The production of rightlessness: palm oil companies and land dispossession in Indonesia

ABSTRACT

Addressing the comparative study of global land grabbing, this article seeks to explain the relative ease with which palm oil companies dispossess rural Indonesians of their land. Employing detailed documentation of 150 conflicts between rural communities and palm oil companies, we analyse both the actual processes through which companies acquire land as well as the legal provisions that facilitate these processes. We argue that palm oil companies are succeeding in dispossessing rural Indonesians because of the ways in which formal regulations and informal machinations have produced rightlessness. This rightlessness has three main sources: curtailed land rights, ‘backdoored’ legal protections, and collusive business–politics relationships which enable companies to evade regulations. We draw attention to the varying role of the state in processes of dispossession: compared to ‘regimes of dispossession’ elsewhere, companies rather than the state organize the actual land dispossession. This smaller role of the state disadvantages affected communities.

KEYWORDS:

• Rightlessness
• dispossession
• land conflict
• palm oil
• law
• Indonesia

Introduction

On 17 February 2020, the police of East Kotawaringin district (Central Kalimantan) arrested Dilik and Hermanus, two villagers of Penyang village. The palm oil company PT HMBP (Hamparan Mas Sawit Bangun Persada) had accused them of harvesting the fruits of its oil palm trees. The villagers, in turn, claimed that the company had planted these trees on their land. They argued that this land and its trees were located outside the boundaries of the company’s plantation permit. Three weeks later the police arrested another villager called James Watt after he had gone to Jakarta to report the case to the national human rights commission (Komnas HAM). James was accused of being the organizer behind the fruit theft.

This conflict started in 2005 when PT HMBP decided to cultivate 1865.8 ha outside the 8200 ha for which it had just received a concession, including the 117 ha belonging to the Penyang villagers. In response the villagers of Penyang have engaged in various kinds of protests, from blockading roads, organizing demonstrations, presenting evidence in hearings with both local government and parliaments and, ultimately, harvesting the fruits of the oil palm trees on their land. Between 2006 and 2019 a range of government agencies – from the district government to the local parliament (in 2011) to, later National Land office (BPN) and the national human rights agency Komnas HAM – investigated the villagers’ claims (Nugraha & Marie, 2020). They all concluded that PT HMBP illegally cultivated palm trees outside of its HGU license and called on the company to return the land to villagers.

Yet PT HMBP continues to run its plantations on the disputed land. The company has never been punished for its illegal cultivation. This violation did not even enter the deliberation of the judges hearing the case against the villagers. The harvest of oil palm fruits was considered as a ‘pure’ theft and, hence, a criminal offence. On 15 June 2020, a local court sentenced James and Dilik to 10 and 8 months jail sentences. Another villager, Hermanus, passed away in the period of police custody, due to his deteriorating health condition not long before the final ruling. Despite a public outcry over this case (Jong, 2020), it remains unlikely that Penyang villagers will recover their land.

Such conflicts between rural Indonesians and palm oil companies about the establishment and management of plantations can be found across Indonesia. As the total size of palm oil plantations is roughly doubling every decade since early 2000s, rural Indonesians are losing large tracts of their land to these plantations, often with limited or no compensation (see Colchester & Chao, 2013; Haug, 2014; Levang et al., 2016). In response, villagers are engaging in demonstrations, lobbying and litigation as well as road blockades, destruction of property and violence. When we started to document the trajectories and outcomes of the resulting conflicts in 2019, our NGO partners had identified 544 such conflicts in just four provinces (Riau, West Sumatra, West Kalimantan and Central Kalimantan), suggesting that the majority of oil palm plantations are in conflict with neighbouring villages. The National Land Agency (BPN) has estimated that there are currently around 4000 such conflicts throughout Indonesia (Coca, 2015).

