Snow Ball of Struggle to Stop Negative Impacts of Pulp and Paper Industry in Indonesia
Disampaikan dan ditandatangani di Riau, Sumatera, 13 Januari 2007
What was mentioned with the ecology disaster from the Big Pulp Industry Development evidently was not yet responded wisely by the Indonesian Government. Several new plans from the industry to do expansion to other area in Sumatera and outside Sumatera still still accomodated with planning and still ignoring the transparency and the public’s participation towards better condition. On the other side, social reality that happened on the field did not fail to make the Central government tidy up to put the involvement of the community and due diligence for the pulp industry in the strategic importance plan. After the big case which had been written by Humans Right Watch (HRW) about the violation of humanity in Riau that fell on the traditional community Sakai for example, was not influential for efforts to speed up the policy of Fiber Woods Plantation such as Decision Letter of Forest Minister No.SK 101/Menhut-II/2004 about acceleration of Fiber Woods Plantation Development for Pulp Industry needs and SK No.32/Kpts-III/2003 about permission of forest harvest utilisation only to the nature forest or Fiber Woods Plantation through bargaining and auction that could take over ex Logging Concession area also could have permission for hundred years.
The Role of the Government in The Policy of Forestry Industry Debt
Was not doubted again post the economic crisis that struck Indonesia in the end of 1990s, made many sides fall back how fragile is our national industry including the industry in forestry sector. Monetary that heaved and the instability of economics must put the international hands like International Monetary Fund [IMF] that push the birth of National Bangking Recovery Biro [BPPN] that must overcome debts stalled from at least 128 companies which operated in forestry sector. At that time the value of assets that must be borne by BPPN revolving 21,9 trillions [3,1 billions US dolar]. Several among them approximately 176 debtors with the debt stalled about 19,78 trillions was sold to several bank and the agency of the non bank’s finance. And the sale that conducted by BPPN was by means to sell off without doing any restructuring of these debts. Apparently this sale was estimated only coulc return the debt of 20 percent of the total value which was 6 trillions.
Up to the end of its life before being replaced with the Assets Management Company (PPA) in year 2004 and managed around approximately 500 trillions was a big figure in view of the fact that some among them were The Pulp Industries. But up to the BPPN replacement that canned be heard was the unilateral news would their success and the recovery rate for 28 percent. Meaning that on the other side the government frankly was not able to return national assets that was taken by conglomerates in the form of assets and the accumulation of capiral that was produced. Compared with the level of forest damage that was in the really danger position as the impact of Pulp Industry Development. Meaning that BPPN professionalism in managed and manajerial stalled credits and banking recapitalization and this was the history where the fund that so many disappeared in a short time for the Indonesian Government.
Meaning that after showing out the achievement that did not persuade through BPPN ought to re think over in their policies in the forestry sector in the future. Debts stalled and destruction of the nature forest ought to produce the policy of the reduction in the capacity was installed by the timebr industry. Like IWGFF said that not only this will improve the total return of the debt but in parallel with the Indonesian Government ccommitment against CGI as well as helping to maintain the Indonesian forest resource and guaranteed its conservation. On the other side according to its study is was not reduces the economic potential value of the forest for 7.3 billions US dollar will vanish as the substitute of current economic value of the forest for 1.7 billion US dollar that was resulted from the forest command at this time with the consequences of the Indonesian production forest will vanish in 10 years [Simangunsong 2003]1. Something that ought to be recorded from this important study was to be estimated fro about 30 millions m3 of logs stolen each year, millions of people who lives around the forest in many places in Indonesian Provinces, their live and livelihood were threatened as the impact of illegal logging that is very destructive. Simangunsong also estimated the environment cost that must be borne by the community as a result of forest damage at this time was 609 million US dollar each year.
Damaging Role of Fiber Woods Plantation to Nature and Community Forest
In line with above very natural the assumption that the allocating of the Fiber Woods Plantation development on unproductive lands was did not benefit still current till at this time. The mechanism of the change in the function of the region by the forestry Service through Decission Letter of Forestry Minister. Old days according to the Director General’s INTAG Data up until March 1998, was recorded measuring 4.03 million ha the forest region and the area of the other use
1 page 33/study about forestry Industry restructuring handled by BPPN/IWGFF 2004.
that was changed by his function into the Production Forest, this policy that supported the Fiber Woods Plantation development to be carried out dihutan second-hand Logging Concession and virgin forest that was changed by his function into the Production Forest. The Fiber Woods Plantation development was carried out dikawasan the production forest continue to because in this scheme could be done by the system cut down was finished. Like the data along with that the realisation of Fiber Woods Plantation planting very small at least up until January 2001. From the total area around 8 million ha that was managed by 175 companies, the realisation of planting just reached 23,5 peren or 1,85 million ha. The other data showed on Fiber Woods Plantation area was still being met the region that still was productive in general as big as 22 percent of all over the region that managed by them. Imagined when it was considered be the same as with the HTI development other up to January 1999, the number of nature forests that was converted measuring 1,6 million Ha. Through to very justified was gotten by the view of many sides that Fiber Woods Plantation only took wood from Woods Use Permit (IPK).
