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Revised Final Draft “How to” Guide - IFC

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World Resources Institute BACP Grant 008 Deliverable 11
Revised Final Draft “How to” Guide
This deliverable is the revised draft of the legal “how to” guide on how to implement land swaps
following best practice legal and social procedures. The draft is ready to be submitted to WRI’s external
review process as detailed in the Publication Influence Plan (Deliverable 7). Research for this paper was
conducted by the World Resources Institute (WRI)1 under BACP Grant WRI-008 “Preserving Biodiversity
through Responsible Development of New Oil Palm Plantations.”
Included in this deliverable is the current draft document, which has been revised based on WRI’s
internal review process (input from seven individuals), draft legal appendix, as well as a spreadsheet
noting each substantive comment from internal review and how each of these comments was
addressed.
The version included in this deliverable will be disseminated by WRI and project partners to select
decision-makers through the external review process. External reviewers will include Piers Gillespie
(Solidaridad), Philip Wells (Daemeter Consulting), I Made Sudana (Sekala), Zaky Prabowo (Indonesian
REDD+ Task Force), Sophie Persey (ex-Zoological Society of London/ReaKaltim Plantations), Chip Fay
(Climate Land Use Alliance), Patrick Andersen (Forest People’s Programme).
As described the Q6 Quarterly Report submitted by WRI on June 30 2012, the first part of the “how to”
guidance developed under this grant (how to identify potentially suitable degraded land) has already
been published as a working paper in April 2012. This was done in order to ensure publication prior to
the launch of the Suitability Mapper web application. This draft document serves as the second part to
the “how to” series and focuses on approaching legal classification challenges.
This document contains both a summary of existing legal procedures for companies and an analysis of
challenges for policy-makers. More specific details on implementation are found in the Appendix.
1
Contact: Anne Rosenbarger, World Resources Institute, Bali, Indonesia +62 812 39394363, arosenbarger@wri.org .
Page 1 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
How to change legal land use
classifications to support more
sustainable palm oil in Indonesia
Authors: Beth Gingold, Anne Rosenbarger, Rauf Prasodjo, Ariana Alisjahbana, Andika Putraditama
Executive Summary
Palm oil industry and government leaders in Indonesia have announced goals to expand palm oil
production while avoiding forest loss and social conflicts. Realizing these goals would contribute to
economic growth and job creation, enhance the competiveness of the Indonesian palm oil industry in
the growing global market for more sustainable palm oil, and contribute to national ambitions to reduce
greenhouse gas emissions.
Whether these goals are achieved will be highly dependent on where new oil palm plantations are
established and how local rights and interests are respected during site selection processes. This in turn
is highly dependent on government spatial planning and permitting processes which determine where
companies can legally establish plantations. Legal classifications often do not reflect biophysical land
cover reality, rendering suitable lands with low carbon and biodiversity values legally unavailable for
agricultural expansion.
This brief provides a technical summary of existing legal methods for changing current land use
classifications identified through a desktop legal review, a case study of the application of these
methods under Project POTICO, a discussion of challenges to implementing these methods, and
recommendations for palm oil companies and Indonesian policy-makers. A detailed legal appendix is
also included for reference.
Page 2 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Table of Contents
Executive Summary....................................................................................................................................... 2
Introduction .................................................................................................................................................. 4
Methods for Changing Legally Allowable Land Uses .................................................................................... 7
Single reclassifications ............................................................................................................................ 10
Multiple Reclassifications ....................................................................................................................... 11
Local/special designations ..................................................................................................................... 12
Application: Testing Methods in the Field .................................................................................................. 15
Discussion of Findings ................................................................................................................................. 19
Challenge 1: Financial Viability (Length and Cost) .................................................................................. 19
Challenge 2: Legal Clarity ........................................................................................................................ 20
Challenge 3: Consistency with sustainability standards ......................................................................... 22
Recommendations .................................................................................................................................. 23
Recommendations for palm oil companies: ........................................................................................... 23
Recommendations for Indonesian policy-makers: ................................................................................. 23
Page 3 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Introduction
Palm oil industry and government leaders in Indonesia have announced goals to expand palm oil
production while avoiding forest loss and social conflicts.2 Realizing these goals would contribute to
economic growth and job creation, enhance the competiveness of the Indonesian palm oil industry in
the growing global market for more sustainable palm oil, and contribute to national ambitions to reduce
greenhouse gas emissions. 3
Whether these goals are achieved will be highly dependent on where new oil palm plantations are
established and how local rights and interests are respected during site selection processes.4 This in
turn is highly dependent on government spatial planning and permitting processes which determine
where companies can legally establish plantations.
Both industry and government standards for certified sustainable palm oil include provisions designed to
contribute to these goals. The Roundtable on Sustainable Palm Oil (RSPO) has developed a voluntary,
market-based certification standard which includes requirements to maintain “high conservation value”
(HCV) forests and to obtain the “free prior and informed consent” (FPIC) of local people.5 The Indonesia
Sustainable Palm Oil (ISPO) certification system, a legal standard still under development by the
government as of October 2012, is also expected to include provisions related to avoiding social
conflicts and loss of natural forest and biodiversity.6
2
E.g. Roundtable on Sustainable Palm Oil requirements on its P&C Criterion 5.2 on the identification of rare, threatened or
endangered species and HCV habitats, Criterion 6.1 on identification of social impacts of plantation in plantation and mill
management, Criterion 7.1 on comprehensive and participatory independent social and environmental impact assessment,
Criterion 7.3 on requirement of new plantation to maintain or enhance HCVs, Criterion 7.5 and 7.6 on requirement of new
plantation to address local people’s rights and interests in FPIC; Golden Agri Resources (GAR) initiatives on its Forest
Conservation Policy aiming to achieve no-deforestation footprint on their products. See
<http://www.rspo.org/blog/topic/33/rspo_pandc_specific_by_principle> for complete RSPO P&C and <http://goo.gl/iooVz> for
GAR’s Forest Conservation Policy.
3
Indonesia’s government sets target to reduce its GHG emission by 26%—or 41% with international assistance—while
maintaining 7% economic growth and 8-10% poverty reduction as stated by Presidential Decree No. 61 Year 2011 (National
Action Plan on Greenhouse Gas Emission Reduction) and National Medium-Term Development Plan See <
http://www.sekretariat-rangrk.org/> & <http://bappenas.go.id/get-file-server/node/8943/>
4
See Gingold. 2011.Wolrd Bank Group, Palm Oil and Poverty. World Resources Institute webstory.
<http://www.wri.org/stories/2011/03/world-bank-group-palm-oil-and-poverty>
5
The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 to “promote the production and use of sustainable
palm oil for People, Planet, and Prosperity” (www.rspo.org). The High Conservation Value approach refers to six High
Conservation Values (HCVs), “which cover the range of conservation priorities shared by a wide range of stakeholder groups,
and include social values as well as ecological values” (www.hcvnetwork.org). According to the RSPO’s guidance document for
companies, developed by the Forest People’s Program, Free, prior, and informed consent (FPIC) “ implies informed, noncoercive negotiations between investors and companiesor the government and indigenous peoples / customary law
communities prior to oil palm estates, timber plantations or other enterprises being established and developed
on their customary lands”(http://www.rspo.org/en/document_fpic).