As in the case of Penyang village, these conflicts tend to drag on for years without any effective resolution. A growing body of case studies is showing that communities are relatively powerless as not only they generally fail to stop companies from taking possession of their land – generally a foregone conclusion (see Lund, 2020) – but also fail to address their grievances about the lack of adequate compensation for the loss of land (e.g. Anderson, 2013; Colchester & Chao, 2013; Cramb & McCarthy, 2016). As we discuss elsewhere, in our own study of 150 such conflicts we also found that few companies are willing to return land or provide better compensation. Despite international pressure and various initiatives to improve conflict resolution, we found that 102 (i.e. 68%) of the conflicts we studied remained unresolved (Berenschot et al., 2022). What explains this worrying pattern? Why does Indonesia’s rapidly expanding palm oil industry so regularly succeed in dispossessing communities from their land with no, or very little, monetary compensation, and why is popular resistance against this dispossession relatively unsuccessful? In this essay, we synthesize findings from available literature and our own study of the trajectory of 150 palm oil conflicts to trace the processes through which palm oil companies obtain land from communities for the establishment of plantations.

In doing so we aim to contribute to the sprawling academic debates about the character of corporate ‘land grabbing’ across (mainly) the Global South. Observing that accelerating processes of land use change are often exclusionary and coercive in nature, a wide range of studies has documented how rural communities are being dispossessed from their land for the benefit of infrastructure projects, mining or plantations (e.g. Afrizal & Berenschot, 2022; Dhiaulhaq & McCarthy, 2019; Pichler, 2015;). While there have been a number of useful and insightful overview studies (Borras & Franco, 2013; Hall et al., 2015) and several comparative studies (e.g. Andreas et al., 2020), there is still much progress to be made concerning the variation in the character of dispossessionary processes in different countries and sectors. As the introduction to this special issue notes, due to the reliance on case studies (and the lack of attention to variation in overview studies), few scholars have undertaken to provide a more general assessment of a prevailing regime of dispossession in a particular country or sector, let alone comparing such an assessment with regimes of dispossession elsewhere.

We aim to contribute to such comparative study of regimes of dispossession by analysing the particular nature of dispossessionary processes generated by the rapid expansion of oil palm expansion in Indonesia, and by highlighting its distinctive features compared to dispossessionary processes elsewhere. In particular, we draw attention to the varying role of the state in dispossessionary processes. Studies of ‘regimes of dispossession’ have prioritized cases of dispossession managed and organized by state institutions – such as Levien’s study of SEZ’s in India (Levien, 2013; 2018, see also Agrawal 2021, Da Silva et al., 2020) as well as studies on, for example, China (e.g. Cai et al., 2020; Zhang & Wu, 2017). These are cases where state agencies are themselves vacating land by providing financial compensation to previous occupants, backed up by state-organized coercion. In such cases of ‘state-orchestrated’ dispossession, state institutions act as ‘land brokers for private capital’ (Levien, 2015, p. 147). This dominance of the state has shaped conceptualizations of ‘regimes of dispossession’ which has been defined in terms of ‘the redistribution of land by owners of the means of coercion [such as] states, the predominant owners of the means of coercion in the contemporary world [or] mafias, militias, armed gangs, or landlords’ (Levien, 2018, p. 7).

Yet land dispossession is often executed neither by states nor by these violent actors, but rather by companies. In such cases, the state is hardly a passive bystander – as the state provides companies with the legal justification for dispossessing people of their land. But companies execute the actual dispossession in the sense that they ensure that previous occupants cede their control over land, while the role of state agencies is more restricted to providing legal backing and occasionally lending a coercive hand. We argue in this article that such variation in the involvement of the state in processes of dispossession matters greatly, not just for understanding the relative ease with which companies in countries like Indonesia acquire land, but also for understanding the character and scope for resistance afterwards.

In this way the difficulties that rural Indonesians like the Penyang villagers face in resisting even (in this case) illegal land dispossession, stem not just from the ways in which the Indonesian state curtails their land rights, but also from the ways in which companies like PT HMBP undermine existing rights. Defining rightlessness in terms of the absence of effective legal protections of one’s interests such as land, we show that state regulation is rendered ineffective due to informal collusion between economic elites and powerholders. The rightlessness experienced by rural Indonesians has three main three sources: already weak legal protections, the ‘backdooring’ of these legal protections through the adoption of lower-level regulations, and collusive business–politics relationships which enable companies to evade remaining regulations. Such an analysis focused on (the sources of) rightlessness facing rural Indonesians can expand the more common analyses focusing on their powerlessness (e.g. Acciaioli and Dewi 2016; Potter 2009; Pichler, 2015). While the uneven balance of power between communities and companies is indeed a key characteristic of these conflicts, by focusing on the sources of rightlessness of rural communities we can gain a better understanding of why communities are often relatively powerless.