The main problem that still accurate until now is the capacity was installed, the forest could not comply with the national and international market request that so high. The gap that was so high between the request and the provisions of the wood raw material to supply the standard requirement for the timber industry in Indonesia. Especially for the pulp industry, data from APKI 2000 named the total install capacity almost 5 million ton/year, the total capacity of the paper industry reached almost 9 million ton/year. To produce 1 ton pulp need 4,5-5m3 pulp wood then the requirement for pulp wood during 2000 around 22,5-25 million m3, now the total production of Fiber woods Plantation in year 2000 only reached 3 millions m3. Assumpt until now 90 percent of the material raw used by the Pulp mills come from nature forest. Addition with the replacement scheme of industry from Logging Concession to Fiber Woods Plantation came from the same source or forest industry company, large damage of forest in the past on behalf of Logging Concession were Company’s Strategic Network to save their assets and what more confidence were this is the way they covered their tracks in spending a lot of Country Fund and Deforestation which they’ve done. The strange thing is unnatural behaviour from these blind industries always get supported by government policies on behalf of Country Income and Revitalisation, keep producing the policies that profitting the Pulp Industry and Fiber
Box: Natural Forest and People Life Source Robed by Pulp and Paper Industry
Pulp and Paper mill first time operated in Riau in the early of 1980s which were built the PT. Indah Kiat Pulp and Paper Industry ( APP Goup) in Perawang Siak District (Which were Bengkalis District). Then it was followed by PT. Riau Andalan Pulp and Paper (APRIL GrouP) built on 1993 in Pangkalan Kerinci Pelalawan District (which was Kampar District). And then these two industries seems like in competition to increased their industry capacity, until year 2006 each capacity of those Pulp and Paper Industry has reached 2 million tons/year.
They need 18 million m3 woods every year to producing 4 million tons pulp in Riau, and 70% of these woods were taken from nature forest in Riau for years, so that pulp industry contribute large on the lost of 3,6 million hectares nature forest in Riau since 1982 -2005. Riau nature forest conversion will still continue in the future at least there will be lot of conversion permit on nature forest to supply the pulp and paper industry needs. These permits located on the forest area which has High Conservation Value or HCVF (wwf 2005) so that estimated that Riau nature forest will remain only 476.233 hectares on 2015 by destructiuon level 150.000 hectares per year.
Peat forest on Kampar Peninsula for example, on this forest area there a lot of conversion permits on nature forest which in controversial to be built fiber woods plantation even given by the District Government or Forest Minister. Beside the existing permits, APRIL is in progress proposing new permit for 215.795 thousand hectares to Forest Minister of Indonesia.
The impact of forest conversion in Riau has causing negatives effect like flood, forest, human and animal conflict, corbon released and etc. According to the grenomic and Walhi research, the lost caused by flood in 2003-2004 in Riau reached numbers 841 billion or 51% of Riau Province Annual Local Budget and flood disaster in the end of 2006 has caused lost much bigger from before, recorded there were 20.000 houses sinked in 7 district/city in Riau Province.
To guarantee sustainability of material raw, pulp and paper industry must build Fiber Woods Plantation by mastering wide land, at least until the end of 2006 APP and APRIL and their parners had mastering land in Riau for 1,8 million hectares or equal to 21% of Riau Province wide land ( 8,6 juta ha). Land dispute for such wide oftenly conduct by violence method and intimidation to the people and intend to not put any respect of local/custom community’s rights. Lot of land, community’s garden and community’s farm area taken over by c ompany to build their Fiber Woods Plantation. Dispute land practices which conduct these days had causing a lot of conflict between community and company which in the end will harming the community
Conflict between PT. RAPP (APRIL) with Villagers of Gading Permai
Villagers of Gading Permai has worked on 200 hectares land for palm oil plantation, they were collaborated with local
entrepreneur on 2003. This land located in their old village which abandoned to other teretory. Villagers called it Kampung Lama or known as Tasik Permai Village. Villagers has actively work on this land since 1960s, but because the land still forest and equipment which they had was simple so the land was unfinished. Then villagers started opening land since 2003 until 2004. and when the work in process of planting the plam oil, the conflict started and it was triggered by the claim from PT Siak Raya Timber (SRT) as Logging Concession. There are 1000 hectares of 2000 hectares which has being worked by the villagers now in control of PT RAPP (APRIL) with RKT 2005 as their reason.
PT. RAPP (APRIL) began worked on this land on 2006. PT. RAPP (APRIL) planting acacia in villager’s palm oil plantation. However, PT SRT or PT. RAPP (APRIL) never showing their proof of ownership on land to the villager. Also never confirm to local village government about Ownership Rights on this land. So when the conflict happened, they never took the village government to solve it.