6
Refer to draft ISPO document, have to support this statement, or might need to modify it (e.g. to we “hope” It will include)
depending on what the draft document actually says.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Companies can get a head-start on fulfilling these standards by identifying potentially suitable areas for
expansion using a method developed by the World Resources Institute (WRI) and Sekala under Project
POTICO.7 This method consists of a desktop study and field assessments and includes economic,
environmental, social, and legal considerations. The method and data are available online on an
interactive website.8 Box 1 provides more information about Project POTICO.
Box 1.
Project POTICO: Sustainable Palm Oil on Low Carbon Degraded Land
The World Resources Institute (WRI)’s Project POTICO supports sustainable palm oil production and improved forest
management in Indonesia. Our pilot project in West Kalimantan links the expansion of oil palm cultivation on degraded
land with sustainable forest management while respecting local rights and interests. Our research and outreach
activities support market and policy incentives for sustainable palm oil production and improved forest management in
Indonesia.
Palm oil has potential to contribute to Indonesia’s development goals in line with Indonesia’s emissions-reduction
strategy if expansion follows sustainable practices such as respecting local people’s rights and avoiding deforestation.
Sustainable palm oil refers to palm oil produced in accordance with established standards such as those of the
Roundtable on Sustainable Palm Oil (RSPO).
New Web Tools Launched October 30, 2012
POTICO has develped two web applications designed to enable key stakeholders to make improved land use decisions
concerning sustainable palm oil. Building off WRI’s Interactive Atlases, these web tools will provide land use and land
cover data for the Indonesian island of Kalimantan. The Forest Cover Analyzer enables users to assess forest cover
change and risks related to sustainable palm oil production in areas of their choice in Kalimantan, Indonesia. The
Suitability Mapper enables users to identify potentially suitable sites for sustainable palm oil production.
7
The working paper “How to Identify Degraded Land for Sustainable Palm Oil in Indonesia” by WRI and Sekala
demonstrates how to implement a quick and cost-effective method for identifying potentially suitable “degraded
land” for sustainable palm oil production in Indonesia and presents results from the application of the method in
West Kalimantan and Central Kalimantan. The method consists of a desktop analysis as well as field assessments.
The paper can be downloaded at < http://www.wri.org/publication/identifying-degraded-land-sustainable-palmoil-indonesia >.
8
Access the Suitability Mapper online at http://www.wri.org/project/potico/about-suitability-mapper.
Page 5 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
However, a major challenge facing companies is ensuring that an area identified as suitable for a
plantation according to sustainability standards is also legally classified to allow the necessary permits to
be issued for the proposed new land use.9
Across Kalimantan, the Indonesian portion of the island of Borneo, 5.3 million hectares that were
identified as potentially suitable by the Project POTICO desktop study were not legally classified to allow
for plantation development.10 While field assessments are necessary to reject or confirm the suitability
of each site, this analysis suggests that there are large areas which may be potentially suitable that
would not be considered for development due to their legal classification.
Meanwhile, 8.6 million hectares found to be not suitable by the Project POTICO desktop study —
including forested areas—were legally classified to allow for conversion to oil palm plantations11. Many
companies have already been issued permits to begin plantation development in areas which are not
suitable. For example, in the Project POTICO pilot field site in West Kalimantan, a palm oil company was
issued a permit in a heavily forested peat swamp on land legally classified to allow for plantation
development. On the other hand, a nearby area that met Project POTICO suitability criteria was legally
off-limits for plantation development. This pilot project is described in the Application section.
The government has recognized this problem and in June 2012 proposed a “land swap” policy to help
address inconsistencies in land classification. The policy is part of a draft national “REDD+ Strategy”
aiming to reduce emissions from deforestation and forest degradation. However the details of this
policy are undefined. For example, it is unclear whether in this context “land swap” refers to changes in
legal classifications, permits, or both, and what criteria would be used to determine whether a land
swap should be implemented.
In the meantime, companies seeking to develop new plantations in suitable areas need to understand
their options for changing legal land use classifications.
This brief provides a technical summary of existing legal methods for changing current land use
classifications identified through a desktop legal review, a case study of the application of these
methods under Project POTICO, a discussion of challenges to implementing these methods, and
recommendations for palm oil companies and Indonesian policy-makers. A detailed legal appendix is
also included for reference.
9
Details regarding land use classifications and corresponding allowable land uses are detailed later in the paper.
For full details on land tenure and legal status of lands in Indonesia see Appendix A2. For details on forest estate
and permit classifications see Appendix B.
10
In Indonesia, all land is legally classified according to its allowable uses. An area’s land use classification
determines which rights and permits for which allowable uses can be recognized or issued. In this example, the 5.3
million ha that were identified as potentially suitable by the POTICO desktop study, but not legally classified to
allow for plantation development were lands classified as anything other than non-forest estate (area penggunaan
lain; APL) or convertible production forest (Hutan Produksi Konversi; HPK)
11
Areas legally classified as either non-forest estate (Areal Penggunaan Lain; APL) or convertible production forest
(Hutan Produksi Konversi; HPK)
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Although this paper focuses on palm oil production, the findings are relevant to any developer or
community group seeking legal recognition for a project aiming to pursue more sustainable land
management, whether for oil palm cultivation, forestry activities, or other land uses.
Methods for Changing Legally Allowable Land Uses
This section summarizes the existing legal procedures for changing allowable land uses in a given area.
These include procedures for changing land use classifications to allow plantations, as well as
procedures for changing classifications to dis-allow plantations. More details on each procedure, as well
as background on the Indonesian legal context relevant to land use classifications and land rights, can be
found in Appendix A and Appendix C.
In Indonesia, all land is legally classified according to its allowable uses. An area’s land use classification
determines which rights and permits for which allowable uses can be recognized or issued. Appendix A2
describes the history and legal context of the current classification system.
All land in Indonesia is classified as either Forest Estate (Kawasan Hutan) or non-Forest Estate (Areal
Penggunaan Lain (APL)). The Forest Estate is further classified into functional categories which
determine allowable land uses.12 Table 1 summarizes these legal classifications and the allowable land
uses in each classification. For more detailed information see Appendix B.
The Forest Estate is under the jurisdiction of the Ministry of Forestry as per the Forestry Law of 1999.13
In 2011, approximately 70 percent of Indonesia’s total land area (187.6 million hectares) is classified by
the Ministry of Forestry as Forest Estate (131 million hectares).14
Non-Forest Estate, or APL, is outside the jurisdiction of the Ministry of Forestry and generally under the
control of the district (kapubaten) level.15 In these areas, by convention the legal basis for governing
land use is the Basic Agrarian Law (Law No 5 of 1960).16
12
The three main functional categories of forest estate as stated by the Law No. 41 of 1999 on Forestry are conservation forest,
protection forest and production forest. Each of these functional categories has subcategories, which further explain the
specific function of each forest. For more legal reference on this categorization, refer to:
http://www3.bkpm.go.id/file_uploaded/Law_4199.htm.
