Contested territorialization and biophysical expansion of oil palm plantations in Indonesia

1

Contested Territorialization and Biophysical Expansion

of Oil Palm Plantations in Indonesia

Alina Brada*, Anke Schaffartzikb, Melanie Pichlera, Christina Planka

a Department of Political Science, University of Vienna, Universitätsstraße 7, A-1010 Vienna, Austria

b Institute of Social Ecology (SEC), Alpen-Adria University Klagenfurt-Graz-Wien, Schottenfeldgasse 29, A-1070 Vienna, Austria

*Corresponding author: Alina Brad, Department of Political Science, University of Vienna, Universitätsstraße 7, A-1010 Vienna, Austria;

[email protected], Tel. +43 650 5053386

Preprint. Published as: Brad, A., Schaffartzik, A., Pichler, M., Plank, C. 2015. Contested

territorialization and biophysical expansion of oil palm plantations in Indonesia. Geoforum 64, 100-

111. doi:10.1016/j.geoforum.2015.06.007

Abstract

Palm oil is used in human nutrition and industrial products including cosmetics and biodiesel.

Exponential growth in oil palm land and palm oil production in Indonesia currently make the country

the world’s largest producer of this vegetable oil. The expansion of oil palm plantations is linked to

processes of territorialization and reterritorialization from the 1960s until today. Under the so-called

New Order of Suharto from 1966 onwards, territorialization processes were geared towards achieving

centralization. Oil palm plantations were instrumental in exercising this central control over the Outer

Islands and simultaneously provided an important export commodity for the opening of the Indonesian

economy. In the wake of the 1997/98 Asian economic crisis and with the end of Suharto’s rule, Indonesia

entered a period of reform marked by decentralization and related reterritorialization processes. Oil palm

plantations continued to grow as foreign investment and plantation ownership by private businesses

became increasingly relevant. Based on the size and composition of Indonesian material use, the

argument can be made that territorialization and reterritorialization processes played a decisive role in

establishing and upholding extractivism as a development pathway. The specific forms of

(re)territorialization in the expansion of plantation agriculture in Indonesia, however, are contested and

associated with competing claims for alternative forms of territorialization.

Keywords

Indonesia, palm oil, territorialization, material flow accounting, extractivism, land conflicts

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1. Introduction

Palm oil, made from the mesocarp of the palm fruit, plays an increasingly important role in human

nutrition both in terms of its direct use and as an ingredient in processed foods. Between 1962 and 2012,

global palm oil consumption increased by a factor of 7 from 0.3 to 2.2 kilograms per person and year

(kg/cap/a); only for soybean oil is consumption in human nutrition higher (FAO, 2014). However, palm

oil is not used for food alone: While, in 1962, approximately one quarter of global palm oil production

was used for non-food industrial purposes, this share increased to over 50% by 2009, corresponding to

a higher amount than for any other vegetable oil (FAO, 2014).1 Vegetable oils are the most important

feedstock for biodiesel production and in 2013, approximately 10% of global vegetable oil production

was used for biofuels (OECD and FAO, 2014). The majority of this vegetable oil stems from rapeseed

and, to a lesser degree, sunflower seed; palm oil only makes up a small share globally but is an important

biofuel feedstock in Southeast Asia (Zhou and Thomson, 2009). At the same time, with comparatively

high yields per hectare, palm oil output is expected to continue to grow, most notably in the major

producers and exporters Indonesia and Malaysia as well as in some Latin American and African

countries (OECD and FAO, 2014).

Between 1962 and 2012, global oil palm land expanded by approximately 13 million hectares

(Megahectares: Mha), making oil palm plantations the fastest growing monoculture in the world

(Gerber, 2011). Almost half of this growth (6 Mha) occurred in Indonesia which produced 47% of global

palm oil output in 2012 (FAO, 2014). While Indonesia’s history of palm oil production dates back to

the early 20th century when large plantations were first established in Sumatra (Hartley, 1977), the

growth of palm oil production in the latter half of the 20th and the early 21st century was unprecedented.

By 2011, oil palm fruit accounted for 35% of the country’s total agricultural harvest in units of mass. In

the two decades between 1991 and 2011 alone, oil palm plantations expanded from an area

corresponding to less than 0.5% to more than 3% of Indonesia’s land area (FAO, 2014).

This oil palm expansion constitutes a risk to ecosystems and biodiversity (Fitzherbert et al., 2008; Koh

and Wilcove, 2008) and has a significant impact on climate change through associated deforestation and

drainage of peat lands (Fargione et al., 2008; Germer and Sauerborn, 2008; Hooijer et al., 2006;

Reijnders and Huijbregts, 2008). The magnitude and speed at which these changes occurred have lead

to social conflict and the dispossession of people from their livelihood resources. This link has been

observed for the expansion of oil palm plantations in Indonesia (Colchester et al., 2006; Colchester and

Chao, 2013; Larsen et al., 2014; Marti, 2008) and in other countries (e.g., Cramb and Sujang, 2011;

Mingorría et al., 2014), as well as more generally for the growth of industrial tree plantations in the

global South (Gerber, 2011).

Along with the physical expansion of oil palm plantations, Indonesia faced deep shifts in the economic

and political organization of society, from a military coup in 1965 and the subsequent centralization and

authoritarian rule of President Suharto under the “New Order” regime (orde baru, 1966-1998) to the

1 The largest non-food uses of palm oil are in cosmetics (soap) and as a feedstock for biodiesel production.

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decentralization process during the reform period (reformasi) following the 1997/98 Asian crisis and

the fall of Suharto in 1998. For this article, the specific patterns of land control under both regimes were

investigated and related to the biophysical expansion of oil palm plantations. Following political ecology

research on the importance of land control for agricultural expansion and state power (Hall et al. 2011;

Peluso and Lund, 2011; Vandergeest, 1996; Vandergeest and Peluso, 1995), the expansion of oil palm

plantations in Indonesia is linked to processes of territorialization and reterritorialization. By examining

the interlocked yet distinct processes of land control during two specific periods in time,

(re)territorialization is identified as an important strategy in securing control over plantation land and in

enabling the continuous expansion of oil palm plantations. The (re)territorialization processes since

Indonesian independence in 1945 are linked to scalar reconfigurations of centralized to decentralized

land control and to the establishment and continuation of an extractive regime (Gellert, 2010). The

concepts of territorialization, and reterritorialization are presented in Section 2. The contribution of oil

palm plantations to the extractive regime is analyzed on the basis of quantitative material flow and land

use data and qualitative data from literature and interviews as described in Section 3. Results on

territorialization and reterritorialization processes are presented in Section 4 and their contested nature

is discussed based on four claims for alternative territorialization in Section 5.