The attack started from the wish of villagers to ask for dialog with PT. RAPP (APRIL). Then PT. RAPP (APRIL) promised them for deliberation, but then there were no deliberation but attack.
Conflict PT Arara Abadi with Villagers of Tasik Serai
Unexplained Boundary of land between community land and company’s becomes one of important agenda, which because of this matter, conflict always happen between these two parties. For example conflict between Villagers of Tasik Serai of Pinggir Sub District of Bengkalis District with Security of PT Arara Abadi (PT AA), this conflict was triggered by undefined boundary of community’s palm oil plantation with PT AA concession.
During this conflict, they have their agreement to hold their selves and wait for resolution for this boundary matter on each area. However this agreement was broke by company’s action which using their security to intimidate the villagers and they were also taking off the land the palm oil trees.
Anarky happened when villager angry and cannot accept the company’ security treatment to them. One man died and tens was injured.
Industry, Move from Dari Sumatera to Kalimantan
When efforts to settle debts of some conglomerates of forestry industry which not complete yet2, now the government in the middle of their struggle of revitalisation of burried Forestry Industry. One of their efforts is giving amenity for foreign and domestic infestor to paying (buying) forestry industry debts to the government bank so this industry can start to operate again. Besde it, they also give chances for infestors to build new industry in Indonesia, which Pulp and Paper Industry Sector become fascination for these infestors.
Re build or revitalisation of forestry industry of course give significantly impact to the supply of material to fulfill the industry needs. According to Department of Forestry, material needs from natural woods total needs to supply the entire forestry industry are reaching 63, 48 million m3 per year (Ditjen BPK Dephut, 2003), away above the stipulating numbers of JPT of 2005 which only 5, 4 million m3 and 10-12 million m3 for 2006. It means that efforts for revitalisation of forestry industry is not apropriate yet if re arrange (restructurisation) of forestry industry not conducted. Restructurisation in this matter is creating rational balances between industry install capacity (demand) with capability of natural forest production (supply), also preventing and eradicating the use of illegal material raw which yield from illegal logging. If this not conduct yet then revitalisation efforts of forestry industry will only increase destruction and degradation of natural forest in Indonesia.
Box: Case of PT.Kiani Kertas Berau East Kalimantan
This pulp and Paper mill was built around 1993 and it was ambicious project of forestry industry development policy in Indonesia. Infestation procedur on this industry with Corruption, Collusion and Nepotism in New Order Regime. In the beginning of this mill was being build, PT. KK accepted 410 million US$ from Indonesian Government as credit as serviced by Domestic Banks [on transition – overflowed to bank Mandiri]. For the possibility of getting country credit, Suharto released Keppres 93/96 on Desember, 10 1996. This Keppres not the only simplyness; on 1997 PT. KK with 9 other big companies enjoying their tax free for 10 years of term(tax holiday). – D & R, September, 13 1997 –
Six of seven Indonesian pulp and paper companies operate in Sumatera. And the seventh is PT. Kiani Kertas (KK) operate in East Kalimantan. Eight years ago on March, 31 1997 began their pulp, paper and medium density fiberboard
2 One of it are about claim status of PT Kiani Kertas. After JP Morgan, USA and Deutsche Bank, German, pospone the negosiation process of take over the PT Kiani Kertas stocks, Putra Sampoerna through mediator Direktur PT Danareksa said interest to buy PT Kiani stocks, by pay PT Kiani debts to Bank Mandiri for US$170 million and US$ 200 million will be given to Prabowo as the owner of PT Kiani.
P.T. Kiani Kertas had 525.000 tons of pulp capacity per year and 200.000 MDF. The mill’s complex located at the Berau River Band at Mangkajang village, Sambaliung Sub District, Berau area of East Kalimantan.
The collapse of New Order, this industry also instabil, which then taken over by Prabowo with stock composition 70%, Bob Hasan 20% and Luhut Panjaitan 10%. This condition was not last long, then UFS [Unit Fiber System ltd] from Singapore, intend to buy, acuision process which will accomplish in several months. If the proposal approved by Singapore Stock, UFS will buy all PT. Kiani Kertas aquity with numbers reach US$ 220 million or equal to Rp 2,024 trillion [US$ 1 = Rp 9.200]. This amount still added the obligation to pay Kiani’s debts which reach US$ 500 million (Rp 4,6 trillion), whether in foreign bank or local bank. But on September 2006 in Singapore, Director and CEO of UFS Sven Edstrom said that UFS has transferred US$ 4 – 5 million or Rp 46 billion to Kiani ertas. This fund will be use to pay salary of the employees on August an to buy Industrial Fuel Oil (IFO) and Industrial Diesel Oil (IDO), so the mill can operate on early October 2006. Sven said that they still interest to aquiting Kiani Kertas and ready to pay all this pulp mill’s debt to Bank Mandiri which was US$ 201 million or Rp 1,84 trillion when the transaction agreed. Intend of UFS to aquiting this pulp mill until now not change yet, but because they see situation and condition of Social Politic of pulp and paper issues in Indonesia then UFS still have a doubt.