We develop these arguments on the basis of a study of 150 conflicts between palm oil companies and rural communities over the establishment and management of oil palm plantations, taking place between 2000 and 2019 in four Indonesian provinces: West Sumatra, Riau, West Kalimantan and Central Kalimantan. Through a collaboration between Indonesian and Dutch academic institutions as well as six Indonesian NGO’s, we collected 18.2 GB of material including hundreds of (regional) newspaper articles, government documents, NGO reports, court rulings but also, in total, 283 interviews with community members. With this material, the researchers involved in this project wrote extensive reports to detail causes, trajectories and outcomes of each of these conflicts. We subsequently use these reports to code the salient characteristics of each conflict, which is how we arrived at the descriptive statistics presented in this paper. The studied cases were randomly selected on the basis of long lists prepared by NGO partners, while some of the selected were dropped due to the unavailability of reliable sources.¹ As we focus here on the initial processes through which companies gained control of community land, we discuss the subsequent contentious politics sparked by palm oil expansion elsewhere (see Berenschot et al., 2022)). For a more detailed discussion of the documentation process, we refer to the online annexure.

This essay proceeds as follows. In the following section, we build on literature on citizenship in the global south to discuss and explain our usage of the term rightlessness. In the subsequent two sections, we discuss why and how the land rights of rural Indonesians are severely restricted and how recent reforms have further undermined citizen rights by ‘backdooring’ previous regulations. Subsequently we discuss the on-the-ground processes through which palm oil companies acquire land for plantations, with particular attention for the impact of collusive relationships between palm oil companies and state authorities. We end by placing our findings in a comparative perspective.

Rightlessness and informalized state institutions

A growing body of research on ‘effective citizenship’ (Heller, 2012) has drawn attention to the considerable gaps that may exist between rights-on-paper and rights-as-realized: the actual, on-the-ground impact of citizen rights and hence the actual nature and experience of citizenship depends not just on the formulation of these rights in laws and statutes but also on the capacity of citizens to actually realize these rights. In this vein anthropological studies on ‘the everyday state’ have drawn attention to how the content and reality of rights are the subject of everyday negotiations (Lazar, 2008) taking place in a sphere of ‘political society’ (Chatterjee, 2004) or ‘gray zone’ (Auyero, 2007) where informal personal connections, norms of reciprocity and savoir-faire shape the capacity of citizens to actually realize their rights (see Berenschot et al., 2018). The character and quality of citizenship is, this literature argues, not just the product of one's legal status and associated rights, but also a product of informal networks, social affiliations and the local political economy (Berenschot & van Klinken, 2018).

This struggle to realize citizen rights is particularly salient in the context of informalized state institutions, i.e. institutions whose capacity to implement laws and regulations is regularly undermined by the exchanges of favours taking place between state and non-state actors. In a country like Indonesia, the outcomes of bureaucratic processes are often the product of under-the-table deals taking place in a netherworld where personal connections, bribes and clientelistic practices rule (see Aspinall & Berenschot, 2019). As bureaucrats are highly susceptible to informal pressures coming from powerful, wealthy elites, Indonesia is regularly described as a ‘patronage democracy’ (e.g. Schulte Nordholt & van Klinken, 2007) where ‘what matters is who you know, what and who you pay, and to whom you pledge loyalty’ (Blunt et al., 2012, p. 215). Judges are distrusted and perceived to sell their judgements to the highest bidder (Kouwagam, 2020) while also state officials cannot be relied upon to apply state regulation in a straightforward, impersonal manner (see Aspinall & van Klinken, 2011).