2. Territorialization and Reterritorialization

In capitalist societies, the specific relationship between society and land-based resources is geared

towards the accumulation of capital (Smith, 1984). The valorization of nature, i.e., the incorporation of

non-capitalist areas into the capitalist mode of production, is a precondition for the control of land and

the subsequent accumulation process (Altvater, 1993; Görg, 2004). Marx (1867/1990) referred to this

development as primitive accumulation (Ursprüngliche Akkumulation), describing “the historical

process of divorcing the producer from the means of production” (p. 875) in the course of the transition

from feudalism to capitalism. In analyzing contemporary politics, Harvey (2005) conceptualizes this

process as “accumulation by dispossession”. The enclosure and subsequent control of land for

accumulation purposes, however, does not ‘happen’, but is mediated by institutional arrangements, legal

processes, and state regulations. Against this background, several authors have analyzed

territorialization as an important means of state control over land (Peluso and Lund, 2011; Vandergeest

and Peluso, 1995). Vandergeest (1996) defines territorialization as a “process by which states attempt

to control people and their actions by drawing boundaries around a geographic space, excluding some

categories of individuals from this space, and proscribing or prescribing specific activities within these

boundaries” (p. 159). Territorialization comprises the creation and mapping of boundaries, the allocation

of rights to private or state actors and the designation of intended resource use (Vandergeest and Peluso,

1995).

The literature on territorialization has mainly focused on postcolonial states and the role of

territorialization for the constitution and consolidation of a modern and centralized nation state (Peluso

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and Vandergeest, 1995; Peluso, 1992). Since the end of the twentieth century, globalization processes

have fostered interest in the ongoing reterritorialization of state power to both sub- and supranational

scales (Brenner, 1998; Corson, 2011; Peluso, 2005; Peluso and Lund, 2011; Sassen, 2005). As such,

“contemporary reconfigurations of […] state territorial organization are best conceived as contradictory,

contested strategies of reterritorialization through which the place-based and territorial preconditions for

accelerated global capital circulation are being constructed on multiple spatial scales” (Brenner, 1998,

p. 3). Hence, reterritorialization processes foster territorialization to enable the continuous accumulation

of capital and are closely related to enclosure and dispossession processes: “Reterritorialization and re-

scaling of nationally organized configurations of state power has proved to be a major strategy for

securing […] territorialization” (Brenner, 1999, p. 67). In Indonesia, these dynamics of

reterritorialization are exemplified by increasing orientation towards the world market and a rescaling

of territorial organization and forms of governance in the course of the decentralization process. In spite

of globalization, decentralization, and privatization, state regulations and institutional arrangements

remain essential for reterritorialization and agricultural expansion. Reterritorialization processes,

however, are not confined to state control over land: They may also generate alternative claims to

territory and next to actors at the state level, the proponents of such claims may be non-state actors. This

contestation of territorialization and reterritorialization has been analyzed as counter-territorialization

(Holmes, 2014) or counter-exclusion (Hall et al., 2011). In seeking an alternative form of

territorialization, different groups of actors make competing claims on territories which may promote or

challenge the continued expansion of oil palm plantations. These claims can be distinguished by the

arguments with which they are legitimized and by the extent to which they mobilize state and

institutional resources: “By making and enforcing boundaries [...] different socio-political institutions

invoke a territorial dimension to their claim of authority [...] whereby even institutions that are not the

state or do not represent formal government claim this particular attribute of governance” (Sikor and

Lund, 2009, p. 14). Examples for these types of territorialization claims include the enclosure of land

for conservation purposes or the reclaiming of customary lands by indigenous groups.

Intensified globalization can be considered a manifestation of reterritorialization although it is not a

precondition for the latter. The type of spatial disconnect between production and consumption which

globalization fosters was initially described for the relationship between cities and their so-called

Hinterland by Marx and is often referred to as a metabolic rift (Foster, 1999). The extraction of raw

materials for export is a special type of spatial disconnect between production and consumption, subject

to reterritorialization processes, and has been described as (neo-)extractivism (Burchardt and Dietz,

2014; Gudynas, 2010; Svampa, 2012).2 The expansion of oil palm plantations coincides with this type

of development model which is essentially based on the extraction of raw materials (for example through

2 Whereas extractivism refers to a development model focused on the extraction of and dependence on raw

materials for export under neoliberal conditions, neoextractivism highlights a partial shift away from neoliberal

policies through selective re-nationalization of the extractive sectors and a redistribution of resource revenues in

form of social and poverty reduction programs, especially in Latin America (Gudynas, 2010).

5

monoculture agriculture) for the world market. Ever since the European colonial expansion in the 15th

century, the extraction of natural resources has been a key strategy of colonial and postcolonial

development in the global South.3 Along with independence struggles and national integration, selective

industrialization and/or agricultural intensification were fostered in many countries – especially in Latin

America and Southeast Asia. In recent years, however, financial crises and subsequent neoliberal

restructuring policies have led to a renewed focus on the extraction of raw materials in combination with

an export orientation for primary commodities. This development is supported by increasing or

continuous high demand for resources in both the global North and the emerging and newly

industrializing economies (Brand and Wissen, 2012; Giljum et al., 2014; Schaffartzik et al., 2014) and

the financialization of nature (White et al., 2012). For biotic resources, growing demand for biofuels

and (changing) dietary patterns in many parts of the world (Kastner et al., 2012) additionally promote

the extractive regime.

3. Material and Methods

While territorialization and reterritorialization are politico-economic processes, the expansion of

plantations, the growth of palm oil production, and the extraction of raw materials for export require an

analysis of Indonesia’s biophysical parameters. Linking the analysis of politico-economic and

biophysical processes is necessary in analyzing the establishment of an extractivist development model

and the contested yet continuous expansion of oil palm plantations along with the state and legal

regulations that enabled it.

In order to trace Indonesia’s biophysical development, material flow accounting (MFA) data were used.