Material for this mill yielded from Fiber Wood Plantation company, partners of Kiani kertas PT. TRH 270.000 hectares, Logging Concession PT. Sumalindo, PT. Ihutani I – II, local cooperation and Import from Malaysia – Philipina. Material supply almost more then 20% yielded from illegal logging in forest at Berau, Bulungan and surround it. This mill which 3,400 hectares wide at Mangkajang, had moved the Mangkajang people massively, then Fiber Wood Concession built by removing local community rights in 3 Sub DIstrict. Beside, violation againts local community rights in fulfilling material for industry, pollution on environment which happenned began felt by the community around Mengkajang river, Berau river and Berau coast. Other problems happened, about 700 labors until now never get their salary, because company didn’t have any money and production stag. Even though, this company still guarded by one special troops under Prabowo’s control.
Several project taps for the re-strengthening (revitalisation) the forestry industry began opened by the government. This was seen with efforts of the debt resolution of several forestry industries among them PT Kiani Kertas that will settle their debt to the Independent Bank through several investors. The other plan was the development project of the forestry industry especially the pulp industry that will be developed in South Kalimantan. This project will carry out by one group United Fibre System (UFS) that had an centre office in Singapore. This company had 3 subsidiary companies in South Kalimantan, that are PT Marga Buana Bumi Mulia (PT MBBM) for the pulp mill, PT Hutan Rindang Banua (PT HRB) for the Fiber Woods Plantation company and PT Marga Anugerah Lestari (PT the MALL) for chipmill. UFS incessant did lobby to the creditor’s international side in order to be involved in funding of this project with promoted performance and their commitment would the environment-friendly industry, developed local economics, good coorporate management and cared about the social problem.
Several international creditors, said was interested being involved in this project, although afterwards several creditors said retreated or was not involved in this project.
MIGA (Multilateral Investment Guarantee Agency) one bussiness unit group of world Bank, on the end of 2003 was interested being involved in in this project, but afterwards being guarded in 2004 MIGA removed this project from their web site. Akzo Nobel, the international company that moved in the production of chemicals, said also was not involved in this project, although they were involved intensively in monitoring the development of the UFS project since 1998. Likewise, Deustche Bank that originally gave the commitment for the UFS project, in middle December 2005 said postponed the process of discussions of the project of the funding support. In meantime, the funding agency from Austria, Adritz AG and Raiffeisen Zentralbank (RZB) made a commitment to give the funding support for the procurement of the machine for the industry chipmill PT MALL an amount more than US$ 260 million.
Must be reminded that, all parties in Indonesia that was involved in the development of good forestry industry the regional government, the centre government, the local investor, including the financial agency since the beginning must realised and considered high risks in investment in forestry sector like the availability of the raw material, the conflict tenurial, the opportunity was involved illegal logging (forest crime – money laundering), and opportune environmental damage happened. The financial agency must also be careful in the channelling of credit (investment) in large quantities in the sector of the forestry industry. The channelling of credit and the loan will in large quantities go linear with the risk of failing paid that was high if these risks were not placed as the key factor in consideration of the development of the new forestry industry
Several Fiber Woods Plantation companies and pulp that in the New Order was given incentive that was arousing because it was considered could jack up economics in forestry sector post mining stagnation, tried to experiment used the reforestation fund. Was not free from its corrupt, forestry post the Logging Concession [HPH] that was controlled by inercircle of Soeharto authority became the special strategy afterwards for the government to auction the region of ex
Logging Concession and the transfer of ownership. Logging Concession in this case left the nature wound that really terrible in the form of damage of Human and Nature Resources, Logging Concession had left tracks of the weakness of legal device in forestry sector that could not keep the rate of the excessive felling in a legal manner for the interests of export so as in restoration of the forest then the Fiber Woods Plantation was alternative arousing in the middle of international demand of pulp market for their requirement of secondary industry. Logically, the high market demand was not matched with the good intention to supplying by sustainable ways. According to several survey results, the big growth of the Fiber Woods Plantation development was because of the big financial subsidy and the right to cut down the stand trees. The world bank during 1998, the cut down could cause the degradation that was serious in one area and in this process they could get permission changed the area that has been very broken to be Fiber Woods Plantation or other plantation. The Forestry Department’s data also mentioned in 1998 more than 2,7 million Ha of Logging Concession has been converted to Fiber Woods Plantation. Not in the landscape that often sounded that Fiber Woods Plantation might and only will built on the scrub land and unproductive lands but in the land that still has the rest of large profits in the middle of permission and methamorfs companies.