In this context, evidence is mounting that economic elites – including palm oil entrepreneurs – are providing politicians with campaign funding as a means to obtain concessions and business permits (e.g. Hamilton-Hart & Palmer, 2017; Aspinall & Berenschot, 2019, pp. 203–228; Gecko Project, 2017). With the advent of direct elections for district-heads and governors (in 2004), economic wealth also became a more important ingredient for political success (Winters, 2011, pp. 139–193). As the costs of election campaigns spiralled, politicians either needed to be wealthy themselves or they needed the backing of wealthy campaign donors. At the same time, Indonesia’s decentralization process gave local governments more influence over licensing processes for, among others, palm oil plantations, which incentivized business actors to engage in deals with local politicians. This combination of expensive election campaigns and decentralization has tightened the embrace between political and economic power (see Hadiz & Robison 2004). Not only did politicians became more dependent on their campaign donations, but Indonesia’s democratization process has also enabled such economic elites to enter politics themselves and, using their wealth to finance election campaigns, to capture state power. As a small elite of businessmen-cum-politicians like Aburizal Bakri, Surya Paloh, Sandiago Uno or Erick Thohir came to dominate politics both at the national and the local level, the term ‘oligarchy’ gradually became an oft-used term to describe Indonesia’s democracy (see Winters, 2011 and Hadiz & Robison, 2013).

Given the fact that corporate land acquisition takes place in this context of informalized state institutions and a political arena dominated by economic elites, dispossessionary processes should not only be studied in terms of the formal procedures that guide them. The ‘powers of exclusion’ (Hall et al., 2011) need to be understood not only as a function of state laws but also in terms of how their implementation is shaped by regular negotiations and interactions taking place among a wide range of interested parties. ‘[L]aw and property are no more settled facts than facts to settle’ (Lund, 2020, p. 176). In this light, we propose that the impact of the close relationships between economic elites and political elites merit special attention. The capacity to ‘settle’ facts and claims related to land is not evenly distributed among disputing parties. Rather, the oligarchic nature of Indonesia’s democracy is skewing land governance towards the interests of corporate actors. The interdependencies and collusive relationships between economic elites and powerholders are not only shaping the character of Indonesia’s laws and regulations, but also facilitate their manipulation and circumvention. The oligarchic nature of Indonesia’s democracy has facilitated the undermining of legal guarantees of citizen rights through a practice which we call the ‘backdooring of the law’: the lobbying of influential social forces – such as the palm oil industry – for the adoption of specific clauses in new regulations or implementation guidelines (peraturan pelaksana) that undermine or weaken obligations imposed by existing laws. Furthermore, these close relationships between economic elites and powerholders enable companies to convince particularly local authorities to tolerate or ignore on-the-ground violations of regulations and policies.

We argue that these three consequences of an oligarchic political arena – already weak legal protections, the regular backdooring of existing laws and the collusive evasion of remaining legal protections – produce rightlessness. We will discuss these three sources of rightlessness in the next sections. We employ a distinction more commonly used in migration studies (e.g. Mann, 2018 and Gündogdu, 2014), between de jure and de facto rightlessness. Whereas de jure rightlessness refers to the ways in which legal provisions prevent people from enjoying citizen rights, de facto rightlessness refers to a situation where citizen rights are rendered ineffective and meaningless due to the way in which legal provisions are (not) being implemented. In contrast with this literature we emphasize that the de facto rightlessness facing rural Indonesians is not a status or a semi-permanent condition; rather this situation is actively produced through informal, collusive exchange relations between state-authorities and business actors. As we will see, while various legal provisions significantly curtail the land rights of citizens, rural Indonesians are not de jure rightless since these provisions also contain various kinds of protections of citizen rights. When it comes to the actual implementation of such provisions, however, collusive relationships between business actors, politicians and bureaucrats are rendering these provisions virtually meaningless. This de facto rightlessness is enabling palm oil companies to acquire land at costs far below market prices in a way that citizens find difficult to resist. In other words, we argue that dispossessionary processes are facilitated by the ways in which collusive business–politics relationships produce rightlessness.²

Curtailed land rights

One of the main reasons why palm oil companies and other resource-based investors so regularly succeed in dispossessing communities from their land is that Indonesian law offers very limited recognition of the land rights. This weak recognition of land rights is ‘imperial debris’ (Stoler, 2008), in the sense that it can be traced back to a 150-year-old concept introduced by Dutch colonial administration, known as the domein verklaring. In a 1870 agrarian law, the colonial rulers declared that ‘all land not held under proven ownership, shall be deemed the domain of the state’. This ‘domain declaration’ undermined customary land rights and enabled the Dutch administration to claim ownership of most of the land in Java (as well as, later, beyond Java) and provide European plantation and mining companies with cheap access to land. After its independence in 1945, the Indonesian state largely maintained this colonial heritage. The 1945 constitution as well as the Basic Agrarian Law of 1960 does acknowledge the rights of citizens and customary rights over land and natural resources (Fitzpatrick, 1997, p. 4). However, by entrusting the state with a ‘state right of control’ over land (hak menguasai negara), the constitution gave the Indonesian state control over land and curtailed individual land ownership. This principle was further elaborated in the forestry law that Suharto’s then recently established authoritarian regime adopted in 1967. This law designated 143 million hectares – then almost 75% of Indonesia’s territory – as forest land (‘kawasan hutan’) which cannot be privately owned (Dhiaulhaq & Berenschot, 2020).