MFA encompasses a set of standardized methods for the collection and estimation of data on the social

metabolism of a country, i.e., on the material extraction and the imports and exports in biophysical terms

(Fischer-Kowalski et al., 2011; Weisz et al., 2007). Data on Indonesia’s social metabolism were

extracted from a global database covering material flows of 177 countries and 65 material categories

between 1950 and 2010 in 10-year intervals (Schaffartzik et al., 2014). This database was used because

of the high level of detail and the long time period (covering both the New Order and the reform period)

that it covers. Material flow data on Indonesia covering shorter periods of time (from 1970 or 1980

onwards) have been published by the Sustainable Europe Research Institute (Giljum et al., 2014; SERI,

2013) and by the Commonwealth Scientific and Industrial Research Organisation (CSIRO and UNEP,

2014). The three databases provide highly comparable data on the extraction of materials in Indonesia,

especially for biomass and fossil energy carriers which are especially relevant to the research presented

here. The results on import and export flows differ somewhat but within an acceptable margin. A

3 Historically, extractive regimes also existed in the countries of the global North but were either replaced by a

regime focused on the production of highly processed goods and services or were altered (e.g., in Canada and

Australia) by high-wage extractive sectors so that in both cases higher shares of value added were obtained by

the formerly extractive economies.

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detailed description of the methods used in the compilation of the database used and results of the cross-

check with the other two databases are provided in the supplementary material. Additional data on oil

palm land use, harvest of palm fruit, and on trade and consumption of palm oil were extracted from the

UN Food and Agricultural Organization’s statistical database FAOSTAT (FAO, 2014). These data were

compared to those reported by the national statistical office of Indonesia (Badan Pusat Statistik, 2013).

The analysis of the processes of territorialization and reterritorialization in the expansion of oil palm

plantations is based on a qualitative review of secondary literature, legal regulations and other state

documents, as well as grey literature. Furthermore, semi-structured interviews4 were conducted with

representatives of national and local government, non-governmental organizations (NGOs), and social

movements, scientific organizations, and local communities (community leaders, peasants) based in

Jakarta, Bogor, Jambi, and West Kalimantan between 2011 and 2013.

4. Territorialization and Reterritorialization in the Expansion of Oil Palm Plantations in

Indonesia

Between 1965 and 2012, the production of palm oil and the area harvested for oil palm fruit in Indonesia

grew exponentially (Figure 1). Under New Order, Indonesian palm oil production increased by an order

of magnitude from 0.17 million tons5 (Megatons) per year (Mt/a) in 1967 to 5.39 Mt/a in 1997. In the

reformasi period following the 1997/98 Asian financial crisis and the fall of Suharto in 1998, production

grew by more than 18 Mt to approximately 24 Mt/a in 2012.

4 In general, information regarding date and place of the interview as well as affiliation of the interviewee are

indicated. To respect the request for anonymity of some of the interviewee, some quotes consciously omit

indicating their affiliation. 5 Throughout this article, “tons” refers to metric tons, i.e., 1 ton = 1000 kg.

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Figure 1: Development of palm oil production in million tons (Megatons) per year (Mt/a) and of area harvested

for oil palm in million hectares (Megahectares) per year (Mha/a) in Indonesia between 1965 and 2012; source

of data: FAO, 2014

In the following, territorialization since the 1960s and reterritorialization processes since the turn of the

millennium are analyzed with a focus on institutional and legislative configurations of the state. These

processes are linked to political-institutional shifts towards greater centralization under Suharto’s New

Order regime between 1966 and 1998 (Section 4.1.) and towards decentralization and world market

integration following the Asian economic crisis in 1997/98 (Section 4.2.). This periodization of the

analysis simultaneously allows for the emphasis of the differences and the similarities in the means

employed and the outcomes obtained during a phase marked by centralization and one marked by

decentralization. The increased opening of the Indonesian economy and a rescaling of state power in the

course of the fall of Suharto’s authoritarian regime in 1998 and the following transition toward liberal

democracy led to major reterritorialization processes which fostered extractivist development and palm

oil expansion. In spite of some very distinct characteristics which mark each of the two periods, their

periodization also shows similarities in the patterns of land control across both periods. Even during

reformasi, for instance, centralized territorial control remained essential even though reterritorialization

processes were driven by new political-institutional configurations and by different actors and were

subject to distinct competing claims.

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4.1 Territorialization and Centralization during New Order

Control over land played an important role during the Indonesian independence struggle ending Dutch

colonialism in 1945 and during the early years of independence (Lane, 2008).6 Based on the ideological

vision of “Indonesian socialism”, the first President of the independent nation, Sukarno, demanded the

nationalization of colonial plantations and the redistribution of land. In 1960, this vision culminated in

the adoption of the Basic Agrarian Law (BAL) which had enduring effects on territorialization in the

newly created nation. Under the BAL, a land reform policy and redistribution program were initiated by

nationalizing land held by individuals or foreign companies and distributing it to landless peasants and

families (Republik Indonesia, 1960a). With regard to land tenure and ownership, customary rights (adat)

were introduced as the legal basis of agrarian law (Republik Indonesia, 1960a, Article 5). Although

excessive land ownership was prohibited,7 the BAL allowed for the continuation and subsequent

expansion of plantation agriculture through the introduction of a right to exploitation (HGU – Hak Guna

Usaha). Companies exceeding the maximum land area were required to apply for a HGU which could

then be granted for up to 60 years (Republik Indonesia, 1960a, Article 29).

In 1965, Sukarno’s “Guided Democracy” was brought to an end by a bloody military coup and replaced

by the New Order regime of General Suharto. Between 1965 and 1966, an estimated 500 000 members

and alleged sympathizers of the Indonesian Communist Party (PKI – Partai Komunist Indonesia) and

related peasant organizations (e.g., the Indonesian Peasant Front) were killed. Suharto’s administration

banned all radical peasant movements, stopped the land reform program, and initiated a process of

territorialization to enable capitalist agricultural expansion and to integrate the Indonesian economy into

global capitalism (Farid, 2005; Peluso et al., 2008). In 1967, Suharto issued the Basic Forestry Law

(BFL) as a means of state control over the Outer Islands’ forests. The BFL declared over 70% of the

land area of Indonesia as “state forest land” and transferred the control over this land to the Directorate

General of Forestry. Customary land tenure was subsumed under state forest land.8 The territorialization

of forests was implemented through the definition and enforcement of boundaries, the classification of

the forest lands for specific forms of use, and the designation of rights to resources. A series of

regulations including the BFL set the legal preconditions for the dispossession of people living on this

territory. State forest lands were divided into production forests, protection forests, nature conservation

6 Dutch colonialism in what is today Indonesia began with the Dutch “United East India Company” (Vereendigde

Oostindische Compagnie, VOC) established in 1602. After bankruptcy in 1800, all the VOC’s territories were

nationalized as the Dutch East Indies. Between 1910 and the proclamation of independence in 1945 (which the

Dutch did not accept until 1949), the Dutch colonial government controlled the entire Indonesian archipelago.

