Tussle for Papuas forests

Tussle for Papua's forests
The Straits Times (Singapore)
By John McBeth, Senior Writer

PAPUA Governor Barnabas Suebu appears to have put the brakes on a major palm oil plantation expansion that would have transformed the demographic balance in Indonesia's easternmost province and raised the spectre of widespread land disputes and a reinvigorated independence movement.

At the heart of the local government's development ambitions has been a major infrastructure programme - involving highways, seaports and airports - and the creation of four million hectares of plantations, mostly concentrated in the south-eastern districts of Merauke, Boven Digoel and Mappi.

'Development in Papua is being done to attract more economic activity,' National Planning Minister Paskah Suzetta told a July 11 seminar in Jayapura. 'The consequence of that is there will be many more people coming into Papua, not just from other provinces, but also from other countries. So the people of Papua must be prepared.'

Local critics have hit out at big-spending development projects and say the local government should be paying more attention to improving the province's woeful human resources situation and empowering native Papuans economically to prepare them for the onslaught.

Now, with the UN Climate Change Summit looming in Bali in December, Governor Suebu is shifting emphasis away from extensive palm oil cultivation and towards preserving the forests as a way of winning the province a future stake in a still-undefined global market for carbon credit avoidance.

In a recent interview with the Asian Wall Street Journal, Mr Suebu said he has been under pressure from Jakarta to create more plantations, partly to provide new jobs. But Trade Minister Mari Pangestu and other people who talked to him just two months ago say he was 'gung ho' over a plan that was actually formulated before he was elected governor in July last year.

Aides insist he has been taking a prudent approach all along and say he is holding off on approving large-scale oil palm ventures because he wants to ensure they are being planned in a sustainable way and are not simply an excuse - as conservationists have charged - for rampant logging in the country's last great stands of tropical rainforest.

For the past three decades, the central government has been accused of plundering Papua's vast store of resources and giving nothing back. Even now, with the province awash in cash as a result of its special autonomy status, Jakarta is still seen to be falling short in showing more respect for the Papuans and their culture.

Mr Suebu is well aware that vast new areas of plantation would widen the resentment among indigenous communities, with the influx of hundreds of thousands of outside workers from other job-starved parts of Indonesia dwarfing former president Suharto's controversial transmigration programme.

'The companies can have all the plans they want, but the governor is following very closely the prerequisites laid down for sustainable development,' one adviser told The Straits Times. 'When he talks plantations, he wants the people to be in a position to go and negotiate directly (with the companies).'

Mr Suebu takes the view that because the 2001 Special Autonomy Law stipulates that only foreign affairs, defence, justice, religion and fiscal affairs are the responsibility of the central government, Papua's forests belong to the Papuans.

In its latest report on Papua, the International Crisis Group (ICG) notes that tensions among tribal groups, and between indigenous Papuans and non-Papuan settlers, as well as competition over political power and access to spoils at the regency and sub-district levels all carry the potential for trouble in the years ahead.

The report focuses on Boven Digoel, one of two new regencies carved out of the Merauke region in 2002, where the key local concerns are land

rights and ethnic politics. The report points out that balancing traditional land rights with forestry and plantations is fast becoming a critical issue.

Korean-owned Korindo and its three Indonesian subsidiaries have been operating in Merauke since 1993, felling timber for plywood and now moving into biofuel projects.

Although there has been no major violence, conflicts between the company and Papuan customary landowners over access and compensation are widespread.

Korindo is considered only a marginal player in an area where influential Merauke regent John Gluba Gedze, a member of the majority, land-owning Marind tribe, is pushing hard for outside investment - partly to boost his campaign for a separate province of South Papua. For this reason, he and Mr Suebu are not said to be on amicable terms.

Other investors include Malaysia's multinational Genting group, which wants to pump US$3 billion (S$4.5 billion) into a 400,000ha palm oil plantation, Indonesian-owned Muting Mekar Hijau which is aiming for 540,000ha of palm oil and sugar, and the diversified Rajawali Corp and several other local companies.