13
The term forest estate was first used as a legal term in the Law No. 5 of 1967 on Forestry. Since the publication of the law,
forest estate falls under the jurisdiction of Ministry of Forestry (as it is now stated by the Law No. 41 of 1999 on Forestry).
Forest control by the State does not imply it takes ownership of the forests, but the State authorizes the government to control
and manage everything related to forests area. This concept of state-controlled forest tenure is in accordance to the 1945
Constitution, Article 33, which stated that the land, water and natural resources contained therein shall be controlled by the
State. See: Kawasan Hutan dan Perencanaan Kehutanan. Warta Tenure, No. 2 May 2006. Working Group on Forest Land
Tenure. Accessible at http://www.wg-tenure.org/file/Warta_Tenure/Edisi_02/Warta_Tenure_Edisi_2e_infokebijakan.pdf
14
Despite this number, only 10.8% of the areas has been designated as forest estate and inserted into the state gazette. The
rest of the non-designated forest estate was merely appointed by the Ministry of Forestry. See Indonesia Forestry Statistic
<http://www.dephut.go.id/files/BUku%20Statistik%20Juli%202012_terbaru.pdf> and National Forestry Plan
<http://www.dephut.go.id/files/DitRenHut_RKTN_2011.pdf>.
15
Note: in urban areas APL lands may be under the jurisdiction of mayors.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
16
Accessible at < http://portal.djmbp.esdm.go.id/sijh/UU%205%20Tahun%201960_%20UUPA.pdf> Note that the use of the
Agrarian Law only on APL land is only based on convention. By content, Agrarian Law regulates all land, not only
APL. There is no single law product that designates Agrarian Law should only be applied to APL.
Page 8 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Table 1. Land Use Classifications by Function
PROTECTION FOREST (HUTAN
LINDUNG; HL)
SUB-CLASSIFICATION
NATURAL RESERVE
(HUTAN SUAKA)
NATURE
CONSERVATION AREA
(HUTAN PELESTARIAN
ALAM)
COMMUNITY FOREST
(HUTAN
MASYARAKAT)
VILLAGE FOREST
(HUTAN DESA)
PERMANENT
PRODUCTION FOREST
(HUTAN PRODUKSI
TETAP; HP)
LIMITED
PRODUCTION FOREST
(HUTAN PRODUKSI
TERBATAS; HPT)
CONVERTIBLE
PRODUCTION FOREST
(HUTAN PRODUKSI
KONVERSI; HPK)
NON-FOREST ESTATE (AREAL
PENGGUNAAN LAIN; APL)
PRODUCTION FOREST (HUTAN
PRODUKSI)
FOREST ESTATE (KAWASAN HUTAN)
CONSERVATION
FOREST (HUTAN
KONSERVASI; HK)
MAIN
CLASSIFIC
ATION
FUNCTION
Preserve animal & plant
biodiversity as well as its
ecosystem, also functions as an
area for life-supporting systems.
Protect life supporting systems,
preserve biodiversity and
sustainable utilization of natural
resources and their ecosystems.
Forest estate (without rights)
whose main utilization is for the
benefit of the community.
Forest estate (without rights),
managed by the village and utilized
for the benefit of the village
community.
Forest estate with main function of
generating forest products.
Forest estate with main function of
generating forest products via
selective/limited logging scheme
Forest estate with main function of
generating forest products but
spatially reserved for use of
development other than forestry
CRITERIA
PERMITTED ACTIVITIES
Varies according to its subclassification (natural reserve,
wildlife reserve)
Research, science, education and limited tourism
Varies according to its subclassification (national park, grand
forest park, nature recreational
park, hunting park)
Research, science, education, cultivation activities, cultural activities and limited
tourism
Weighed score of >175 or, (1) slope
class of 40% or more; (2) 2000+ m
above sea level; (3) soil is
extremely vulnerable to erosion
with slope class of 15% or more; (4)
water catchment area; (5) coastal
protection area
п‚· Forest area utilization activities (cultivating medicinal/decorative plants, fungi,
apiculture, swiftlet nests, capturing wildlife, cattle feed)
п‚· Utilization of environmental services (water flow, ecotourism, biodiversity,
environmental protection, carbon absorption and storage)
п‚· Tree planting
п‚· Extraction of non-timber forest products (rattan, bamboo, honey, resin, fruits,
fungi)
п‚· Utilization of non-timber forest products
п‚· Use of environmental services (water and water resources, ecotourism,
biodiversity, environmental protection, carbon absorption and storage.
п‚· Utilization of non-timber forest resources (rattan, bamboo, resin, tree barks,
leaves, palm, sago, aloe, mangrove palm, fruit and seeds). Activities include the
planting, harvest, enrichment and marketing of these products.
Weighed score <125, Located
outside of protection forest,
conservation forest and hunting
areas
Weighed score 125-174
Must be outside of protection
forest, conservation forest and
hunting areas
Forest estate area that has been
spatially designated for non-forest
development purposes
Clear cutting forests and industrial timber plantations
Timber extraction only for selective logging
Clear cutting and industrial timber plantations, can also be released to be nonforest land (Areal Penggunaan Lain – APL).
Land outside the forest estate designated for non-forestry use. E.g. agriculture, settlement, etc.
Compiled from: Law No. 41 of 1999 on Forestry, Minister of Forestry Regulation No. P.50 of 2009, Minister of Forestry Regulation No. 37 of 2007, Government
Regulation No. 68 of 1998
Page 9 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Three types of procedures that can be used to legally change allowable land uses were identified
through a desktop review of laws and regulations. These are:
1) Single reclassifications – procedures that change the land use classification of a single area.
2) Multiple reclassifications – procedures that change (or “swap”) the land use classifications of
multiple areas simultaneously.
3) Local/special designations – procedures that change the allowable land uses in a designated
local area, without changing the land use classifications.
The following section describes several legal procedures of each of these types, governed by multiple
laws and regulations.17 The relevant procedures depend on initial land classifications, intended uses, and
project goals. Table 2 summarizes these procedures.
Single reclassifications
There are several legal procedures that change the land use classification of a single area. These can be
used either to allow non-forestry uses (e.g. oil palm plantations) that were previously disallowed, or to
disallow non-forestry uses where they were previously allowed. Note that two or more single
reclassifications pursued independently but simultaneously could achieve the goals of a multiple
reclassification or “land swap.”
The most common single reclassification is the “forest estate release mechanism” (pelepasan kawasan
hutan) which allows the conversion of HPK to APL.18 This method applies to provinces with at least 30
percent of the area classified as Forest Estate.19 To date approximately 4.5 million hectares of land now
planted in oil palm was formerly classified as HPK.20 For full details of this process see Appendix C.2.
A second single reclassification procedure, “forest estate rescoring” (penilaian ulang kawasan hutan)
allows for the reclassification of land within the Forest Estate. In the case that a potentially suitable area
for a certain crop is classified as a functional category other than HPK, this procedure could be used to
reclassify the area as HPK to make it eligible for reclassification to APL using the forest estate release
18
The mechanism is recognized by Government Regulation No. 10 of 2010 on Procedures of Changing the Allocation and
Functions of Forest Estate, Paragraph 3, Article 19. See <http://www.dephut.go.id/files/pp10_10.pdf>.