7 A government regulation restricted the maximum land area that could be managed by an individual or a family

to 5 to 20 hectares, depending on population density and land quality (Republik Indonesia, 1960b). 8 Like other postcolonial states, Indonesia inherited the dualism between proprietary and customary land from its

colonial rulers. Whereas the BAL largely avoided this legal dualism, the BFL reintroduced it by declaring all land

without property rights as s tate land. Such definitions ignore both certain groups of users (most often indigenous

peoples and their customary rights) and certain functions of existing land cover (most often ecological, e.g.,

primary forests).

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forests, and recreation forests (Barr et al., 2006), providing a basis for further zoning activities and the

expansion of both commercial logging and agriculture.

From the mid-1970s, the state additionally pushed territorialization and enclosure through the

integration of smallholders in capitalist plantation agriculture by means of contract farming. The PIR

(Perkebunan Inti Rakyat) scheme consisted of a core plantation (inti) and associated smallholder plots

(rakyat/people) of approximately two hectares per family in a core-to-smallholder ratio of about 20:80

or 30:70. The Indonesian government assisted the usually state-owned plantation company in gaining

access to land, developing infrastructure, and setting up the plantation. In return, the core plantation

provided smallholders with the management of oil palm plots and the access to national and international

markets (Zen et al., 2005). With regard to territorialization processes, the integration of smallholders

was essential as contract farming schemes allowed for the control of newly enclosed state lands through

oil palm concessions and the further inclusion of customary lands within plantation agriculture.

These territorialization processes during the early years of New Order enabled the military (in

association with state-owned plantation companies) and previous landowners to (re)seize control over

(plantation) land and expand oil palm plantation development through state- and private-owned

companies, displacing other claims to the land (Lane, 2008). Following the pattern of colonial

development, oil palm plantations were essentially confined to three provinces in Sumatra until 1980:

In 1975, North Sumatra contributed 94% of total Indonesian palm oil production, followed by Aceh

(5%) and Lampung (1%) (Kementerian Pertanian Republik Indonesia, 2013; also see Figure 3 and 4).

Although important in the respective provinces, palm oil production did not yet play a significant role

at the national level. The growth rates, however, were already an indication of changing significance:

Palm oil production grew at an average of 9% per year and oil palm land grew at 6% per year between

1965 und 1980.

This growth is all the more remarkable as it occurred during a period in time when Indonesian

industrialization was gaining momentum and use of abiotic resources such as fossil energy carriers,

metals, and construction minerals was growing more rapidly than the use of biomass from agriculture

and forestry. This phase of industrialization was associated with both a shift in the metabolic profile,

i.e., the size and composition of material use, of the country and with the enclosure and accumulation

of land. Material extraction and use were initially dominated by biomass, the share of which in domestic

extraction amounted to 80% in 1960 and then dropped consistently every decade to 31% in 2000 (see

Figure 2a). Even though the industrialization of Indonesia coincided with increasing rates of

urbanization, the rural population remained large and continued to grow so that in 1980, more than ¾ of

the Indonesian population lived in rural areas (World Bank, 2013). As the extraction of minerals (fossil

energy carriers, metals, and construction minerals as the ‘building blocks’ of industrialization) gained

greater importance, the output from agriculture and forestry continued to grow: While less than 300

Mt/a of biomass were extracted in 1960, this amount grew by more than 100 Mt/a until 1990 (see Figure

2a). The extraction of biotic as well as abiotic primary materials was economically relevant as well:

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Until 1980, almost half of GDP originated from production based on natural resources and foreign

investment was concentrated in extractive sectors such as petroleum extraction, mining, and forestry.

Simultaneously, a high level of building activity, typical for emerging economies, occurred and is

reflected in the growing construction mineral extraction (Figure 2a). The process of industrialization is

also visible in monetary terms: As more GDP was generated by petroleum extraction and mining, the

share of agriculture in GDP decreased from over 50% in 1965 to approximately 36% in 1976 (Pitt,

1980). While 46% of physical exports were of agricultural origin in 1962, this share fell to 14% by 1980

(World Bank, 2013). In Indonesia’s physical trade balance (imports minus exports, see Figure 2b), fossil

energy carriers played a dominant role throughout Suharto’s New Order: 80% of physical exports were

of fossil origin in 1980. In the context of this development, palm oil with its diverse uses both in industry

(e.g., as a lubricant) and in goods for final consumption (e.g., in food and cosmetics) and large export

market began to contribute more substantially to agricultural growth in an industrializing economy.

Agriculture was increasingly industrialized in the state-led Green Revolution which was supported and

implemented by international donors (e.g., World Bank and Asian Development Bank) and

corporations. In spite of the comparatively slow growth rates in biomass extraction, palm oil production

grew exponentially between 1965 and 1997 (see Figure 2c). Until 1980, Indonesian palm oil exports

grew proportionally to production and between 80% and 90% of production were exported. The brief

stagnation of palm oil exports in the early 1980s and the period of slower growth thereafter coincides

with a rise in domestic consumption, mainly for human nutrition, and may be attributable to the impact

of policies aimed at substituting domestic production for imports during this time period (Pitt, 1980).