On the other side there were several structural problems which still related to the Fiber Woods Plantation program, for example the fact that mentioned that in 2000 least then a quarter hectare of land which alocated for Fiber Woods Plantations had been Planted. Like below contradiction, in 1990 the regulation that mentioning Fiber Woods Plantation only given to the Permenently non-Productive Forest area and never given to the area which already become Logging Concession, but still Fiber Woods Plantation built in productive land. One of the proper study mentioned that in June 1998, 22 percent managed by Fiber Woods Plantation are the land that before the Fiber Woods Plantation was built were Productive Natural Forest3. Even some Fiber Woods Plantation conducting conversion some natural forest that still wide.4 But one thing that loose from this ambisious plan are a lot of ex Logging Concession areas still has productive natural forest resource and the government forgot that Fiber Plantation like acacia mangium and or the same species are the plants that only can be harvested in 8 years and then post plants. Becoming big question about material raw supplies for pulp mill that in period on Post New Order will begun on the end of 90s and early 2000-an.
In this reality several ambisious behaviour of companies and local government to conduct the same thing in Kalimantan will dinamic by environment elements and the very localistic community.
Case Profile of PT. Inti Indorayon Utama
(PT. Toba Pulp Lestari), North Sumatera
Business Profile
PT. Inti Indorayon Utama (IIU) which change its name to PT. Toba Pulp Lestari (TPL) located at Sosorladang, Porsea, North Sumatera, belongs to Medan business man, Sukanto Tanoto, which operated base on Collective Decision Letter (SKB) of Country Research and Technology Minister and Country Demography Minister and Life Environment Minister No. SK/681/M/BPPT/XI/1986 and No. KEP-43/MNKLH/11/ 1986 date on November 13 1986.
In running his business, Tanoto has partnership with foreign infestor, especially Norway and Finland. Pulp mill and Fiber Wood Plantation (HTI) started built since 1987 with infestation value $US 300 million, then Rayon Fiber Mill built in 1993. Total infestation include pulp mill, Rayon Fiber Mill and Fiber Wood Plantation (HTI) about $US 600 million. Foreign infestation increased since the company go public whether in form of equity, obligation or bank credit.
Indorayon is one of Raja Garuda Mas (RGM) group. Stock of some member of its group overlapping with Salim Group which owned by Lim Sioe Liong and Soeharto families, Tirtamas group owned by Hashim Djojohadikusumo and Titiek Prabowo, also Marisan Nusantara group owned by Akbar Tanjung and his family.
After Indonesia economic instabil in the middle of 1997, Sukanto Tanoto moved to Singapore, with properties amount about US$ 1,1 billion or he was in level 87 of Asian Rich man. From there he arranged his entire companies in aboad, including in Indonesia under Asia Pacific Resources International Holding Ltd (APRIL) flag, one of the biggest pulp and paper company in the world where 60% its stock owned by RGM.
PT. Indorayon is integrated industry in pulp production for paper material raw and viscose rayon fiber for textill material raw. Commercially production activity began in 1989 for pulp and 1993 for rayon. Install production capacity 240.000 ton pulp/year and 60.000 ton rayon/year. Of all production, 70% of them exported to abroad and rest of them for domestic.
This company managing Logging Concession (HPH) with wide 86.000 hectares, 269.060 hectares Fiber Wood Plantation, and other 30.000 hectares they made it to People Nucleous Plantation (PIR), total of land are
3 [Kartodihardjo dan Supriono, 2000:4/ in ”Potret Keadaan Hutan Indonesia/Forest Watc Indonesia”.]
4 Build Fiber Wood Plantation on degradated land is very expensive, it will need large of fund for land recovery. Both Fiber Wood Plantation include permit to get Wood Exploitate Permit (IPK), that means cutting over and exploiting the remaining virgin tree, that means also give wood supply in large amount to company, of course there will be large income. [Indonesian Forest conditions/FWI-Global Forest Watch. Page 42]
385.060 hectares (Suara Pembaruan, November 6 1993).
Case Profile
Since the beginning, mill with wide about 225 hectares, never stop causing controverse and problems. Controversion started from mill location which a lot of parties said its not appopriate and threating the environment, especially because it is located around density housing and quite wide farm land, at upstream of Asahan River (the only one of outlet for Danau Toba), and located in area with topography hollow/dale, which was judged by many parties not appropriate. .
That was Life Environment Minister Mr Emil Salim who first said his un agreement about location for this mill, then followed by academic, environment activist, church, and community. However, because of the support of Reserh and Technology Minister Mr. BJ Habibie and President Soeharto, this mill still built in the area with majority community of it are Batakness.
Concern to Indorayon which since the beginning has broken and crossing vary of rules will result bad impact to the environment, proved then. Many Damage tragedy to people in directly and gave large impact to the environment happen frequently, started from air and water pollution, land dispute, tradition law manipulation, illegal logging and people land destruction, landslide which took tens of life and etc.