19
Most of the provinces meet the 30% minimum requirement of forest estate to change its forest estate function classification
into convertible production forest and/or to conduct forest estate relinquishment mechanism. Only 7 out of 33 provinces are
unable to meet the 30% forest estate requirement (DKI Jakarta, West Java, Central Java, East Java, DIY Yogyakarta, Banten,
Bali). Out of these 7 provinces, only two have significant forested area (Central Java and East Java).
20
In relations to the RTRWP, around 15.7 million hectares of forest have been suggested to be converted to APL. By the end of
December 2010, there were already 520 forests estate release application at the Ministry of Forestry with an average area of
200.000 Ha. per applicant. Up until the end of 2009, almost half of Indonesian forests were not managed intensively. See
Kesatuan Pengelolaan Hutan p. 17-18. Accessible at < http://www.reddindonesia.org/pdf/Buku%20Pembangunan%20KPH%2016%20Des%202011.pdf>
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
mechanism. 21 This procedure can also be used to allow for a single reclassification of a forested area
that is currently classified as HPK to one of the classifications that is not eligible for removal from the
Forest Estate using the forest release mechanism.22
This rescoring process involves re-evaluating the legal classification of the area based on a scoring
system which includes slope, soil type, and rainfall intensity.23 Not included in this scoring system are
current land cover (forested or non-forested), peat depth, and land use information.
APL areas can be reclassified to become part of the Forest Estate through a process of “forest estate
designation” (penetapan kawasan hutan) conducted by the Ministry of Forestry, which is a four-step
process based on a forest inventory and involving the review of national, provincial, and district spatial
plans.24 There are two ways to do this, one “partial,” which is further detailed in a Ministry of Forestry
regulation, and one “provincial” which as of July 2012 had no implementing regulation provided to
explain how to conduct the method.25 For full details of this process see Appendix C.1.
Multiple Reclassifications
There are several legal procedures for simultaneously changing the land use classifications of two or
more areas. In general, increasing the number and size of areas involved increases the complexity of the
procedures and decreases the likelihood that site- or community-specific concerns regarding
implications for land rights will be adequately addressed.
The legal procedure that allows for the simultaneous reclassification of two areas is known as the
“forest exchange mechanism” (tukar-menular kawasan hutan) and has been described by the Ministry
of Forestry as a “land swap.”26 In this usage, land swap refers purely to changing classifications, not
moving existing permits. This procedure can be applied to the reclassification of APL to HP or HPT, and
vice versa.27
This mechanism can be used in provinces where the Forest Estate is less than 30 percent of the land
area and the forest release mechanism does not apply. In these provinces, the minimum exchange ratio
21
To release certain forest into APL, the area needs to fulfill the scoring requirement of Convertible Production Forest (HPK).
According to Ministry of Agriculture Decree No. 837/Kpts/Um/11/1980, HPK score must be less than 125 and reserved for nonforestry purposes. See: < http://www.satgasreddplus.org/download/Forest%20Lands%20Suitability001.pdf>
22
This could facilitate the development of community forestry or ecosystem restoration projects. If a forested area is
classified as HPK it can be reclassified within the Forest Estate, for example to HP, using the forest estate rescoring
procedure.
23
Government Regulation No. 44 of 2004 on Forestry Planning stated the scoring of forest’s biophysical variables is required to
determine forest function. See < http://www.jkpp.org/downloads/PP_No44-2004.pdf>.
24
See Appendix C. There is no legal requirement for the Ministry of Forestry to designate according to national, provincial, or
district spatial plans. As little as 10.8% classified as Forest Estate by maps from the Ministry of Forestry have actually gone
through the steps in this designation process.
25
26
Need to specify which Ministry of Forestry regulation and explain the terms partial etc
See Article 10 of Government Regulation No. 10 of 2010 on Procedures of Changing the Allocation and Functions of Forest
Estate. Accessible at <http://www.dephut.go.id/files/pp10_10.pdf>
27
Ibid.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
of Forest Estate to APL is 1:2, meaning that at least twice as much APL land must be reclassified as
Forest Estate than Forest Estate land reclassified as APL. In provinces where the Forest Estate is more
than 30% of the land area, the minimum exchange ratio is 1:1.28 Very few precedents for the application
of this procedure exist.29
An amendment in July 2012 to the forest exchange mechanism regulations allows for an expedited
forest exchange for companies that were issued permits before the spatial planning law of 2007, which
now conflict with the current legal classifications.30 Meaning that a palm oil company issued a permit in
land that was classified as APL prior to 2007, but that was reclassified as part of the Forest Estate
through the implementation of the spatial planning law, would be eligible to use this expedited process.
This could also be considered a “land swap” referring to a legal classification change that is linked with
changing permits
Changing many classifications at once can be achieved through a spatial planning revision process
under Law No. 26 of 2007. 31 Spatial plans are made at district and provincial levels through multiple
processes and incorporated into national plans. Spatial plans made under this law are valid for 20 years
and should be reviewed every five years. Multiple processes are governed by many laws and
regulations, as described in Appendix C.4.
An alternative method for changing many classifications at once is through a forest audit mechanism in
which the Ministry of Forestry would conduct a rescoring exercise that applies to many areas.32
Local/special designations
There are also procedures for designating localized special areas to change allowable land uses without
changing their legal land use classifications.
A 'forest with rights' (hutan hak) reclassification process can be done in forested areas in APL with
demonstrable33 local rights. The local regent/mayor can initiate a request for an area to become hutan
28
See Article 12 of Government Regulation No. 10 of 2010 on Procedures of Changing the Allocation and Functions of Forest
Estate. Accessible at <http://www.dephut.go.id/files/pp10_10.pdf>
29
One example of the forest exchange mechanism is Surat Menteri Kehutanan No.S.13/Menhut-II/2005, which
was used to change the status of Baloi Dam Forest Estate in Batam.