This growth in palm oil production required increasingly large areas dedicated to oil palm plantations

which began to strongly expand in the 1980s (see area harvested in Figure 2c). This expansion was

enabled by continued growth in the three Sumatran provinces and by territorialization processes in the

Outer Islands (also see Figure 4) which facilitated investment by national and foreign private-owned

conglomerates there. In 1982, the government introduced a formal zoning process for the state forest

land as defined by the Basic Forestry Law (BFL, see above), classifying it into nature reserve and

tourism forest (19.2 Mha, 14% of state forest land), protection forest (29.6 Mha, 21%), limited

production forest (29.6 Mha, 21%), permanent production forest (33.4 Mha, 24%), and convertible

production forest (30 Mha, 21%) (Colchester et al. 2006; Contreras-Hermosilla and Fay, 2005). The

zoning of forest land “was created through desk studies and vegetation maps based on remote sensing

imagery and supported by a complicated biophysical scoring process which employed no social criteria”

(Conteras-Hermosilla and Fay, 2005, p. 10) and resulted in 2/3 of state forest land being declared

suitable for productive uses. This not only allowed for the establishment and successive growth of

commercial logging but facilitated the expansion of plantations into fallows, grasslands, scrub, and

secondary forests, subsumed as convertible production forest or conversion forest. Between the early

1980s and the turn of the century, some 20 Mha of state forest land were converted to non-forest land,

an important share of which was planted with or dedicated to oil palm plantations (Colchester et al.,

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2006).9 The zoning process served territorialization of forest land in the Outer Islands and was

accompanied by the extension of the contract farming scheme. From the mid-1980s on, the PIR model

was merged with the government-sponsored resettlement program (transmigrasi) to form PIR trans.

Peasants and landless people from the densely populated islands of Java and Bali were resettled to the

Outer Islands of Kalimantan, Sumatra, and Sulawesi and provided with land for oil palm development

(McCarthy et al., 2012; also see Figure 4). Like the previous contract farming scheme, PIR trans

reflected technical and political aspects of land control. It allowed for centralized territorial control of

state-owned companies (core) over all inputs, production decisions, and management functions in

strategically important resource-rich, fertile areas with low population density (Li, 2011; White, 1997).

These territorialization processes were accompanied by a gradual opening of the economy to foreign

investment and trade. Following independence, Indonesia was heavily dependent on foreign aid and

from the 1980s onwards began to seek foreign investment In 1981, foreign direct investment (FDI)

accounted for less than 0.2% of GDP and continued to rise to reach more than 2% of GDP in 1997. In

absolute terms, FDI multiplied by a factor of 42.6 between 1981 and 1997 from 126 million to 5.4 billion

constant 2005 US$ (World Bank, 2013). With the oil crises of the early 1970s, oil export revenues for

Indonesia increased: Between 1970 and 1980, the country doubled its net-exports of fossil energy

carriers (Figure 2b). Even the much more slowly growing extraction of biomass was increasingly

dedicated to export and contributed more than 10% to physical net exports in 1990 (compared to 2% in

1960). In accordance with the growth of commercial logging through territorialization of forest land,

biomass exports were dominated by timber and other forest products. Among the non-forest biomass

exports, palm oil was second to natural rubber. Data on the consumption of the rising palm oil output

during this time suggests that it additionally played an important role in meeting domestic final demand:

An annual average of more than 50% of palm oil produced in Indonesia was consumed domestically

until the late 1990s. While initially, the major part of this domestic consumption was for human

nutrition, from 1990 onwards, domestic supply for industrial uses surpassed use for food in the emerging

Indonesian economy (FAO, 2014).

The most important destinations for Indonesia’s growing palm oil exports were European: In 1986, 62%

of total palm oil exports went to the Netherlands, Germany, the United Kingdom, and Italy. By the late

1990s, the Netherlands, an important port of entry into the European market, continued to receive the

largest share of imports (22%) but was followed by the growing Asian markets of India (20%), Malaysia

(17%), and China (10%) (FAO, 2014). This changing trade pattern illustrates the impact of the economic

development in the Asian region on production in Indonesia.

9 It is important to note that this release of forest land for agricultural production is highly contested. The

Ministry of Forestry often tries to prevent the release of forest land to the National Land Agency (BPN) in order

to protect its territorial jurisdiction.

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Figure 2a: Domestic extraction in Indonesia between 1960 and 2000 in million tons (Megatons Mt) per year

(Mt/a) by material category

Source of data: Schaffartzik et al. (2014)

Figure 2b: Physical trade balance (imports minus exports) of Indonesia between 1960 and 2000 in million tons

(Megatons Mt) per year (Mt/a) by material category

Source of data: Schaffartzik et al. (2014)

13

Figure 2c: Palm oil production and exports in million tons (Megatons Mt) per year (Mt/a; primary y-axis) and

area harvested for oil palm fruit in million hectare (Megahectare Mha) per year (Mha/a; secondary y -axis) in

Indonesia 1965-1997

Source of data: FAO (2014)

Figure 2: Data Panel Indonesia 1960-1997/2000

4.2 Reterritorialization and Decentralization during Reformasi

In the wake of the 1997/98 Asian financial crisis and the fall of Suharto’s authoritarian regime in 1998,

Indonesian and international actors initiated a reform process which had profound impacts on land

control and territorialization. The rescaling of state power to both the subnational (through

decentralization) and the supranational (through opening of the economy) scale went hand-in-hand with

reterritorialization processes, corresponding to a second wave of territorialization and to the further

expansion of oil palm plantations at unprecedented growth rates. In terms of the materials which the

Indonesian economy required as it underwent reform, the process of industrialization, which had already

gained momentum during the previous period, continued. Extraction and use of materials continued to

grow and the abiotic materials required for industrialization (fossil energy carriers, metals, construction

minerals) constituted by far the largest share of these material flows: In 2010, approximately 30% of

domestic extraction was biomass, 25% each were fossil energy carriers and metals, and 20% were

construction minerals (see Figure 5a). By 2012, the value added in agriculture was down (from over

50% in the 1960s) to an amount corresponding to 14% of GDP (World Bank, 2013). Nonetheless, the

single biggest expansion of one biomass crop in the history of the country also fell into this period. The

development of Indonesian palm oil production at the turn of the century was unprecedented in its

magnitude, both in terms of contribution to global production and in terms of the area of the country

devoted to this production. Out of the 6 Mha on which oil palm plantations in Indonesia expanded

between 1962 and 2012, more than 70% or 4.3 Mha were planted during the last 14 years alone (FAO,

14

2014). Between 1998 and 2003, the growth in oil palm area exceeded growth predicted by the fitted

exponential curve (see Figure 1).

