation Revolved Letter No.603/Menhutbun-VIII/2000 joint MoF Letter No. 1712/Menhut-VII/2001 ordering all provincial and district authorities to halt natural forest conversions for the time being. Regional authorities decided not to endorse the forest area release for plantation development. This policy was then changed after the MoF Regulation No.P.31/Menhut-II/2005 stating that forest area releases would only be issued for an applicant who passed the proposal agreement and complied with evaluation conditions. This was confirmed by the MoF and provincial governors of Kalimantan in March 2007 so that the Department of Forestry issued a new policy to stop issuing plantation conversion licenses for production forests all across Indonesia, with the exception of Papua province. Meanwhile, up to now, forest and sea area assignment in Central Kalimantan has not been completed. Based on combined central (TGHK) and provincial (RTRWP) land cover data for Central Kalimantan province, forest area was approximately 10.7 million ha, excluding production forest area that would be legal for conversion if no longer classified as forest area due to degradation. If forest management policy in Central Kalimantan is based on this combined central and provincial data it would appear there are no remaining forests to be allocated for conversion. In reality there are many plantation development practices which result in land clearance. After a straightforward process of acquiring the conversion license, the investor first benefits financially from sale of land-clearing timber. This is described as an additional profit, one that comes before future palm oil plantation revenues. However, concession holders, wise to timber prices, now see the initial timber harvest as the main motive behind plantation applications. This has proven a serious problem. Another problem comes from government forest allocation policies; forest licenses issued by the central government are partly directed to be non-forest cultivation by the local government. One example from Central Kalimantan involves palm oil concession area overlapping with adjacent Tanjung Putting National Park. The companies involved are PT. Kharisma Unggul Centratama Cemerlang/KUCC, PT. Borneo Eka Sawit Tangguh/BEST, PT. Graha Indosawit Andal Tunggal/GIAT, and PT. Wana Sawit Subur Lestari/WSSL (Table 4). The conflict between forest use and legality on the same area is an indication of the competition between central and local governments to control land use. Recent evidence of this trend was shown in a report that local officials, intent on promoting palm oil development in their districts, produce false reports of forest conditions to secure concession licenses from the Department of Forestry. (Table 2 displays the overlap and conflict between forest licensing authorities.)
Palm Oil and Forest Conditions
Besides forest allocation conflicts, and indeed more significant, is how palm oil plantations affect Indonesian forest cover area. Approximately 70% of plantations in Central Kalimantan are palm oil and more than one third of those are still covered by forests. All forested land in plantation areas will be converted at some point, which means that about 763,000 ha of forest in Central Kalimantan is directly threatened by deforestation.
Palm Oil and Peat Land
More than 3 million ha of Central Kalimantan is peat land and nearly 14% of it has already become palm oil plantation area. The largest expanses of peat land are located in Katingan, Kahayan Hilir, Kapuas, Kotawaringin Timur and Seruyan districts. According to the Central Kalimantan Plantation Office, up to 2007 there were 20 large plantations which obtained licenses to operate on 304,000 ha of Peat Land Development Area (PLG) and 17 of these, 292,000 ha, were palm oil plantation companies. According to the Presidential Instruction No.2/2007 on the Acceleration of Rehabilitation and Revitalization of Peat Land Development in Central Kalimantan, approximately 1.1 million ha of peat land development area was to be returned or converted to it’s natural state. The remaining 300,000 ha will be used for agricultural development, mainly paddy fields. This decree also states that land allocation for palm oil plantation development and extension is limited to 10,000 ha. This Presidential Instruction triggered reaction from some Level 2 Region Chiefs in Central Kalimantan because it would cause certain plantation licenses to be withdrawn, which, in turn, would cause local government to repay the affected companies. Up to now, many companies have not yet withdrawn their license and continue to operate.
Palm Oil Plantations and Fire
According to 2006 NOAA satellite observation a number of focus ‘hotspots’ (areas with extensive or prolonged fires) were identified in Central Kalimantan. Table 5 displays these focus hotspots locations, within forest and palm oil plantation areas. These results strongly indicate that land clearing is done by burning because more than 45% of focus areas occurred on palm oil plantations. Fire, inexpensive and fast, is one the most common methods of plantation land preparation. In forest areas, over 22% of focus hotspots were located on peat land. Carbon emissions produced from peat land fires contributes to climate change. Fires burned out of control over 3 million ha of Central Kalimantan peat land and released 6.4 million tons of carbon dioxide. Many described these fires as a global disaster.
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