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

An 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.