Despite various attempts at reform, these stipulations live on. At present, the Indonesian state still designates about 63% of its territory as forest land (MoEF, 2022). Most of this land is not actually forest, and exists merely as an administrative category to maintain the control of the Indonesian state (and its ruling elites) over land. In these ‘political forests’ (Peluso & Vandergeest, 2001), Indonesian citizens cannot obtain formal ownership of the land, while land-titling as well as registration of public ownership in non-forest areas is limited. Most rural Indonesians are, consequently, forced to rely on customary law and more informal methods of land registration to organize their land dealings. As a result communities affected by land conflicts generally lack formal evidence to support their claims in court (see Bedner, 2016).

This curtailed recognition of individual land ownership has enabled the Indonesian state to implement a ‘concession system’: the corporate acquisition of land for establishing a plantation does not require the actual purchase of land but, rather, it requires obtaining state concessions and permits from both national ministries as well as local governments. Companies never become owners of this land but rather obtain land leases for, in most cases, 30 years. Needless to say, this concession system is very lucrative not only for companies but also for the politicians and bureaucrats awarding these concessions. This helps explain why, despite various attempts, the outsized control over the Indonesian state over land has never been significantly curtailed. Once a concession permit for a particular piece of land is obtained, companies have a legal basis for excluding communities previously living or working on that land. In court, this concession generally trumps the (customary) proofs of land ownership held by communities. Their weak legal standing does not only prevent communities from holding on to their land, it also significantly weakens their bargaining position when trying to obtain adequate compensation (see Dhiaulhaq et al., 2018).

Yet despite this curtailment of land rights, various laws and regulations do provide a range of measures intended to protect the interests of rural Indonesian against incoming (palm oil) companies. Three such provisions are particularly important since they frequently become a bone of contention in palm oil conflicts. First, the establishment of an oil palm plantation is guided by elaborate licensing procedures, requiring companies to meet a range of requirements. This includes the implementation of various measures to mitigate environmental and social impacts. The process starts with an arahan lokasi or initial ‘location direction’ permit issued by a district government, after which a company can start the process of seeking community consent. After obtaining a subsequent location license (izin lokasi), written proof of community consent and an approved environmental impact assessment (EIA), companies can apply for the plantation permit (Izin Usaha Perkebunan or IUP). If the plantation lies inside the above-mentioned forest estate, a ‘forest release permit’ (Pelepasan Kawasan Hutan) from the ministry of forestry is also required. Once all these permits are obtained, palm oil companies can apply for the most important licence to the Ministry of Agrarian Affairs and Spatial Planning, the Hak Guna Usaha (HGU or a right to ‘exploit’ or cultivate permit). The HGU gives companies the right to run a plantation for, in most cases, 30 years.

Second, palm oil companies are also required to obtain free, prior and informed consent (FPIC) from affected communities. Before establishing a plantation, permit-holders need to fully inform communities of their plans and, subsequently, obtain – without employing coercion in any form – a written statement that expresses the agreement of community members holding land (both with and without formal land titles) inside the concession. This includes an obligation to compensate communities for the loss of access to land. This requirement to obtain community consent stems from both international treaties,³ industry standards such as the ‘principles and criteria’ adopted by the Roundtable for Sustainable Palm Oil (RSPO) as well as (while the term FPIC is not always used) several national laws such as the 1999 Forestry Law and the 2014 Plantation Law.