This expansion is linked to reterritorialization processes in which elements of state power were rescaled

from the national to the district level. Regional expressions of discontent, separatist movements in

resource-rich provinces (e.g., in Aceh and West Papua; see Figure 4), and the pressure of the

International Monetary Fund and the World Bank for structural adjustment reforms led to a wide-

ranging decentralization process, drafted in 1999 and implemented from 2001 onwards (McCarthy,

2004). After more than three decades of a highly centralized system of land control and territorialization,

a share of decision-making power was transferred to district governments. The foundations for

decentralization were laid out in the Law 22/1999 on Regional Governance which specified the political

and administrative responsibilities of each level of government and the Law 25/1999 on Fiscal Balance

which established a new system of fiscal benefit-sharing between central and regional governments

(Barr et al., 2006).

Due to this reterritorialization of state power, district governments gained selective power over land

control and the expansion of oil palm plantations through the right to release plantation permits (Ministry

of Agriculture, 2007, Article 17).10 While most revenues generated from palm oil production (e.g.,

export taxes) still remained with the central government, district governments sought to increase their

revenues by issuing land concession permits.11 Next to the right to stipulate land division and ownership,

the decentralization process also led to regional plantation regulations which governed such important

issues as the compensation payments for local landowners and endorsed the given form of plantation

structure. The district head (bupati) thereby became an important stakeholder in plantation development

(Gillespie, 2011). Many members of district governments were simultaneously shareholders in

agribusiness companies or land brokers and thus additionally influential in controlling access to land.12

Reterritorialization processes were accompanied by a shift in contract farming schemes. With the

beginning of the Asian financial crisis in 1997, state subsidies for oil palm plantations declined and

banks were not willing to provide credit for the inclusion of smallholders into plantation agriculture. In

order to attract private investment, the Indonesian government liberalized the plantation sector and

transformed the PIR and PIR trans schemes to so-called partnership models (pola kemitraan). Whereas

previous contract farming schemes foresaw a share of about 20:80 in favor of smallholder plots, the

government flipped the ratio to 80:20 in favor of the core plantation (McCarthy et al., 2012). Like

previous contract farming schemes, this model was essential to territorialization and the corresponding

control over land. In contrast to earlier plantation legislation, under this scheme, companies directly

negotiate with local landowners to integrate their land into a large-scale plantation concession managed

as a single plot (Republik Indonesia 2004, Article 9). Based on the amount of land contributed to the

plantation, local landowners are paid a dividend whereby the smallholders became profit-sharing

10 All further steps, e.g., the issuance of a right to exploitation (HGU), still remain with the central government. 11 Interview with Sawit Watch, Bogor, 3 December 2013; also see McCarthy et al., 2012. 12 Interview with a researcher, Bogor, 5 December 2013.

15

‘partners’ in the plantation (Li, 2011).13 In interpreting these territorialization processes, it is important

to consider that local landowners do not regain control over land after the right to exploitation (HGU)

has expired; instead, the right to the land remains with the state.14 With land conflicts and local resistance

on the rise, the partnership model helped the plantation companies gain control over customary land and

expand oil palm plantations into contested lands.15 Local leaders were promised material benefits and

on occasion received automobiles or motorbikes for their cooperation.16 As was already the case during

New Order, access to Indonesia’s natural resources was and is secured through various forms of

clientelism in which political support is obtained in exchange for material or immaterial favors in

networks for political and economic elites at the national and the local level (McCarthy 2011; Hadiz,

2004; Aspinall and van Klinken, 2011). National and local government officials have worked closely

with local elites in the development of oil palm plantations: Access to and influence over state authority

remains a determinant in the accumulation and distribution of social power. In recent years, the number

of smallholders tied to plantation companies as contract farmers increased significantly, seeing a 140%

increase between 2001 and 2013 (Badan Pusat Statistik, 2012a; Indonesian Palm Oil Board, 2008).

Figure 3: Development of share in oil palm plantation area by province in total Indonesian oil palm plantation

area in percent (%) between 1975 and 2012

Source of data: Kementerian Pertanian Republik Indonesia, 2013

Due to the competition between districts for foreign investments and national subsidies, the

13 For a discussion of the welfare implications of different smallholder and contract schemes, also see e.g., Li,

2011; McCarthy and Cramb, 2009 and Rist et al., 2010. 14 Interview with a researcher, Bogor, 5. December 2013. 15 Interview with Sawit Watch, Bogor, 3 December 2013. 16 Interview with PPSDAK (NGO for the democratic development of natural resources), Wes t-Kalimantan, 1 July 2011.

16

reterritorialization processes enabled the expansion of oil palm plantations into economically less

developed regions and districts. While in 1975, almost 90% of oil palm plantation land was located in

one province (North Sumatra), oil palm plantations expanded into other provinces and islands in

subsequent decades (see Figure 3 and 4). In 2011, the largest share of oil palm plantation area (21%)

was in Riau and while the island of Sumatra still accounted for 65% of oil palm land (compared to 100%

in 1975), Kalimantan saw a massive expansion, comprising 31% of the plantation area (Kementerian

Pertanian Republik Indonesia, 2013). The expansion of oil palm plantation area during this time

occurred mainly on forest land (see Figure 5d)17 and Kalimantan was the main location for which the

growing number of forest concessions between 2003 and 2007 was issued (Badan Pusat Statistik,

2012b).

Figure 4: Map of Indonesia with share of palm oil production by province in total Indonesian palm oil production

in 1975 and 2011

Source of outline: Wikimedia Commons, Golbez CC BY 2.5; Source of data: Kementerian Pertanian Republik

Indonesia, 2013

Besides the decentralization processes which led to a reconfiguration of state power between national

and subnational scales, reterritorialization processes were fostered through the continued export-

orientation of the Indonesian economy and its further integration into the world market. This was

especially relevant for palm oil: Until 2006, the growth in palm oil production coincided with a

corresponding growth in exports (see Figure 5c), indicating a stronger orientation towards production

17 Without resorting to satellite imagery (taken regularly, on cloud-free days), it is very difficult to precisely

measure the loss or conversion of forest. The zoning processes in Indonesia by which many different land use

types are subsumed as forest additionally adds uncertainty to the available land use and land cover data. It can

therefore be assumed that the conversion of forest land to other land uses depicted in Figure 5d constitutes an

underestimation with regard to actual losses.