But he most miserable is the reek until 30 km radius which come from mill every day, decrease of farm and livestock production, decrease of Asahan River quality, decrease of Lake Toba surface, road infrastructure destructions, forest and environment destruction and etc.
People conduct millitan and massive resistance against the existance of mill and all impact it produced. Started by sporadic resistance, massive resistance and socal moves which combined with vary of civil community elements like NGO, students, academic, church, Moslem scholar and other community groups.
At least there were 31 people of Tapanuli died because disaster and violation caused by Indorayon operation, hundreds of people arrested and gaoled because they opposing Indorayon for every manipulations, rights dispute, and environment pollution. It was un countable the material and immaterial lost which experienced by the community in 20 years (since 1986 until now).
The result, eventhough the resistance movement of people not succeeded in reaching their maximum demand, which is to stop Indorayon operation overall and permanently, but they succeeded to pushed the making of Decision and Policies of New Order Government about the existance of Indorayon. These policies, some of it are decisions to stop temporarily the company operation in several period and policy to stop permanently some of company’s business (Shut the rayon mill, pulp mill operated) as the response to the community resistance movement. Company’s operation stop for about 4 years (1999-2002). Indorayon conduct parcial changes in production technologies and waste management unit. The name of the company changed into PT. Toba Pulp Lestari with promises “new paradigm”. However, the struggle still continue until now!
Impact of Environment Destructions and Community Impoverishing
Development in Forest sector like pulp and paper affecting to the environment destruction and poorness in community level, and poorness will bring destruction to the environemnt. Chains of these affect, continuently cannot be separated from development side which in progress. Cases which happen in Pulp and Paper Industry sector in Indonesia are one reflection of economic social and environment. Sample case that we can see is is [Riau, North Sumatera, Palembang], in Kalimantan [Berau Kaltim and Kota Baru south Kalimantan]. Development Process of this industry also conduct many contradiction againts the custom cummunity rights on natural resources conditions and its production assets, such as: customary forest, community forest which become the source of living for their lives and their families. The lost of customary community (Local) as the cause of the expansive industry not only in material [land and forest], but their human rights violated on the social, economic and culture lives. To many victims taken in this industri progressions, many natural resources taken without obeying the social, economic, culture and environment methods. This industry become more thirsty of material raw, thirsty of land resources, plants production and this industry thirsty of capital investation that can be get by debts processes, which should paid by the Indonesian People misery. So that, this industry not only bring ecological disasters (Environment], but creating impoverishing of people in long term [see case boxes].
Conflict between Community with PT. TEL PP
(Tanjung Enim Lestari Pulp & Paper)
PT. MHP (Musi Hutan Persada-Barito Group)
PT. Tanjung Enim Lestari
PT. Tanjung Enim Lestari Pulp and Paper has built the biggest pulp and paper mill in South East Asia, with wide of the mill reach to 1.600 Hectares. Company using specialist from Associated Cost Estimating for Civil Enggineering, Australia as the consultant of this giant project. An Ambitious project with inted to reach profit as big as
possible even they have to exploiting fertile farm land and society forest of South Sumatera.
Infestation in this project reach US$ 1 Billion, or equal to 7 Trillion Rupiah, if we use rate of exchange Rp 7.000,-/Dollar, agreement result that was made by government with a world insurance firm, ECA (Export Credit Agency) who gave infestation secure guarantee facility. Infestors came from domestic and abroad they were PT. Barito Pacific Group, PT. Citra Lamtorogung, PT. Mukti Lestari Kencana, OECF Japan, Marubeni Co, Nippon Paper Industries (both come from Japan) Joint become Japan Sumatera Pulp, Morgan Glenfel Co. Sweden. Beside it, this giant project also involved syndicate vary of Banks they were, Export Development Corp (Canada), Finish Export Credit Ltd and Merita Bank Ltd (Finland), Skandinaviske Enskilda Banken (Sweden), Korea First Bank (South Korea), Fuji Bank, Bank Of Tokyo-Mitsubishi (Japan) and Bank Austria.(Data Div. Tanah LBH Palembang, 1996)
Pra Operation
Since the beginning of this paper industry built which used wide land + 1092 Hectares and located at custom land owned by six villages Banuayu, Muara Niru, Gerinam, Tebat Agung, Kuripan and Dalam, caused removing of forest and custom farm land which became pillar in fulfill community economy in those four villages. This was not free from the role of government apparatus. Local Government infact has high business instinct, by breaking their law instruments and become a land broker between community and company. Efforts of land free started in 1995. PT TEL gave money with amount of Rp 1,6 Billion which given to Muara Enim local Government, by promise that company will know all set. The farmer forced to accepted compensatory with amount Rp 5.000,-/rubber tree (price that time were Rp 11.000,-/tree), they were also forced to accepted amount of rubber trees being manipulated. At last it was revealed that Muara Enim local government asked compensatory to PT TEL and asked operational fee for about Rp 657.764.800,- through Muara Enim Regent Letter No. 593/1264/I.1/1995.(Div Tanah LBH Palembang, 1996). Beside it, Government Apparatus trhough their motto published by Governor, Regent, Subdistrict Head and Head of Countryside to the community that their land are Country Land which will be used for development and it will support the community earns.