Third, Indonesian law⁴ requires palm oil companies to implement joint-venture smallholder schemes for affected communities. These schemes are often called ‘inti-plasma schemes’, which refers to the part of (the profit from) the plantation that is reserved for communities (the ‘plasma’) next to larger company parts (the ‘inti’).⁵ Since 2007 all companies incorporating community land into their plantation are required to provide some (at least 20%) of the resulting plantation (or the profits of this land) to the community. This promise of ‘plasma’ and its associated profits often serves as a lure to tempt communities to give up their land. Yet even on paper this deal is rather unattractive: communities not only agree to losing 80% of their land to the company, but they also have responsibility to repay the costs of planting and maintaining the oil palm trees – costs which are deducted from the actual profits from the remaining 20%. In practice these inti-plasma schemes turn out to be even less lucrative as promises to provide plasma are regularly reneged while the profit-sharing is often in-transparent or outright fraudulent (see Potter 2016), making inti-plasma schemes a major driver of conflicts between communities and companies.

In sum, while Indonesian law severely curtails the land rights of its citizens, it does offer various rights (to profit-sharing and to withhold consent) as well as other forms of protections of the interests of communities. Yet, as we will explore below, the complex and contradictory nature of Indonesian legal framework related to land have enabled corporate actors to create various backdoors which enable them to circumvent such legal obligations vis-a-vis communities.

Backdooring the law

Indonesia’s legal framework related to land and plantations is a complex amalgam consisting not only of several paramount laws – such as the 1960 basic agrarian law, the 1999 Forestry Law, the 2007 Law on Spatial Planning and the 2014 plantation law – but also a rather elaborate set of additional laws, presidential instructions, ministerial regulations and implementation guidelines.⁶ The relationship and hierarchy between these paramount laws and various other types of regulations is notoriously vague in Indonesia (see Butt & Lindsey, 2018, pp. 34–60). As a result, this complex patchwork has generated a rich hunting ground for a practice which we call the ‘backdooring’ of laws: the multilayered nature of (land) governance in Indonesia has enabled well-connected economic elites to avoid the stringent obligations imposed by existing laws by lobbying for lower-level regulations or implementation guidelines (peraturan pelaksana) to undermine or weaken these obligations.⁷ In getting such regulations adopted, economic elites undermine the citizen rights enshrined in existing laws, thus producing de facto (but not de jure⁸) rightlessness.

The political and practical benefit of this backdooring of laws lies partly in its stealth: instead of revoking existing laws and thereby formally revoking established rights, the strategic engagement with lower-level regulations can serve the same aims while remaining largely below the radar and, thus, avoiding public outcry. But an even greater benefit of backdooring is that it alleviates burdens and onerous requirements of legal provisions while maintaining the legitimacy afforded by these laws. In the light of the considerable (international) scrutiny of the behaviour of palm oil companies, the ‘backdooring’ of existing laws maintains the legitimacy provided by these laws, while alleviating costs and downsides associated with these laws, allowing the palm oil industry to have their cake and eat it too.

Because of the oligarchic nature of Indonesia’s democracy and the prominence of economic elites in politics, business interests can succeed relatively easily in this ‘backdooring’ of state regulation. Not only prominent political leaders with policy-making influence like Surya Paloh, Luhut Pandjaitan or Erick Thohir own palm oil companies. These relationships also shape the character of Indonesia’s parliament: the newspaper Tempo documented that 262 out of the sitting 575 parliamentarians either have management positions in, or (co-) own, natural resource companies such as palm oil (Christy, 2019). For example, a study conducted by Bersihkan Indonesia, a coalition of Indonesian NGOs fighting corruption, found that 57% of the members of the committee and taskforce drafting the below-mentioned Omnibus law, either owned or occupied a leadership position of a natural resource company (Djegadut, 2020; Jawapos, 2020). This fusion of economic and political power enables economic interests to influence policy-making processes.

We will discuss three recent examples of legal backdooring. Our first example concerns the above-mentioned legal obligations of companies to provide local communities with (the profits of) a plantation with a size of at least 20% of the total amount of land that communities provided. This provision was effectively undermined in 2013, when the ministry of agriculture adopted a ministerial regulation that stipulated that this 20% of plasma-land could also come from outside the concession area.⁹ As freely available, sizable plots of land suitable for oil palm plantations are very difficult to find, the practical effect of this clause buried in a ministerial edict was that it freed many palm oil companies from their obligation to provide communities with the promised plasma-plantation – without actually saying so. We saw the effects of this regulation in the conflicts that we studied: in response to demands of communities to realize the promised profit-sharing, companies simply referred to this clause and asked communities to find land outside their concession. As such land could not be found, communities often ended up not receiving the plasma plantation that was promised to them.