But all their plans pale in comparison with what Indonesian agri-giant Sinar Mas has in mind. While an internal presentation obtained by The Straits Times lays out a plan to create one million ha of palm oil plantations covering four districts, a detailed breakdown indicates the company has designs on a much wider area than that.

The wish list, carefully plotted out on a map, includes Merauke (603,000ha), neighbouring Mappi (637,000ha) and Boven Digoel (914,000ha) to the west and north, and Sari (313,000ha), Keerom (186,000ha) and Jayapura (163,000ha) regencies on the northern side of the Central Highlands.

The project will require 300,000 workers, about 70 per cent of whom will have to come from outside the company, and facilities ranging from a seven-million-tonne-a-year crude palm oil refinery to a five-million-tonne biodiesel plant and bulk-handling terminals.

For the past eight months, teams have been criss-crossing the province surveying plantation sites and wooing the local bureaucracy. Because a single company cannot control more than 100,000ha of plantation, Sinar Mas has already formed 14 subsidiaries covering Merauke, Boven Digul and Mappi alone.

Sinar Mas executive Aan Slamat, head of the Papua project, declined to discuss Mr Suebu's apparent change of heart, saying he wanted to wait until a scheduled meeting with the two-time governor early next month. 'I haven't spoken to him for some time,' he said. 'The concept (for the province) should be balanced development, taking in economic, environmental, cultural and other factors.'

Significantly, Sinar Mas' strategic partner in the US$5.5 billion, eight-year venture is the China National Offshore Oil Corporation (CNOOC), a major shareholder in BP's Tangguh gasfield in western Papua which is scheduled to go into full production next year.

In July, CNOOC announced it had taken a controlling 51 per cent stake in the phased development of biodiesel from crude palm oil and bioethanol from sugar cane or cassava in Papua and Kalimantan. Sinar Mas holds a 39 per cent interest and Hong Kong Energy (Holdings) the remaining 10 per cent.

Mr Suebu's connections with some of Indonesia's companies go back many years. Sinar Mas, for example, currently has a 12,000ha oil palm plantation on the northern coast, which was first planted in 1992 - a period during which Mr Suebu was last the governor of Papua.

Forestry researchers still believe Sinar Mas' main interest lies in the expanses of eucalyptus and acacia trees that grow naturally in the Merauke area and can be used as ideal feedstock for its Sumatran or Chinese pulp and paper mills - or perhaps for a new mill in Papua.

The four million ha earmarked for plantations is mostly concentrated along the southern coast and is actually part of 10 million ha across Indonesia that was officially classified as conversion forest by the central government in the early 1980s to cater for future population growth and development demands.

Unlike in Sumatra and Kalimantan, however, about 90 per cent of the designated conversion forest in Papua is, in fact, primary forest that has never been logged. The rest is either production forest (yielding 20 cubic metres of timber or more a hectare) or savannah grasslands.

What has not been explained is how the companies will go about acquiring the necessary land for a programme that would change the lifestyles of tens of thousands of people, many of them forest dwellers who practise subsistence farming.

Sinar Mas says in its presentation that it will offer 'reasonable' compensation for traditional holdings, but local officials make it clear it will be done on a rental basis and that actual ownership will remain in the hands of the people.

Sinar Mas has already formed three teams to deal with land and licensing, technical and socialisation issues, and human resources, finance and business. Discussing the importance of dealing with community leaders, it notes: 'The social, cultural and religious approach is most important for every step of the process.'

Foresters would like to see Mr Suebu reconsider where the plantations should be, pointing to large areas of degraded forest and scrubland that could be utilised without having to clear primary forest. It acknowledges, however, that a lot of the land is non-contiguous and would represent a logistical and planning challenge.

In the meantime, environmentalists hope Papua holds the line. Even if avoided deforestation becomes part of the Kyoto Protocol, policy experts warn that it will take years to work out a functioning system for the release of funds, monitoring and enforcement.

And even if all that is done, there is still no guarantee that Papua on its own will get the direct benefits. It could be decided, for example, that carbon credit payments will be made on a government-to-government basis, with the funds going to Jakarta first and then distributed to the regions. Given the bitter experiences of the past, that is not something Papua will want to hear.