Because of they have no traditional land, society in six villages practicely lost their economic sources. But actually majority of them are farmers, means that land is source to fulfill food needs and other life’s need (healthy, education, housing and etc).
With condition that threat the sustainable of life, community at Banuayu village, Muara Niru, Dalam, Kuripan and gerinam not hold peace. Community conduct resistence by joint themselves into organization, they were asking and demanding for the return of their land. Lot of way they did, from sending letter of accusation and claim until demonstration actions by down to the road which pointed to the company and to government institutions from district level until Nationals. However those efforts like a struggle to break an iron wall. Because the government never tried to look for solution as the answer of problem that experienced by the farmers in those six villages. Even seems like placing forward the company’s needs by using refresive ways against the acions conduct by the people of six villages. Even right now, at the company’s location, conflict between milliter apparatus and cops who have duty to guard the industry area like “Dogs guard the master’s home”.
The company it self not just ignored the community claim for the returning of their land. A lot of ways conduct by them beside intimidate the community, give promises of job and other facilities to them, company also tried to divided the community through their personnels (Apparatus of Subdistrict/village, Militer & cop and also opportunist local community) by using maney politic and tried to provocation the community in order to refusing “Peace”. Because of problems which never solved, meanwhile their needs of life more insist, at last a lot of the community get in “trap” and the community became divide. Only small group stands still and claimed for their land. Other community changed their attention to employment problems, some others choose for compensatory and some others exactly desperates because of the conflict and they choose to stay in silence.
Post Operation
This pulp and paper company started their operation in the end of December 1999 in the phase of production test.
Since this company was starting their operation, community in last 4 months (April 2000) began felt their wasre affect which trhown to Lematang River affecting to the decrease of fisherman’s earns. Usually in a day the community able to caught shrimp for 2 Kg/Rp 50.000/day, now only < 0,5 Kg/day. Fish which usually they can have for + 15 Kg/day, now only 15 Kg, now before they can harvest it, the chili decay and they only yield < 7 Kg/week. Plus most part of banana’ plant collapse easily and die, rice, beans and etc are not seed and small, rubber become watery and can yield in small amount. Other impact is air pollution which comes from industry smokestacks which reek, cause poignant to eyes, queasy and often feel like want to trhow up, water which usually clean, now in some moment its moccous and smells, like oily, black colors, thick. Some people who has activity in water caught pruntis, scabies and flacking skins.
PT. Musi Hutan Persada Pasific Timber (Barito Group)
To fulfill their needs of wood for their prime material for pulp and paper, so PT Musi Hutan Persada (Group Barito Pacific) with Fiber Plantation concession rights for 447.290 Hectares bruto expanse 5 (five) districts, Musi Banyu
Asin, Musi Rawas, Lahat, Ogan Komering Ulu and Muara Enim. With a very wide concession, PT. MHP also disputing land which belongs to Traditional/Custom Land and largely land clearing (by burning) which causing poverty process to community who daily never loose from Land and forest ecosystem is damage, because forest which were heterogen becomes homogen forest.
Case Sample :
Land dispute between community of Marga Penukal with Fiber Wood Plantation Company PT.Musi Hutan Persada, started by the pilfering of community land of nine villages (Mangku Negara, Gunung Menang, Sungai Langan, Sungai Ibul, Sepantan, Trans Suka Maju, Sungai Limpah and Kokui) by PT.MHP in 1991 until 1993 widely 1150 hectares with using military power which use war practice as their reason. Since then community was starting resistence movements to company activity, however this resistence always has to face with military power and stigmas of development and also policies that always profiting the entrepreneur.
Because of this expropriation at least 551 families lost their land and farm and they have to change their profession become labor on Fiber Wood Plantation which the earnings far away below their daily needs for life. Decrease of community earns causing community live in poverty cyrcle which also implicate to decrease of education.
Community has several time complain about this problems to government and other relevant institution started from Subdistrict level until Center Level by using letters or even directly come. But until now there are no seriousness of the government and company side in responding these problems.
It’s Time To Stop Negative Impact of This Industry Together
By this, several NGOs and Community Organization in Indonesia has some big concerns about natural forest sustainability. Forest conversion by Fiber Woods Plantation development for pulp and paper industry has in the position of crossing the border of deforestation and dehumanisation. Savign the remaining forest and denial of custom community rights at the Fiber Woods Plantation and ulp and Paper Industry area has causing disasters that couldn’t imagined before. The use of paper to fulfill raw material supply for end industry (pulp and paper industry) to producing paper for international world consumption has scratch bad history againts robbering and contradiction of community’s rights. We saw that systematic plan had happened by the market and industry’s actors and facilitated by the Indonesian Government with their policies, directly and or indirectly has birth the company practices which not taking side to the community poverty and environment in widely.