30
Government Regulation No. 10 of 2010 was amended with Government Regulation No. 60 of 2012. Accessible at <
http://www.depdagri.go.id/media/documents/2012/08/27/p/p/pp_no.60-2012.pdf>
31
See �Revision of spatial planning’ in Article 16 of Law No. 26 of 2007 on Spatial Planning. Accessible at <
http://hukum.jogjakota.go.id/upload/UU%20No.26-2007ttg%20Penataan%20Ruang.pdf>
32
According to Minister of Forestry Regulation No. P-10/Menhut-II/2010 on Mechanism & Procedure of Forest Estate Audit, the
audit is conducted through updating the audited forest estate data according to its designation status, rescoring the forest
estate and analyzing the overlay of spatial data. See:
<http://kehutanan.kalbarprov.go.id/joomla15/images/peraturan/P10_2010.pdf>
33
Demonstrating the right of land’s right can be evidenced by recht title/land ownership in the form of (1) Certificate of
Ownership or quotation from Letter C Book or Girik Letter (Surat Girik) from local authorities (issued by the Head of the relevant
Sub-District/Village to the “landowner” evidencing their payment of local land taxes) or other information that is recognized by
National Land Agency; (2) Certificate of Right to Use (Sertifikat Hak Pakai); and (3) other letters/documents admitted as
Page 12 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
hak . This forested area can then be designated as �private forest’ (hutan rakyat), within APL land.34 If
the forested area has the specific function conservation or protection, an additional process can be used
to reclassify the area as forest estate after compensating the local rights holders.35
An enclave solution allows for the creation of relatively small enclaves within Forest Estate areas where
local people can legally conduct non-forestry activities.36 A local conservation area designation can be
implemented by a regent/mayor in APL areas to restrict uses, for example to those uses allowed in areas
classified as Conservation Forest.37
Areas that are legally designated as Hutan Desa or Hutan Kemasyarakatan are also within the Forest
Estate and have functional category classifications of the Ministry of Forestry but have additional use
restrictions limited to communities.38
evidence of land acquisition or other proof of land ownership. See p. 32 of Procedures on wCommunity Based Development of
Forest Management Program. Accessible at : < http://www.redd-indonesia.org/pdf/Buku_Saku_PHBM_web.pdf
34
Legal ground on the use of �forest with rights’ is Minister of Forestry Regulation No. P.26/Menhut-II/2005 on Guideline for
the Use of Forest with Rights. Accessible at < http://www.dephut.go.id/INFORMASI/skep/2005/P26_05.htm>
35
See Article 19 of is Minister of Forestry Regulation No. P.26/Menhut-II/2005 on Guideline for the Use of Forest with Rights.
36
To determine the eligibility of certain area inside forest estate to be enclave, there are five steps procedure that needs to be
done. First step is to do site verification to collect the condition of social and biophysical features of the area; second is to do
feasibility study that includes physical feasibility, social feasibility, economic, cultural and legal and settlement history; third is
to do variable measurement of the enclave candidate area using scoring mechanism; fourth is determination of settlement
(whether the area can be designated as enclave area or to be resettled); the last is designation of enclave area. See
http://bpkh8.net/pemolaan-kawasan-hutan/identifikasi-calon-enclave/ for detail of the procedures.
37
The Presidential Decree No. 32 of 1990 on Management of Protected Areas can serves as the legal ground to enact a local
conservation areas with the authority of Governor and District Head (Bupati), designated by Provincial Government Regulation
(Peraturan Daerah Tingkat I – Perda). See Article 34 of Presidential Decree No. 32 of 1990 for details of the procedure.
Accessible at <http://www.jkpp.org/downloads/Keppres_32_1990.pdf>
38
See Appendix B on Categories of Forests.
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Table 2. Summary of procedures for changing allowable land uses
Type
Procedure
Initial
Classification
HPK
Final
Classification
APL
Comments
forest estate
rescoring
(penilaian ulang
kawasan hutan)
HK, HPT, HP, or
HPK
HK, HPT, HP,
or HPK
forest estate
designation
(penetapan
kawasan hutan)
forest exchange
mechanism
(tukar-menukar
kawasan hutan)
APL
HK, HPT, HP,
or HPK
Can be used in combination with
forest estate release mechanisms.
Initiated by regent/mayor if within
one district/city or by governor if
multiple districts
Designation of forest estate
conducted by Ministry of Forestry
HPT or HP and
APL
APL and HPT
or HP
expedited forest
exchange
(tukar-menukar
kawasan hutan
yang dipercepat)
spatial planning
revision process
(revisi rancangan
tata ruang dan
wilayah)
forest audit
mechanism
(mekanisme audit
kawasan hutan)
enclave solution
(…?)
Hutan Desa or
Hutan
Kemasyarakatan
local conservation
area (area
konservasi lokal)
HPT or HP and
APL
APL and HPT
or HP
HK, HPT, HP,
HPK, and/or
APL
HK, HPT, HP,
HPK, and/or
APL
Plans created for district, province,
and national spatial plans. Multiple
decision makers involved in process.
Revised every 5 years.
HPT, HP, or
HPK
HPT, HP, or
HPK
No change
Allows non-forestry uses within Forest
Estates. Initiated by regent/mayor.
Restricts uses within Forest Estate to
communities
APL
No change
Local/special
designation
Multiple reclassification
Single reclassification
forest estate
release mechanism
(pelepasan
kawasan hutan)
No change
Most common method. Initiated by a
minister level government official,
regent/mayor, governor, head of
corporation, or head of a foundation
Simultaneous reclassification of two
areas. Initiated by the Minister of
Forestry, or a government official
equivalent to a minister, governor,
regent/mayor, head of governmental
or private business entity or head of a
foundation
Existing permit required
Restricts uses of APL to conservation
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
'forest with rights'
(hutan hak)
APL
No change
Allows forest uses in APL; can be used
as first step to reclassify APL as Forest
Estate. Initiated by regent/mayor
Application: Testing Methods in the Field
In addition to conducting a desktop legal review, WRI compiled and assessed documentation of an
attempt to change the legal land use classifications in a pilot project area in West Kalimantan, Indonesia.
This section provides a short summary of this experience.
In 2009, under Project POTICO, WRI and Sekala initiated a pilot project to facilitate a “land swap.” In the
original conception of Project POTICO, “land swap” referred to a change in legally permitted
management rather than to a change in legal land classifications. In other words, a company with a
permit on forested land would agree not to develop the area and instead look to develop a similarly
sized area that was not forested (or “degraded”)39, in accordance with the RSPO’s certification
requirements. This would require obtaining a permit on the degraded land, as well as the free, prior and
informed consent of local people.40 At the same time, the company would work with local communities
and government to develop a sustainable management plan for the original permitted area. A successful
swap would require implementing a method for changing legal classifications if the initial legal
classifications are inconsistent with the desired final land uses (e.g. palm oil on the degraded land,
community forestry on the forested land).
In the pilot site, PT Smart, major palm oil company had a location permit (izin lokasi) on forested
peatland that was classified as APL.41 The company was willing to forgo developing that area for oil palm
and investigate alternative management options for maintaining the forest. The company had also made
public commitments to fulfilling the RSPO principles and criteria in new plantations and has since
39
In the context of Project POTICO, the term “degraded” refers to an area with low carbon stocks and low
biodiversity levels. The “degraded” area identified for this application was selected as �potentially suitable’ based
on a full range of environmental, economic, social, and legal criteria developed under Project POTICO. Details on
this method can be found in the working paper “How to identify degraded land for sustainable palm oil in
Indonesia”, available online at <
http://pdf.wri.org/working_papers/how_to_identify_degraded_land_for_sustainable_palm_oil_in_indonesia.pdf
>.
40
Obtaining the free, prior, and informed consent of local people is a requirement of the RSPO’s Principles and
Criteria. The RSPO provides a guidance document to companies, available online at <
http://www.rspo.org/en/document_fpic > .
