A sustainable palm oil development model for Papua
This article has been translated by PwC Indonesia as part of our Plantation News Highlights service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
The Jakarta Post
6 April 2023
By: Edi Suhardi
Jakarta - As oil palm plantations can be a significant contributor to rural livelihoods in Indonesia, the government has been capitalizing on this commodity and strengthening Indonesia's position as the global leader in palm oil production by expanding plantations. As land for new plantation investment has become scarce in Kalimantan and Sumatra, plantation developers are looking east to acquire land in Papua.
The growing interest in developing oil palm plantations in Papua presents potential opportunities, but also challenges.
Plantation development in Papua has opened up isolated areas, stimulated infrastructure development, generated employment and improved workers' incomes.
However, the indigenous communities' reliance on forests for subsistence and their lack of familiarity with oil palm as a cash crop have proven to be a major barrier to their employment and effective engagement in this industry.
Moreover, hesitation among companies to implement the nucleus estate and smallholder (NES) scheme has further limited the involvement of local communities, widening inequality and often causing tension over land acquisition processes and resentment over low compensation. The large number of migrant workers brought in to work at plantation estates is also a source of conflict with the local population.
Plantation expansion in Papua, which has been accelerated further and has often been excessive under regional autonomy since Papua is now administratively divided into six provincial administrations, has caused deforestation and other negative environmental impacts, such as poor water quality, air pollution and soil erosion.
Lack of scrutiny by public and mainstream media on Papua development, and the region's distance from Jakarta's oversight, could make things go out of control.
Before the damage becomes uncontrollable, the central government should intervene to introduce a holistic sustainable development plan on a par with other regions in Indonesia.
Papua, the least developed region on the country, needs a well-tested socioeconomic development program through which palm oil can bring benefits to the large Papuan population and maintain lasting peace in the region.
According to 2021 data from the World Resource Institute (WRI), Papua's total landmass is 41.3 million hectares, which includes 36 million ha of forest area, or 87 percent of the region's landmass. Papua's dominant forest area means it is considered as a special region of high forest cover landscape (HFCL), a term coined by the High Carbon Stock Approach (HCSA) for regions with more than 80 percent forest cover.
According to the Agriculture Ministry, there are 29 active palm oil concessions in Papua totaling 225,000 ha, or 0.5 percent of Papua's landmass, an insignificant portion of the national plantation acreage of around 16 million ha.
Licensed concession areas total around 1 million ha and would have been larger if no drastic measures were taken in 2021, when the West Papua administration revoked 16 concession permits totaling 340,000 ha.
But since virtually all oil palm plantations in the region are managed by companies, average palm oil production is 20 percent higher than in other parts of Indonesia. This means Papua has one of the highest productivity rates and the best sites for palm oil development in the world.
Papuans need to be given equal opportunity to develop and thrive economically. Its development opportunity can be fully tapped if the local palm oil industry is developed in a sustainable manner, taking into account the region's unique sociocultural characteristics.
Franki Samperante of Yayasan Pusaka, a prominent nongovernmental organization in Papua, noted that oil palm development in Papua must be conducted in a way that highly respects customary laws and protects the interest of indigenous Papuans, workers and environmental sustainability. Palm oil development must also mitigate negative social and environmental impacts.
He highlighted the need for policy changes to include community-based development programs that prioritized the decisions and livelihood of the Papuan people.
Unlike Sumatra and Kalimantan, which have seen excessive development of oil palm estates, Papua's rich lands still offer wide opportunities for new plantations, as long as they are undertaken in a sustainable manner that take lessons from past mistakes.
The government should therefore see to it that the upcoming enforcement of the European Union's deforestation legislation should not be as rigid and tough as in Sumatra and Kalimantan; otherwise, Papua would be left behind even further in development.
The government instead needs to closely oversee the development of a sustainable development platform in Papua as an HFCL to balance the need for conserving the region's forests without compromising the sustainability goals.
The concept of palm oil development in HFCL is not new. The HCSA has been attempting to develop a framework, but it has been neither tested nor adopted.
In view of the emerging urgency for a new Papua development strategy to accelerate the region's development toward prosperity and rebuilding peace, the government must be proactive in formulating a regional framework on sustainable palm oil development for Papua as the most viable development option, and which includes three strategies.
First, conduct a region- and landscape-wide reassessment of land use in Papua, to be divided into the two main categories of carbon stock and forest conservation and sustainable development areas with specific provisions, where some level of controlled development can be permitted while maintaining high carbon stock (HCS) and high conservation value (HCV).
Second, design and adopt a sustainable palm oil development plan for Papua as an HFCL. The framework should lay out the conditions for sustainable oil palm cultivation that incorporates the goals of environmental conservation, regional development and social equity.
Third, reevaluate and restrict oil palm cultivation so it is in full compliance with sustainability standards. New oil palm developments at the existing concession areas covering 1 million ha must be monitored strictly, with priority given to oil palm smallholders.
Finally, we need to educate and convince the market that balanced and sustainable palm oil development in Papua for the region's prosperity must be allowed, and that controlled land cover change should be exempted from the deforestation label.