A second example concerns the longstanding and ongoing struggle of Indonesian NGO activists to get the Indonesian state to recognize customary land rights. An important motivation behind this campaign was the hope that such formal recognition would address the above-mentioned weak legal standing of land claims of rural Indonesians. The hope was (and is) that once the state would recognize land claims based on customary land rights, communities would stand a better chance of defending their land in court. In 2013, a leading NGO, AMAN, booked a major victory in this regard when Indonesia’s constitutional court ruled that the Indonesian state should recognize adat land rights. But the implementing ministerial regulations that the Indonesian state subsequently issued in 2015, 2019 and 2020¹⁰ ended up undermining the substance of this court ruling: these regulations stipulated such onerous and complex requirements for communities and their land to be recognized, that in practice few areas have received formal recognition. AMAN estimates that there are 40 million hectares of customary forests in Indonesia (Mongabay, 2013) and it has assisted communities to apply for registration of about 13 million hectares as adat forest. Yet up to November 2022, the state recognized only 148.488 ha (MoEF, 2022). A particularly onerous requirement, for example, concerns the stipulation that adat forest land can only be recognized after the local government issues local regulation which officially recognizes an adat community. As local governments are loath to cede control over land, such regulation is rarely issued and very expensive to obtain (see Bedner & Arizona, 2019; van der Muur, 2018). Such stipulations enable the Indonesian state to have it both ways: while ostensibly recognizing customary land rights, the state can avoid its practical implication – i.e. ceding much control over land.

A third example concerns the above-mentioned licensing processes guiding corporate land acquisition. Officially, companies are required to obtain a ‘forest release permit’ for plantations inside areas designated by the government as forests. However, a 2021 investigative report (Greenpeace, 2021) found that 3.2 million hectares or a Belgium-size area of oil palm plantations (or 19% of all plantations) are illegally planted inside forest areas. At least 600 companies – nearly a third of all palm oil companies in Indonesia – have such illegal plantations. Seeing that many companies operate without such a license, successive governments adopted various regulations that allow companies to get away with this violation. For example, in 2012 the Indonesian government issued a regulation (PP No. 60/2012) which allows for the ‘purification’ (pemutihan or whitewashing) of plantations inside forest areas. In doing so the 2012 regulation ‘backdoors’ both 1999 Forestry Law (No. 41/1999) and the 2007 Law on Spatial Planning: while the 1999 Forestry Law and the 2007 law on spatial planning disallow the issuance of plantation permits in forest areas, the 2012 regulation provides companies with plantations inside forest areas to retrospectively apply for forest release permits. Similar backdooring occurred through the new 2020 Omnibus Law on Job Creation (UU Cipta Kerja). Article 110A and B allows companies having plantations inside the forest estate to continue operations (and, in most cases, can apply for a forest release permit) after paying an administrative fine. As legislators voting for this legislation seemed to have realized only afterwards (Jong, 2021), this clause basically voids any meaningful deterrent for companies to establish plantations inside the forest estate. The effect of this new legislation became clear recently: in September 2022 the Indonesian government pardoned 75 companies having illegal plantations inside forest areas (in exchange for paying (in total) 222.7 billion rupiah (or 15 million US dollar) in fines) and signalled that of the 616 companies it identified as operating illegally inside forest areas, many would be allowed to benefit from this amnesty scheme (Jong, 2022).