41
Location permit (izin lokasi) is a permit given to company to acquire the land needed for investment and it also
serves as permit to transfer rights and to utilize the land for business purposes. The permit is given by the National
Land Agency. For more information on location permit, refer to Head of National Land Agency (BPN) Regulation
No. 2 of 1999. [http://hukum.unsrat.ac.id/men/menagraria_2_1999.pdf]
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
announced specific forest conservation and social engagement policies that go beyond these
requirements.42
WRI and Indonesian partner organization Sekala43 worked with the company to identify a nearby
potentially suitable, “degraded” area where communities had expressed preliminary interest in the
potential for oil palm plantation development. This area was identified through a method that included
both a desktop analysis and rapid field assessments to identify priority areas, followed by more in-depth
surveys and discussions with local community members, government officials, and NGOs, once priority
sites had been identified.44 Preliminary interest from local communities was also noted prior to
WRI/Sekala’s involvement, on multiple occasions in which community members approached PT Smart to
inquire about development in the area.
Despite the potential suitability of the area and interest expressed by the local community, PT Smart
had not yet pursued any plans for development prior to WRI/Sekala’s involvement, owing to existing
legal complications. The site was legally classified as Limited Production Forest (HPT) and Production
Forest (HP) and therefore would need to be reclassified to APL to allow for legal palm oil production.
In order to facilitate the pilot “land swap” that would change the legally permitted management of both
the forested and degraded sites, WRI/Sekala investigated the possibility of implementing the various
methods for changing legal land classifications identified in the desktop review above. Initially, single
reclassifications were not considered attractive. The forest estate release mechanism did not apply
because the degraded area was not classified as HPK, and a double reclassification was considered more
in line with the goals of the project which also included maintaining the forested area as forest.
The double reclassification option forest exchange mechanism was considered first, but determined by
the company and field team to be too long, complicated, and expensive. Since the provisional spatial
planning process was in its five year review period45, the team opted instead to take advantage of the
short-lived opportunity to achieve reclassification through this larger nationwide process. This was also
42
See Greenpeace scorecard on Palm Oil Producers <
http://www.greenpeace.org/international/en/publications/Campaign-reports/Forests-Reports/Palm-OilScorecard/>
43
Sekala aims to develop realistic, tangible, and innovative solutions for environmental problems to generate
benefits for local people and the environment. Established in Bali in 2005, Sekala works at local, provincial, and
national levels across Indonesia, focusing on land use planning, forest governance, community mapping, capacity
building, conflict resolution, remote sensing, and spatial analysis.
44
See Gingold et al. 2012. “How to identify degraded land for sustainable palm oil in Indonesia.” Working Paper.
World Resources Institute and Sekala, Washington D.C. Available at http://www.wri.org/publication/identifyingdegraded-land-sustainable-palm-oil-indonesia
45
This process had just begun, according to Undang-undang tentang Tata Ruang/2007. This law states that
national, provincial, and district spatial plans need to be constructed and approved.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
seen as an opportunity to bring more viewpoints and participation from communities into the existing
government process. 46
WRI and Sekala engaged district, provincial, and national decision makers by providing detailed
recommendations that reflected current land cover, land use, and conservation values as well as
perspectives from the local communities and palm oil companies. This engagement process also
included facilitating discussion between local communities, PT Smart, and local government officials.
The project team’s recommendations were successfully incorporated into the drafts of district and
provincial spatial plans, due in large part to engagement of other stakeholders, which included NGOs
working to improve spatial planning in the area. Input from the company to local decision makers that it
would support reclassification of the forested area despite having a permit on it were also critical to the
incorporation of these recommendations.
Despite this initial success, the provincial plan has not yet been officially approved by the national
government, and it is unclear whether or when it will be approved. Since the national process includes
review of all provincial maps, the timeline is long, unclear, and prone to delay due to politics unrelated
to the specifics of any given field project. The field team has also found it difficult to determine where
the plan is in the process, and who in the government is responsible for taking next steps. See Appendix
C.4 for additional details.
While the spatial planning process was stalled, the project team conducted several workshops with
community members, government officials, and PT Smart to discuss potential development
opportunities (with regard to palm oil as well as other development options), including a sample
cooperation agreement provided by PT Smart outlining development and management details of a
sample plantation partnership.47 The team also facilitated a detailed community mapping process in
both the forested and degraded areas with local facilitators, to help prepare for possible future
development negotiations guided by the principle of free, prior and informed consent.
Over the course of three years, and still without a definitive end date in sight for the approval of the
provincial spatial plan, the team’s approach gradually shifted from trying to implement a land “swap”
that linked the changes in management of the two areas through a multiple reclassification option, to
46
Comprehensive procedures for obtaining free, prior, and informed consent of local communities with regard to
potential legal land use classification changes are not included as part of existing legislation related to the spatial
plan revision process. However, by getting involved in this process, WRI and Sekala were able to introduce
perspectives from the local community that might have otherwise not been considered, facilitate discussion
between decision makers and local community members, and inform communities of the process and its potential
implications.
47
Plantation partnership refers to an inti/plasma scheme. Under Indonesian law, at least 20% of an area permitted
for palm oil development must be “plasma”, which is developed by the local community, although frequently
managed by the palm oil company. The cooperation agreement provides details of how the development and
management of the “plasma” area would occur.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
investigating single reclassification options which could be pursued simultaneously achieve the pilot
project’s original goals.
The team has recently begun to investigate an enclave solution suggested by the local government. As
described in the Methods section, this option would entail the creation of relatively small enclaves
within Forest Estate areas where local people can legally conduct non-forestry activities. 48 This could
allow the communities in the area to cultivate oil palm while maintaining the HPT legal classification.
The creation of enclaves also aligns with more recent discussions with local communities reflect a
growing interest in smallholder development. Given sufficient local political and community will this may
be a viable solution, although the legal basis has been difficult to determine. In addition, the financial
viability of this scheme for the communities, becoming smallholder developers, would be largely
dependent on how well it is linked with extension services provided by larger palm oil companies
operating in the area, as is the case with most smallholder development scenarios.
In addition, further work remains to identify a legal and financially viable management plan for the
forested area that will effectively maintain its conservation values49. There is little risk of immediate
forest conversion since PT Smart, which holds the concession for the area, is committed to avoiding
deforestation and is open to alternative management options. However, as long as the forested area
remains APL, there is a risk that the company’s permit for oil palm will be revoked and reissued to
another company that is not interested in conservation.50
Although the pilot project remains unfinished, this field experience has informed WRI’s analysis of the
existing legal reclassification methods identified in the desktop legal review. Findings from this analysis
are discussed in the next section.
48
49
50
See Appendix C on Enclave Area Designation for details.
Including both social and environmental values.
See p. 33 on Report of the Field Investigation in Central Kalimantan of the RSPO Ad Hoc Working Group on High Conservation
Values in Indonesia. Accessible at <http://www.forestpeoples.org/sites/fpp/files/publication/2012/08/final-report-fieldinvestigation-rspo-ad-hoc-wg-hcv-indo-july-20113.pdf>
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Discussion of Findings
WRI’s analysis finds that there are multiple methods for changing legal land classifications in Indonesian
law that could in theory be used by [palm oil] companies to facilitate expansion of certified sustainable
palm oil production in areas that were previously legally unavailable. They could also be used to
facilitate the conservation of forested areas that are currently legally available for agricultural uses.