17

for export compared to the previous period. As exports grew, the share of industrial domestic use of

palm oil in Indonesia dropped (FAO, 2014) and population pressure could no longer be cited to explain

the expanding palm oil production (see Blaikie and Brookfield, 1987). The orientation towards Asian

markets that began in the previous period continued and by 2011, the focus of trade for Indonesian palm

oil had shifted away from European countries:18 India (30%), China (12%), and Malaysia (9%) were, in

terms of their share in tons of palm oil, the most important destinations for exports (FAO, 2014).19 In

early 2014, the focus on export markets in Asia became very apparent when India raised its import tariff

on vegetable oil in order to protect domestic producers, forcing Indonesia to lower export tariffs in order

to protect this important market (Dutta and Supriatna, 2014). This example shows the important role of

world market integration and external factors in the reterritorialization of Indonesian palm oil

production.

Figure 5a: Domestic extraction in Indonesia between 2000 and 2010 in million tons (Megatons Mt) per year

(Mt/a) by material category

Source of data: Schaffartzik et al., 2014

18 In sum, 13% of Indonesian palm oil exports in 2011 were destined for the EU-27, making this group of countries

the second most importer although with a much lower share than in 1986 (66%) (FAO, 2014). 19 The important markets for palm oil currently still differ from the destinations of Indonesia’s overall merchandise

trade: In 2012, more than 60% of Indonesian merchandise exports (in monetary terms) went to high income

countries, followed by approximately 23% which went to developing countries in East Asia and the Pacific (World

Bank, 2013).

18

Figure 5b: Physical trade balance (imports minus exports) of Indonesia between 2000 and 2010 in million tons

(Megatons Mt) per year (Mt/a) by material category

Source of data: Schaffartzik et al., 2014

Figure 5c: Palm oil production and exports in million tons (Megatons Mt) per year (Mt/a; primary y -axis) and

area harvested for oil palm fruit in million hectare (Megahectare Mha) per year (Mha/a; secondary y -axis) in

Indonesia 1998-2012

Source of data: FAO, 2014

19

Figure 5d: Land use change in Indonesia between 1998 and 2011 in million hectare (Megahectare Mha) per

year (Mha)

Source of Data: FAO, 2014

Figure 5: Data Panel Indonesia 1998-2012

5. Contested Territorialization and Competing Claims over Territories

Territorialization during New Order and reterritorialization processes during the Indonesian reform

period were strongly tied to the expansion of oil palm plantations. These territorialization processes, i.e.,

the enclosure of land and the exclusion of actors with competing claims on these territories, foster

conflicts and struggles to reclaim access to the land in question (Hall et al., 2011, pp. 170-71). Whereas

territorialization processes were major sources of conflict since the beginning of plantation agriculture,

the political reform process following the fall of Suharto has opened some room to maneuver for

environmental and agricultural movements as well as political and economic actors to make competing

claims to territories. Several different claims have been made as to how land competition and contested

territorialization ought to be dealt with. Four different approaches to shifting current territorialization

for plantation development and (re)claiming access to (state) land form the corner stones of the

following discussion in which the legitimation and the central actors of these alternative territorialization

strategies are identified. In “seeking to counter their exclusion from land” the actors seek to “assert their

own power to exclude” (Hall et al., 2011, p. 170) in the claims they make. In attempting alternative

territorialization, they attempt to determine boundaries and prohibit specific groups of people to access

the territory.

The first claim is for the recognition of customary land rights (adat), legitimizing this claim for

alternative territorialization and exclusion of competing claims with historical inheritance. Prior to

colonial rule, the access to land in the archipelago was governed by customary land tenure. Processes of

territorialization during New Order largely ignored these customary land rights and suppressed

resistance to large-scale dispossession in the course of plantation expansion. Since the implementation

of decentralization laws and with greater political freedom, local claims over natural resources and land

have been reasserted on the basis of adat rights (Benda-Beckman and Benda-Beckman, 2009). The

Alliance of Indigenous Peoples (AMAN – Aliansi Masyarakat Adat Nusantara) which was established

20

in 1999 as a formal organization to represent masyarakat adat (indigenous people)20 serves as the most

important bearer of this claim for legal recognition of ancestral territories. Although the Indonesian

Constitution as well as the Basic Agrarian Law (BAL) basically recognize adat rights, several laws and

regulations – especially the Basic Forestry Law (BFL) and other forest policies – bypass this claim.

AMAN and other civil society organizations have lobbied extensively for a state recognition of adat

rights in practice. In 2013, a landmark Constitutional Court ruling on Case Number 35/PUU-X/2012

addressed state control over customary forest land. The Court declared that customary right forests

(kawasan hutan adat) are no longer part of state forests (kawasan hutan negara) which enables the legal

recognition of masyarakat adat as rights-bearing subjects in the forestry sector (Rachman and Siscawati,

2014). If this decision is implemented, district and central authorities as well as companies will face

competing adat claims to land which will impact the expansion of oil palm plantations on state forest

land. To guarantee and legitimize these claims, participatory mapping (Bryan, 2011; Chambers, 1994)

presents a crucial strategy for indigenous people and supporting organizations to enable alternative

territorialization. The method documents local people’s land tenure (agricultural land, hunting and

gathering area, sacred places etc.) and creates boundaries for these territories through participatory

mapping activities. This counter-mapping can allow indigenous people to emphasize their land claims

which are often not included in government maps and may overlap with private or state land.21

A second claim is that land currently concentrated in the hands of a few plantation companies should be

redistributed to peasants and landless poor. Agrarian movements such as the Indonesian Peasant Union

(SPI – Serikat Petani Indonesia) and the Consortium for Agrarian Reform (KPA – Konsorsium

Pembaruan Agraria) legitimize this claim with social justice and call for a redistribution of land to

achieve food sovereignty for peasants. The claimants refer to the BAL as a major source of legitimation

which highlights the social function of land and grants every Indonesian citizen the right to possess land

for his/her livelihood (Republik Indonesia, 1960a).22 Unlike state- and private-owned plantation

companies, peasant cooperatives are meant to have the fundamental right to control the land and

productive resources. The New Order saw a major regression and subsequent violent suppression of

agrarian movements. Since reformasi, however, the room to maneuver has widened, bringing agrarian

reform initiatives back on the agenda.23 Although the lobbying of state institutions is seen as an

important strategy of these organizations, they also actively promote land occupation and settlement

projects of landless farmers to emphasize their claim. An example for this strategy is the struggle of the

largest peasant organization in Java, the Sundanese Peasant Union (SPP – Serikat Petani Pasundan). In

2005, SPP occupied more than 15 000 hectares of state plantations and forest lands, calling for an

alternative territorialization against state plantation companies and the State Forest Corporation (SFC),

20 For more information see: http://www.aman.or.id/ 21 Interview with PPSDAK (NGO for the democratic development of natural resources), West Kalimantan, 1

July 2011. 22 Interview with KPA, Jakarta, 12 July 2011. 23 Interview with KPA, Jakarta, 12 July 2011.

