The value of Papua’s rainforest – 41p a hectare

The value of Papua’s rainforest – 41p a hectare

Local tribe lose out on the value of their lands (photo credit: EIA/Tom Johnson)

Local tribe lose out on the value of their lands (photo credit: EIA/Tom Johnson)

A new report has just been published by the Environmental Investigation Agency (EIA) and their Indonesia partner Telapak makes dismal reading as palm oil companies rip off the tribal people of Papua.

In one instance highlighted in the report – Clear-Cut Exploitationa major palm oil company that is backed with funding by Norway’s sovereign fund paid just US$923 for 14.2 sq km of forest lands or the equivalent of 41 pence a hectare for land rental. [pullquote]Papuans, some of the poorest citizens in Indonesia, are being utterly exploited in legally questionable oil palm land deals that provide huge financial opportunities for international investors at the expense of the people and forests of West Papua.[/pullquote]

Local tribes paid 41p a hectare for their forests.

A copy of the contract for the rental of the land from the Moi tribe clan to PT Henrison Inti Persada (PT HIP) was put forward as evidence for the land grabbing taking place in parts of Indonesia.

After PT HIP leased the land from local leaders in 2009 Hong Kong-based commodities conglomerate Noble Group bought a majority stake in PT HIP and valued the land lease value at $5000 a hectare or over £3,160 a hectare – substantially more than the pittance of 41p a hectare paid to local tribes.

Norway invests heavily in the Noble Group with funds from the Norway Government Pension Fund Global being just one of international shareholders. 

Local tribal leaders intimidated to sign land deals.

The investigation into the land deal revealed that the local tribal elders signed the contracts following sustained pressure from company people, local government officials and there were even claims of intimidation by local military and police.

In addition to the 41p a hectare the local tribes were promised houses, infrastructure and free education none of which has materialised in the form envisaged. The free education for children on offer is very limited and has substantial conditions attached virtually consigning students to indentured labour.

The cost of 3 years free education – 7 years labour.

For instance children of high school age who were selected to go to college would receive three years education and accommodation and in return they would have to work for PT HIP for seven years as repayment. Only an average of 5 students a year have been though college on the free education scheme.

The land rental agreement is proposed to last for between 25 and 35 years with the option for the palm oil  company to extend.

Local tribes fail to receive suitable payments for timber.

But it not just on the land rental agreements that the local indigenous people are being ripped off over. As the forests are cleared to make way for the palm oil plantations the local people are losing out on the value of the timber created.

The reports states that local people are receiving the equivalent of £15 per cubic metre of timber even for the most valuable species such as merbau. The company can sell merbau on the open market for as much as £550 a cubic metre.

EIA/Telapak research further highlights a history of legal irregularities in the plantation’s development and in timber harvesting – crimes never punished by Government officials tasked with safeguarding West Papua’s forests and people. Violations include forest clearance and timber use before permits being issued, and failure to develop smallholder estates in line with legal requirements. 

Jago Wadley, EIA Senior Forest Campaigner said: “Papuans, some of the poorest citizens in Indonesia, are being utterly exploited in legally questionable oil palm land deals that provide huge financial opportunities for international investors at the expense of the people and forests of West Papua.” 

Norway’s green credentials under pressure.

At the launch of the report concerns were raised over the role of Norway and its sovereign fund investments in the Noble Group ($47 million in 2010) . Norway has been heavily involved in the protection of rainforests in Indonesia through the REDD+ programme. With government investment involved in the exploitation of local tribal people there is the claim of it sending mixed messages.

EIA and Telapak argue that such contradictions highlight how, if left unreformed, investment and commodity markets will continue to destroy forests and undermine local communities in spite of efforts to reduce emissions from deforestation.

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,” said Telapak Forests Campaigner Abu Meridian. 

Local tribes should receive suitable rewards for their resources.

Clearly if Indonesia is to develop then lands need to be released for timber and plantations but it must not be at the cost of exploiting local tribes. There is room enough in the profits for all parties to get a fair share of the resource.

External sites:

EIA: Clear Cut Exploitation.

 

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