in Indonesia, Norway, West Papua

65 cents per hectare: The cost of land for oil palm plantations in West Papua

65 cents per hectare: The cost of land for oil palm plantations in West PapuaAn new report by the Environmental Investigation Agency and Telapak reveals that indigenous landowners in Sorong, West Papua province are being ripped off by an oil palm plantation company. The company, Kayu Lapis Indonesia Group (KLI) paid Moi landowners only US$0.65 per hectare.

The land is likely to be worth around US$5,000 per hectare once the forest is cleared and replaced by oil palm monocultures. EIA/Telapak also found that KLI paid landowners US$25 for a cubic metre of merbau, which KLI can then sell for US$875.

EIA/Telapak also found that Norway’s Government Pension Fund Global is among the international investors profiting from this exploitation. Abu Meridian, a Forest Campaigner with Telapak said, “That Norway – Indonesia’s biggest REDD+ donor – will also profit from this destructive exploitation is ironic in the extreme. Norway could be paying Papuans to maintain their forests instead of profiting from deforestation in West Papua.”

EIA/Telapak’s research also found that the companies involved illegally cleared forest before receiving the necessary approval from the Indonesian authorities. The report found that the timber was exported in part to the USA and Australia.

The report ends with the following recommendations:

West Papua’s Provincial Government should:

  • Work harder to secure the rights and interests of indigenous Moi landowners in land negotiations, and ensure written contracts that stipulate concrete development benefits for landowners are both drafted and made available.
  • Ensure PT IKS and PT HIP honour the legal requirement to develop at least 20% of their planted areas as smallholder or Plasma estates.
  • Employ the SVLK law to investigate the use of timber from clearance of the PT IKS area without a Forest Relinquishment Permit.

The Indonesian Government should:

  • Investigate the issuance of timber utilisation permits for forest cleared without a forest relinquishment permit.
  • Publish the details of KLI Group’s debt repayment obligations and actual repayment details to date, and ensure that debts repaid by KLI group are not financed by illegal logging and land clearance.
  • Work to ensure the Norwegian International Climate and Forests Initiative (NICFI) budget for Indonesia provides financial incentives for Papuan landowners in Sorong and elsewhere to conserve their forests.

The Norwegian Government pension Fund (GPFG) should:

  • Ensure investments in forests and land use are coherent with the Norwegian government’s efforts to reduce deforestation in Indonesia.
  • Investigate whether Noble Group’s plantations investments in Papua and West Papua comply with the Ethical Guidelines of the GPFG.

The Norwegian Government should:

  • Employ the Norwegian International Climate and Forests Initiative (NICFI) budget for Indonesia to provide financial incentives directly to Papuan landowners in Sorong and elsewhere to conserve their forests.
  • Establish an Inter-Departmental Working Group tasked with ensuring the GPFG’s investment practices are reformed to help Norway meet its Cancun Agreements commitments on REDD+.
  • Mandate this Working Group to commission a strategic study on the GPFG’s role in driving deforestation, and how this can be mitigated through reform.

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Clear Cut Exploitation
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  1. Is the point, how well or badly the land owner of Papua have negotiated, or is the point, that they have been compelled illegally to give up their rights for a token, to make the deal legal. The question is:
    What happens to the environment, and will the population have to pick up the tab for the devastation at the end of the day, and what are we (and the World Bank) doing, to prevent habitat destruction and social catastrophe?

  2. @Ilmarinen Vogel – Thanks for this. You’re right, the point isn’t just that indigenous people have been ripped off (shocking as that is). The environment will be trashed. Workers will be brought in mainly from elsewhere in Indonesia. The indigenous people will find their livelihoods gone as the forest goes.

    REDD was supposed to address this sort of thing, by offering an alternative to destructive “development” projects. Clearly, in this case, REDD isn’t working. REDD-Monitor has done several posts asking the question “Can REDD save …” a particular area of forest. The answer in each case, so far, is a resounding “No”.

  3. It is interesting that the original point of so called reality is the actual value of the natural capital. Making suggestions of monetary value is one way of establishing a negative ecopsychological input into the whole debate.

    The suggestion of “purchasing” rainforest or natural forest for £0.40p(GB)/h and then valuing that “resource” at an arbitrary figure of £3,157/h when covered with Palm Oil plantation is not quite the correct manner for a conversion value. Clearing the forest for “sunset deforestation” logging amounts to the largest initial contribution of income equivalent per hectare. Without this in the economic equation then conversion would be improbable if not impossible. In light of this then probably carbon biomass of over 350c/t/ has been converted or destroyed. Now we come to the “casino” economic effect, or as some say the “Lovejoy” (in the UK that is) effect. How much do we value this evolution of nature on the world market. How much is a casino auction prepared to value this carbon value, let alone that which my colleagues at the IPBES would suggest! £3.00/c/t; £5.00/c/t up to £500/c/t!!!! How much value do we assess this figure is what makes the whole sorry value of using it for Palm Oil of some form of destructive non sustainable activity. Then of course we have the biodiversity value and the inclusive ecological value, oh and then the ecosystem value and we have not even began to value the community of social value.

    We are using economics in this powerhouse of economics manner as if we are all still living in the Stone Age but with a macabra Adam Smith anachronistic level of economic reality. Madness and stupidity are just two words which describe this whole sorry scenario.

    We can produce microprocesses which can do work for us that our parents could not believe could happen prior to 1957, but we can use our living Earth as if we are living on a sterile planetary satellite. God will not help us…we do not deserve such help…..But what about our responsibility to our children and their Earth.

    Person-Planet my friends…See me on Facebook for more details if you dare

    Nigel Miles….Tamarman.