The reality that pulp and paper industry contribute to providing employment and income to the State or government where its operates, however cannot be ignored that the existence of this industry also contributes negative impacts to the environment destruction, conflict and social lives and poorness for the people arounds it.
All these problems show because there are different perception and way of look and how to face the intention which grows. Several observer like NGOs has the same point of view to the efforts of recovery and transformation of Pulp and Paper Industry development in Indonesia.
Above are our record which birth from the presentation of organizing experience and victims community trhough several significant argumentations about pulp and paper industry, has pushed us together, stand in insisting on several changes of policies and refusing every form of industy implementation and destructions expanse. In couple of years a head we will take position to monitor every type of policies, insisting the changes and policies revision that will conduct by us in multiperspective.
Some of these processes we make in form of Together Work Position Paper for transformation of Pulp and Paper Industry in Indonesia in the policy chains, industry and social conditions as the ideal dreams of NGOs and victims community in Indonesia. This condition we efforting togetherly and consistently towards the ideal future to the Realization of Local Community Rights and Imprtance Reapect also the guaranteed of Ecology Importance in Fulfilling Indonesian Paper Demand.
To achieve this ideal future in forest industry era like pulp and paper in Indonesia, it will need efforts to achieve ideal aspiration together through: First: Intervense the policies changes for Fiber Woods Plantation-Pulp and Paper expanses locally, nationally and internationally, second: extending the confession and appreciation on forest management by local community (custom), and third; closing the pulp and paper industry which conduct environment, community social economic destructions and refusing developing of new industry also stopping the Fiber Woods Plantation expanse for Pulp and Paper.
Box: Community refuse to plant Fiber Woods for Kiani Kertas material needs
Historically the community around PT. Kiani Kertas has their own wisdom to manage their area which used to fulfill their daily needs. This has been going on for long time since before the present of PT. Kiani Kertas and some companies of Logging Concession/Fiber Woods Plantation which operates in Berau district. Since the entering of those companies, the social, culture wisdom and community land became “lost” its faith on management system which already conducted.
Local community is not usual with new management system which felt stranged by them with the way of cutting the trees as many as possible and not plant it back. This model makes the local community become put asides. So that the local community has to ”evacuate” themselves to the areas where the forest ecosystem still good and not being touched before, even there were local community that still hang on but their quantity is very low. This factor added by the migran of non local community who directly very influence to the social, culture and economic lives of the local community which close to impoverishing.
Management of area and land by local community around the mills and Fiber Woods Plantation still depends on the mechanism of simple management and land used for some culture plants as their earns, like : farming, growing crops, gardening, keeping live stocks and fishering. Although until now there are community who following some programs of Construction Community of Forest Village (PMDH) offered by PT. Kiani Kertas and several Fiber Woods Plantation Companies which operates around their villages to plant acacia, Sengon dan Gmelina for the needs of mill. Unfortunately commitment of Kiani Kertas not to secure and prosperous the community yet, because the pattern that they offered harming the community, so the disinclination of the community to replanting the plant for the needs of pulp and paper
To achieve the condition of this ideal aspiration in the process of development of forestry industry pulp and paper in Indonesia, together agreement as the result of the workshop process in January 12-13 2007 in Pekanbaru, developing the chosen strategy as part of actions towards the efforts which struggled as follows:
Extension of Capacity and Participation for Policies Changes of Pulp and Paper Industry in Indonesia
This strategy is aimed to insist the Government to not giving new permit, conducting law enforcement, not giving “cutting permit” in nature forest and Owned Forest area for the importance on Fiber Woods Plantations Development, developing alternative material raw besides woods for paper and developing recycling paper, stopping export, developing cooperation extention locally, nationally and internationally, judicial review on regulations which proved by contradiction of rules and regulation relate to the pulp and paper and Fiber Woods Plantation.
Extension of Local Community Particioation in Sustainable Forest Management and Have Their Own Rights.
This strategy aimed to the efforts to; taking the people’s rights on managing their forest resources, developing and promoting forest management practices which sustainable with local community based (Custom), capacity building, skill and community organizing and make the local communtiy as the holder of main issu in management of pate and downstream forest area.
Extension of Networking to Resque Indonesian Forest
This strategy aimed to extending the networking on NGOs level, Community and other parties to resque the forest and expanse-close the pulp and paper industry in Indonesia, as the efforts to; encourage the policies change of Fiber Woods Plantation-Pulp and Paper locally, nationally and internationally, protecting nature forest area [community forest, protect area, national park and conservasion area], conducting strengthening and inspiring the community, strengthening the networking and advocation and in the same time creating working group and law enfrocement.


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