Peoples Plantations': help or hindrance in tackling deforestation?

Down to Earth No. 74, August 2007

Indonesia's forestry department is allocating millions of hectares of land to a new scheme aimed at increasing the supply for wood for the pulp and timber industries, as well as tackling poverty. But serious flaws with the 'peoples plantations' programme are raising concerns that the scheme could do more harm than good.

Indonesia's forestry department announced target figures for 'Peoples Plantations' (Hutan Tanaman Rakyat - HTR) in February this year. A total area of 5.4 million hectares in eight provinces in Sumatra and Kalimantan, consisting of 'non-productive production forest' has been identified for the scheme. Production forests are one of Indonesia's three main forest classifications alongside protection/conservation and conversion forests. These have been severely depleted by destructive logging since the 1970s to the extent that Indonesia has been identified as the country with the highest rate of deforestation (see DTE 73) At least 32 million hectares of 'state forest' have no forest cover, including nearly 15 million ha zoned as production forest. It is not clear how the target area for HTR has been selected from this total.

The HTR programme will involve 360,000 families, each allocated 15 hectares to manage for a maximum of 100 years. Individuals can form co-operatives which are allowed to apply for a larger area. The target is to complete land allocation by 2010, at an average rate of 1.4 million hectares per year.

Three models of HTR have been devised: 'independent', 'partnership' and 'developer' models, which involve varying levels of private sector or state participation. In the 'partnership' model, the partners are to be 'facilitated by the government'. In the 'developer mode, the plantation is set up by a private or state-owned enterprise that later hands over the HTR to an individual which has requested a permit.

HTR licence-holders, which may be individuals or local people's cooperatives, qualify for a loan worth Rp 8 million (around USD900) from the state Reforestation Fund, for land allocated by the forestry minister, assistance with applications, low interest rates, assistance with institutional strengthening from the local district head (Bupati) and for price protection when the timber is ready to harvest.

The total budget is Rp 43.2 trillion (USD4.8 billion), and the programme is scheduled to start this year.

A government regulation, passed in January 2007 (PP 6/2007) sets out further details of the scheme:

• Every five years the licences will be evaluated by the forestry minister;
• The licence for HTR (called IUPHHK) can only be issued once and cannot be extended, resold or bequeathed;
• IUPHHKs for HTR are issued by the forestry minister, but can be delegated to provincial governor;
• HTR licence holders are obliged to supply the wood industry and to plant at least 50% of their plantation area;
• They must prepare a long-term workplan within a year of receiving the licence, to be agreed with the district head or other indicated official;
• They must prepare annual workplans;
• They must submit periodic performance reports to the forestry minister.

The HTR programme is part of a wider effort aimed at developing plantations on 9 million hectares of land identified as non-productive by the government, thereby increasing the supply of raw materials and revitalising Indonesia's forestry industry. The goal is to re-establish forestry as a major player in the national economy as well as reduce poverty by providing jobs, land and credit. Forestry sector revitalisation is, in turn, part of the government's 'RPPK' (Revitalisation of Farming, Fisheries and Forestry) agenda announced in early 2006. It is also intended to create clearer tenure arrangements and therefore reduce land conflict (although within the existing paradigm of state land ownership).

Concerns

Destructive logging in Indonesia is a grave threat to the sustainability of local communities, biodiversity, and local and national economies. It also has global knock-on effects, as deforestation is a major contributor to global warming (see separate article, page 1). However, there are questions over whether HTR can be part of the solution and whether the dual goals of increasing wood supply and poverty reduction are compatible or contradictory. These questions include:

Whose land? The land targeted for HTR is allocated by the Department of Forestry on 'land not subject to rights' (lahan tidak dibebani hak) in locations close to timber processing units). According to forestry department data, such land covers 12.3 million hectares. The question immediately arises: which rights are included here? Past forestry policies and land classification regimes are well-known for their failure to include the customary rights over land and resources held by indigenous peoples (wilayah adat). Legal recognition of adat land remains very difficult under current national laws and, in forest areas, is almost without exception limited to access rights, rather than full ownership rights. Since HTR is targeted for forest areas controlled by the state, it must be assumed that adat rights will hardly enter into the picture. Moreover, since land allocation will be under the central control of the forestry minister, the potential for accommodating adat access or ownership rights which are recognised under local laws, is restricted. Yet it is likely that customary rights cover many of the very areas targeted by HTR. An indication of this is given in a new report published by the World Agroforestry Centre, which looked at one area in North Sumatra. The authors show that over half of areas indicated by the forestry department for HTR were classified by the national land agency (BPN) as 'adat land' (see box for more details of this report).