However, in practice, companies face many challenges to changing legal classifications to lands. These
challenges are equally applicable for project developers interested in ecosystem restoration
concessions51 in forested areas and even more daunting for local people interested in strengthening
their land management rights.
Overall, substantial legal reforms will need to be made before companies will have a financially viable,
clear procedure for changing legal classifications that is consistent with sustainability standards
designed to avoid forest loss and social conflicts.
Three categories of major legal challenges identified are described below. While the Indonesian
government has recognized many of these challenges and has begun to take steps to address them, for
example through proposed national REDD+ strategies, these challenges continue to hinder companies.52
Challenge 1: Length and Cost
All of the processes identified require many steps of attaining approvals from multiple government
agencies at different levels, adding substantial additional time and cost to the already lengthy
bureaucratic procedures for acquiring a land use permit.53
For example, when implementing the forest exchange mechanism, after the applicant submits all
administrative requirements to the Ministry of Forestry, the law specifically states that the bureaucratic
process inside the Ministry of Forestry alone can take up to 2273 days—over 6 years.54 This does not
51
The concession is given under the Business License for the Utilisation of Forest Timber Products through
Restoration of the Ecosystem (Izin Usaha Pemanfaatan Hasil Hutan Kayu-Restorasi Ekosistem - IUPHHK-RE). This
type of concession can be given by the Ministry of Forestry as a business license to develop a zone in natural forest
categorized as production forest that has critical ecosystem function that needs to be preserved through
maintenance, protection and restoration of the forest ecosystem. Activities that are allowed by this permit include
assisted regeneration and enrichment planting of local species, breeding of fauna, releasing of flora and fauna to
their natural habitat to restore biotic elements (flora and fauna) and abiotic elements (soil and water) to a region
with native species in order to achieve biological and ecosystem balance. For more detailed information on this
permit, refer to Minister of Forestry Regulation No. 50 of 2010 [http://lpp.dephut.go.id/SFile/peraturan/p1.pdf]
and Procedures for Requesting IUPHHK-RE
[http://www.dephut.go.id/files/Tata%20Cara%20Permohononan%20Dan%20Pemberian%20%20IUPHHK-RE.pdf]
52
For example, proposed REDD+ policies and the Ministry of Forestry plans have called for fast-tracking the Forest Estate
delineation process and developing dispute resolution mechanisms. Amendments to forest exchange mechanism in 2012 to
allow fast track for areas which have permits that were issued before Spatial Planning Law of 2007 which are inconsistent with
Ministry of Forestry classifications under 1999 law.
53
54
Specify which type of permit and refer to appendix where the process is described
This number comes from adding up all of the time frames detailed in the regulations related to this process.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
include time it will take if this particular case needs to be discussed by the National Parliament. A
combination of changing classifications within the forest estate followed by the forest release
mechanism could take 2.5 years within the Ministry of Forestry alone.
In both cases the majority of the cost—the cost of the official research team and the cost of delineation,
respectively—are born by the applicant. Costs of implementing these procedures for the forest
exchange mechanism in the POTICO field project were estimated to be more than $200,000 which was
determined by the company to be prohibitively expensive. 55
Challenge 2: Legal Clarity
Lack of clarity regarding basic questions related to legality of existing legal procedures, classifications,
permits, and customary rights is a major hindrance to implementing procedures to change legal
classifications.
п‚·
No single agreed legal classification map. A prerequisite for implementing a clear process for
changing legal classifications is that there is clear information and agreement on the initial legal
classifications. However there is currently no single agreed government-approved map that
clearly defines in a legally consistent way which areas are Forest Estate and how they are
classified by function. Although there is a single map produced by the Ministry of Forestry, many
spatial planning maps have been created at various jurisdictional levels which have not yet been
harmonized with this map, but are already being used at a local level to guide permitting
decisions.56 For example, Central Kalimantan has a map that has been used to guide where to
issue permits since 2003 which has never been approved by the Ministry of Forestry.57 In
addition, as of 2010 about 89.2 percent of the land classified as Forest Estate by the Ministry of
Forestry had not yet been “designated” following the full process of delineation described in the
law.58 A Supreme Court Decision in July 2012 brings into question the legal status of these areas
but the implications of this decision remain unclear. 59
55
For the 12,000 hectare pilot project area, cost estimates for technical assistance and boundary delineation were $26,000 and
$208,000, respectively. This does not include over $50,000 costs for facilitating workshops as a precursor to a negotiation
process with the communities in the area.
56
Many maps are created, including district level, province level, and island level, all of which in theory are approved at a
national level including by the Ministry of Forestry. In theory these maps should be completed and harmonized as per the
spatial planning law 26 of 2007. For a legal history see Appendix B. In practice, this has been much harder to achieve and
inconsistencies continue between maps, leading to confusion regarding who has jurisdiction over which areas. Since the
enactment of the spatial planning laws in 2007 only 8 out of 33 provincial spatial plans and 19 out of 398 district spatial plans
have been passed by law.
57
58
Will add reference here.
See National Forestry Plan p. 8. Accessible at <http://www.dephut.go.id/files/DitRenHut_RKTN_2011.pdf> and Appendix B
for details on forest designation process.
59
See Daemeter report for more information. Accessible at < http://www.daemeter.org/wpcontent/files/Policy_Brief_Constitutional_Court_Decision_No_45_PUUIX_2011.pdf>. The “MK Court decision” in 2012 resulted
in Supreme Court decision that forest estate has to be “designated” and not simply “appointed” –but it is unclear what the
implications of this are in practice.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
п‚·
Lack of publicly available, easily accessible data on legal classifications, permits, and rights.
Without publicly available, easily accessible data on legal classifications, permits, and rights,
companies and individuals are at a disadvantage when making planning decisions, and there are
many opportunities for government officials to profit by selectively sharing information. Many
spatial planning maps have been created at the district, province, island, and national level,
which have not been made publicly available. While the Ministry of Forestry has made both
legal classification and permit data available on a public website, these maps are sometimes
difficult to access and are often inconsistent with provincial and district maps of permits. 60 None
of the maps provide information on local or customary claims to land.
п‚·
Convoluted, constantly changing procedures and missing implementing instructions.