21

which cover 44% of the territory in the Garut district in West Java. Along with land occupation, they

also lobbied with local and district officials and members of district and national parliaments to

redistribute land from state companies to local peasant cooperatives (Peluso et al., 2008). In many cases,

the peasants continue to cultivate this land, even returning to it after eviction, although they have no

recognized legal claim to it.24

A third claim is that land ought to be redistributed in favor of individual land titles in order to counteract

excessive state control over land. International donors like the World Bank, the United States Agency

for International Development (USAID), and relevant parts of the National Land Agency (BPN – Badan

Pertanahan Nasional) legitimate this claim for reterritorialization of state land with economic growth

and a climate conducive to investment (USAID, 2010; World Bank, 2014). A systematic and transparent

registration system with a focus on district governments is required (USAID, 2010). A major feature of

individual and registered property rights in land is the possibility to transfer land rights, allowing for the

establishment of a land market (World Bank, 2014). This claim was exemplified by the National

Agrarian Reform Program as part of the World Bank funded Land Management and Policy Development

Project which was administered by BPN and issued approximately 1 million land titles between 2004

and 2009 (Waren and Lucas 2013; USAID, 2010). Following intensive lobbying on the part of the

agrarian movement, BPN initiated the project as a comprehensive agrarian reform program, including

both the Ministry of Forestry and the Ministry of Agriculture in 2007. In the course of the negotiations,

however, the two ministries refused to participate in the redistribution process, transforming the program

into an initiative for the legalization of land titles for people already controlling state land without any

significant land redistribution (Rachman, 2011).

A fourth claim is for conservation of land and environmental protection. This claim targets the massive

deforestation associated with palm oil expansion. International organizations like Conservation

International or the World Wildlife Fund (WWF) legitimate their claim with environmental protection

efforts and call for the establishment of nature conservation reserves and wildlife corridors (Maddox et

al., 2007). The Hutan Harapan rainforest project in the district of Jambi, Sumatra, is an example for such

an alternative territorialization for the sake of environmental protection. The conservation company PT

REKI implements the project as a private conservation concession in order to promote ecosystem

restoration and gain carbon credits within the UN-led REDD+ initiative25 (Hein and Faust, 2013). Like

other territorialization processes, environmental claims assert their power to exclude competing claims

and people, often by violent means. Hence, in many places nature reserves depend on the police, the

military or private security companies to enforce boundaries and limit access. In the example mentioned,

a conflict arose between PT REKI and the peasant movement SPI. While PT REKI claims land for

conservation to protect patches of low-land rainforest, SPI members claim land for subsistence

24 Interview with a researcher, Bogor, 5 December 2013. 25 Reducing emissions from deforestation and forest degradation (REDD) is a UN program which aims to reduce

greenhouse gas emissions by assigning financial value to carbon stored in forests. REDD+ additionally considers

conservation and sustainable management objectives.

22

agriculture and livelihood purposes, referring to global environmental justice discourses.26

6. Conclusions

Since the military coup of Suharto in 1965 and the subsequent establishment of New Order, Indonesia

has undergone rapid and far-reaching political, economic, social, and environmental change. Between

1960 and 2010, the Indonesian population more than doubled, making the country the fourth most

populous country in the world. GDP (in constant 2005 US$) grew by a factor of almost 12 during the

same period of time. Throughout both territorialization and centralization processes under Suharto’s

New Order regime (1966-1998) and reterritorialization and decentralization during reformasi (from

1998 onwards), oil palm plantations and palm oil production continuously expanded. The manner in

which this expansion took place both reacted to and shaped fundamental social issues such as the access

to and the distribution of land and other resources. The growth of plantation agriculture was

simultaneously associated with strong and irreversible impacts on the Indonesian environment which in

turn constituted very relevant pressures on the global environment.

Under the authoritarian rule of President Suharto, territorialization served the centralization of state

power and of control over land: Vast expanses of forest land were appropriated as state productive land

and smallholders were integrated into state-run plantation schemes. Following the 1997/98 Asian

financial crisis and the fall of Suharto in 1998, a period of reform began which was marked by

reterritorialization processes enabling increasing decentralization of decision-making power and

increasing sub-national competition. As world market integration was accelerated, production of palm

oil, chiefly for export markets, grew at unprecedented rates. This growth was simultaneously enabled

by and necessitated the territorialization of the Outer Islands. In spite of the different politico-

administrative goals with which New Order and the reform period can be associated, the development

pathway which they upheld was remarkably similar in many regards.

While the Indonesian economy showed clear signs of a transition to an industrial pattern of material use

and intermittent attempts were made to further the development of secondary production and services,

the country continues to rely heavily on the extraction and export of primary commodities. As was

argued in this article for the expansion of oil palm plantations, this extractive pathway is largely enabled

through the state control over land and thus over access to resources. Such patterns are not only visible

in agricultural production but also in the other extractive sectors such as mining and petroleum

extraction. The exclusion of the majority of the Indonesian population from land-use decisions remains

dominant but it is also heavily contested by claims to land made by indigenous peoples, peasants and

landless poor, greater liberalization and private ownership, and nature conservation.

The expansion of palm oil production in Indonesia illustrates how closely political, institutional, and

economic are intertwined with socio-ecological developments: One cannot be fully understood without

26 Interview with SPI, Jakarta, 25 January 2012.

23

simultaneously considering the others. The Indonesian case additionally reveals that the potential for

conflict in access to land is not only recognized by NGOs and academia but also by those with economic

and political decision-making power: A number of decisions with regard to how land use is governed in

Indonesia were made in order to avoid conflict. Examples include the partially very close control over

the Outer Islands through the expansion of oil palm plantations as well as the control exercised over

peasants through contract farming schemes.

The analysis of the Indonesian palm oil expansion shows that no element must be taken for granted:

Neither the biophysical dimensions of the production nor the political and economic conditions with

which they are associated simply “happen” but must be understood within the context of the exerted

power over both nature and people which they represent.

24

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