Who participates? Given the extremely weak legal status of indigenous land rights, the door appears to be open to the takeover of adat areas in the name of HTR. Participants of the various models include private and state-owned companies, and/or individuals and cooperatives. There appear to be no guarantees that local indigenous communities will be the ones to secure the HTR permits, if they choose to use the opportunity to gain a level of recognition over their adat areas. Or, if they choose not to, that there is any means of keeping adat land out of the scheme. The possibility of adat land being handed over for 100-year periods to individuals or cooperatives in partnership with companies, puts the HTR scheme on a similar level to other plantation development schemes, where indigenous communities have ended up marginalised, with loss of control over their customary land and resources.

What to plant? Regulation 6/2007 puts HTR participants under the obligation to supply the wood industry, but gives them the choice of planting monocultures or mixed species. While allowing for some freedom of decision-making - an improvement on some past schemes where participants were instructed to grow a single tree species - this still limits choice. The current plans will not allow traditional multi-species agroforestry plots with mixed crops of fruit, coffee and timber species. (A forestry department document on HTR points to 28 recommended species for Kalimantan and Sumatra, but, in one area at least, this has omitted some favourite local tree species - see box). How free will the farmers be not to follow the recommendations? Should increasing supply to the wood industry (rather than tackling overcapacity by closing mills and not building new ones) take precedence over farmer choice according to local markets for fruit, resins, construction wood and other products which may not be related to the wood industries?

What price? Regulation 6/2007 says that the forestry minister will fix the price of harvested timber. What are the guarantees that this will be fair and that participants will be able to repay credit, or that their profits are not eroded by corruption?

What is the priority? All the signs are that the main purpose of HTR is to increase timber production for the wood processing industry: rural livelihoods and forest conservation are very much secondary goals. Several questions arise here:

• How will control and profit-sharing be determined in community-company partnerships - for example between pulp producer Sinar Mas and its outgrowers?
• Where are the plans for capacity-building for individual or HTR permit holders? Unless they can deal with negotiating with local government, drawing up business plans, and getting technical assistance on growing and marketing, this scheme will simply turn participating 'small-holder' communities into cheap labour for companies as has happened in the oil palm plantation sector.
• How will families (and their businesses) survive for the eight years or more that the trees will take to grow? Will they have to borrow money in addition to the loans from the Reforestation Fund for planting tree seedlings?
• What happens if the HTR holder dies? If the rights last for 100 years and are not transferable, the family could be left with debts while the licence reverts to the state.
• How are environmental and socio-economic development issues to be dealt with when district authorities do not have the capacity or experience to balance these needs? (Under PP6/07 the district head is expected to do this by ratifying the annual work plans for all the HTR plans within a district.)
• How will conflicts or opportunities for corruption be avoided where two groups apply for the same HTR plot?
• There is no indication of how HTR will fit in with climate control measures, including tree planting for carbon trading credits (see DTE 74).

Further concerns have been raised about the forestry department's legal right to allocate land (since so little land claimed by the department has actually been legalised as such); the potential for violating the principle of free, prior and informed consent of indigenous peoples whose areas are targeted, and the credit arrangements for participants. Experience from the past shows that top-down, centrally-planned and controlled, large-scale programmes often end in social and environmental disaster. The transmigration programme (which included a tree-crop element), the nucleus-estate / smallholder (PIR) plantation model and the attempt to convert a million hectares of Central Kalimantan peatland into ricefields are clear examples of such schemes. It remains to be seen how far the lessons from these hugely damaging and costly mega-projects have been learned.

(Sources: Forestry Department Press Release S 51/II/PIK-1/2007, 21/Feb/07 and S 525/II/PIK-1/2006, 3/Oct/06; Dirjen Bina Produksi Kehutanan Pembangunan Hutan Tanaman Rakyat (HTR) [no date]; Risalah Pertemuan Working Group Tenure (WG-T) dan Working Group Persiapan Percepatan Pembangunan Hutanan Tanaman Rakyat (WG-PPPHTR) 21 July 2006; Strategic Options for Forest Assistance in Indonesia, IBRD/the World Bank, Dec 2006. For further background on transmigration, PIR and the Central Kalimantan mega-project see for example DTE's 2001 report on transmigration at dte.gn.apc.org/ctrans.htm)