Convoluted procedures with many different bureaucratic steps involved, often with undefined
criteria for giving or withholding approval, provide many rent-seeking opportunities.61 This is
particularly problematic when combined with ongoing jurisdictional political wrangling at
multiple levels of government. Constant changes to procedures through amendments
contribute to ongoing confusion and lack of long term legal certainty.62 Meanwhile, some
procedures lack any implementing instructions.63
п‚·
Inconsistent treatment of customary land rights and lack of mechanisms for resolving land
disputes. Ongoing costly social conflicts resulting from a lack of mechanisms to recognize
customary land rights and resolve land use claims continue to plague the palm oil industry.64
There remains a lack of clarity regarding jurisdictions and land rights, and different laws treat
traditional land rights in contradictory ways (e.g. BAL v Forestry 1999).65 In general, Indonesian
laws concentrate control over land, water and natural resources in the state.66
п‚·
Little or no information on successful legal precedents. With the exception of the “forest
release mechanism,” most of the methods identified in the review have not been widely
60
http://appgis.dephut.go.id/appgis/
or that have implementing instructions that are vague and highly dependent on individual politician decisions without clear
criteria and therefore potential for arbitrary decisions (e.g. get a letter of recommendation from regent)
62
Amendments to forest exchange mechanism in 2012 to allow fast track for areas which have permits that were issued before
Spatial Planning Law of 2007 which are inconsistent with Ministry of Forestry classifications under 1999 law. However much
confusion remains and rapidly changing amendments, policies, etc are hard to follow.
63
For example, Government Regulation 2010 has a whole option that is not described in detail by ministerial decree.
64
See Sawit Watch statistics on land disputes.
65
See Marcus Colchester et al, Promised Land: Palm Oil and Land Acquisition in Indonesia: Implications for Local Communities
and Indigenous Peoples (Moreton-in-Marsh, England and Bogor, Indonesia: Forest Peoples Programme and Sawit Watch, 2006).
66
There are laws that acknowledge private property rights and customary rights to land, however, these rights come after
“public and state interest” (kepentingan umum dan Negara) in which it is the state that is given the authority to determine
what constitutes public and state interest. For more information about hierarchy of laws, traditional rights issues etc. see
Appendix A.
61
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
implemented.67 There are a few documented “success” stories of legal classification changes
following many of the procedures which are available to the public. Of the legal precedents that
do exist, many are small scale or seem to be special cases whose outcomes were highly
dependent on local political will and/or civil society support.68
Challenge 3: Consistency with goals to avoid forest loss and social conflicts
In general, the methods for changing legal classifications identified have not been specifically designed
to support efforts to maintain high conservation value forest areas and respect local rights and
interests.69 As a result, diligently following existing legal procedures can fail to contribute to or even
detract from the implementation of best management practices regarding high conservation value
conservation and avoiding social conflicts.
Existing procedures for determining land use classifications within the forest estate do not include
important biophysical characteristics such as current land cover and depth of peat soils. Therefore, there
is no legal mechanism for ensuring that these factors are taken into account when allocating land use
options relevant to achieving goals regarding reducing greenhouse gas emissions from deforestation or
maintaining biodiversity conservation.
Likewise, land use classification procedures land do not adequately address the involvement of local
communities and do not allow communities or individuals to initiate the process. While some
procedures mention either compensation to communities or require public participation, these are
usually vague in the law and often ignored in practice. When communities are not involved in decisions
regarding legal classifications, and are subsequently not involved in decisions regarding issuing permits,
costly ongoing social conflicts are likely to plague the resulting palm oil projects. Although some of these
problems can be avoided when companies follow their own due diligence procedures, the lack of legal
clarity regarding local rights is a fundamental challenge facing companies intent on following the
principle of free prior and informed consent.
As long as these environmental and social factors are not addressed in legal classification &
reclassification procedures, companies will continue to receive permits in areas that are likely to be
inconsistent with the goal of achieving more sustainable palm oil production that is not associated with
forest loss and social conflicts
67
The official data on Forest Estate Release are published and easily accessible. See <
http://www.dephut.go.id/index.php?q=id/node/7604> and <
http://www.dephut.go.id/files/Statistik%202011Ditjen%20Planologi%20Kehutanan.pdf>.
68
Will add an example.
69
There are no specific references to “High Conservation Values” or “free,prior, and informed consent” in existing
Indonesian law.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
Recommendations
While recognizing that fully addressing the challenges identified above will require broader policy and
legal reforms related to spatial planning and land use permitting, companies and policy-makers can take
immediate positive steps regarding legal classification challenges to more sustainable implementation of
palm oil projects. Based on the analysis in this brief, WRI recommends the following actions:
Recommendations for palm oil companies:
п‚·
п‚·
п‚·
Understand legal reclassification procedure options and share implementation experience. By
implementing relevant options and documenting and sharing experiences, companies can help
provide positive legal precedents and pave the way for replication. Likewise, challenges and
unsuccessful attempts to pursue reclassification can provide insights regarding potential need
for procedural reforms.
Go beyond legal compliance and follow best practices. This legal analysis demonstrates that
following legal procedures to the letter does not necessarily guarantee—and may sometimes
detract from—achieving environmental goals such as maintaining high conservation values or
avoiding social conflicts. Therefore, companies should take steps to assess risks that are not
required in the law. To do this, companies should seek additional guidance from initiatives such
as the RSPO and the ISPO as well as research institutions such as WRI.70
Engage with initiatives like the RSPO and the ISPO to support improved land use classification
policies. Multi-stakeholder initiatives provide opportunities for companies to share and learn
best practices as well as to contribute to efforts to influence government policies in ways that
are consistent with these best practices.
Recommendations for Indonesian policy-makers:
п‚·
п‚·
When designing “land swap” policies clarify objectives and definitions, address existing laws
and regulations, and simplify procedures. Since the term “land swap” has been used in
different ways to refer variously to changing legal classifications, changing permits, or changing
both, new policies using this term will need to employ clear definitions, which should be
consistent with policy objectives. In addition, to avoid creating further confusion, the design of
new policies should take into account existing laws and regulations such as those described in
this paper, and consider the need to have simple, timely and coherent procedures.
Consider redesigning legal classification and reclassification procedures to incorporate
appropriate biophysical and social factors relevant to maintaining high conservation values
and avoiding social conflicts. In order to ensure that new policies are consistent with the
Indonesian government’s stated goals related to reducing greenhouse gas emissions, conserving
biodiversity, and poverty reduction, the redesign of legal classification & reclassification
procedures should prioritize ensuring that relevant biophysical factors such as land cover and
70
WRI’s online applications are examples of available tools to help assess such risks. The Suitability Mapper available online at <
http://www.wri.org/applications/maps/suitability-mapper/> and Forest Cover Analyzer at <
http://www.wri.org/applications/maps/forest-cover-analyzer/ >.
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BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
п‚·
peat and social factors such as current land uses and claims are incorporated into legal
procedures.
Make data and procedural information publicly available and easily accessible. Publicly
available and easily accessible data on biophysical factors such as land cover and peat as well as
legal factors such as classifications, permits, and rights can help companies, government
officials, and communities make better decisions about more sustainable palm oil production.
Government initiatives such as OneMap have already started to make progress and should be
strengthened. In addition to providing maps, Indonesian policy-makers can provide more
accessible information about procedures. For example, regular public updates can be provided
about the spatial planning processes and legal status of each of the spatial planning maps
created at the district, provincial, island, and national levels. Information about status of legal
classification procedures should also be made readily available when requested using the
Freedom of Information Act.
By taking these actions, companies and policy-makers can substantially contribute to achieving clearer
legal reclassification procedures to support sustainable palm oil in Indonesia.
Page 24 of 24
BACP Grant 008 Deliverable 11 - Submitted December 7, 2012
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