These are just three examples. Other examples include the way in which the Omnibus Law rendered the required environmental impact assessment meaningless by removing oversight, or the clause in the 2004 plantation law (article 21) which makes ‘any disturbance of the operation of plantation’ an illegal act. The constitutional court ruled in 2011 that this clause violated citizen rights and was unconstitutional. Yet in 2014, Indonesia’s parliament put this clause back into the 2014 plantation law, thereby effectively undermining the right to protest of communities around plantations (see below). These are all examples of how the complex layering of regulations creates a system of smoke and mirrors where relatively strong legal provisions gradually lose their teeth and effectiveness as ‘laws recognizing the people’s right to land coexist with laws justifying eviction’ (Hall et al., 2011, p. 12). The bewildering complexity of overlapping and contradictory laws (see also Bedner, 2016) is a willed creation of political and economic actors, who have used these backdooring practices to generate a – for them – very lucrative state of confusion. The coexistence of different, sometimes conflicting regulations provide bureaucrats, judges and regulators with considerable discretionary freedom, allowing them to selectively impose rules and punishments in ways dictated by expediency and (financial) incentives. As we will explore further below, this situation incentivizes economic actors to cultivate close relationships with state officials to ensure that this discretionary freedom is applied in their favour.

Collusion and rightlessness

Despite the weak recognition of land rights and such ‘backdooring’ of laws protecting citizen interests, above-mentioned regulations concerning (particularly) licensing, informed consent, and mandatory profit-sharing do provide various protections – which is why citizens are not de jure rightless. Now we will turn to a discussion of how some of this regulation works out in practice. The third source of rightlessness concerns the ways in which collusive relationships between corporate actors and authorities facilitate a systematic circumvention of such regulation. To illustrate the character and impact of this collusion, it is useful to further unpack the process through which palm oil companies in Indonesia gain access to land. We will briefly discuss four distinct phases of this process: the licensing process, the attempts to obtain community consent, the handling of protests and conflict resolution efforts. Collusion marks all these four phases of dispossessionary processes – while we emphasize that there is considerable variation as not every company engages in such practices, or at least not to the same extent.

Lackadaisical licencing processes

As we discussed, the Indonesian state regulates the expansion of oil palm plantations through elaborate licencing procedures which – despite various backdoors – could serve to protect the interest of rural Indonesians. Yet in practice, the implementation of these procedures has been rather lackadaisical. The government audit board (Badan Pemeriksa Keuangan) found that millions of hectares of palm oil plantations across Indonesia do not have the right to cultivate (Hak Guna Usaha or HGU), which means they operate illegally and do not pay tax (see Thomas, 2021 and Andriani, 2015). According to Forest Watch Indonesia (FWI, 2019) no less than 68% (14.8 million ha) of plantations with plantation licenses (IUP) are operating without the required HGU license, while on the other hand 36% of HGU licenses (over 4 million ha) are granted without IUP license. Furthermore, as mentioned above, 19% of all plantations are illegally located inside Indonesia’s forest estate – i.e. land where no palm oil plantations are allowed. Conversely, in other cases, forest release permits are granted for areas where plantations are actually disallowed, such as protected forest or deep peatland (see Meijaard et al., 2018). Another type of license violation concerns companies like PT HMPB who set up plantations outside their concession boundaries. In our study, we found these various license violations to be relatively common: in 38 (or 25%) of our studied cases the company lacked the required HGU license while in 24 cases (or 16%) the grievances of communities concerned license violations such as the establishment of a plantation beyond concession boundaries. Perhaps out of embarrassment with this state of affairs, the Ministry of Agrarian Affairs and Spatial Planning has (despite considerable public pressure) decided to keep all information regarding HGU licenses secret – with the argument that this secrecy is needed to protect the palm oil industry (Candra, 2021).

Evidence is mounting that this lackadaisical implementation of licensing procedures is largely due to collusive relationships between palm oil entrepreneurs and powerholders. In 2017 The Gecko Project revealed, for example, how the district head of Seruyan (Central Kalimantan), Darwan Ali, used his discretionary power to award licenses to 18 newly minted companies set up by his family members and friends (Gecko Project, 2017). A 2016 investigation by Indonesia’s anti-corruption agency KPK found that licensing processes were regularly marred by nepotism as well as bribe-taking, such the cases involving district head of Buol District, Amran Batalipu and the Governor of Riau, Annas Maamun (KPK, 2016). Plantation licenses are regularly granted to newly established companies without any expertise in running a plantation but with close connections to power-holders: very often local governments are awarding permits to shell companies owned by family members or friends of elected politicians, who exploit their closeness to powerholders to obtain such licenses only to subsequently sell the now valuable shell company to an actual palm oil company. There are indications that such collusive practices are related to the expensive nature of election campaigns: as politicians seek to finance their campaigns, they are forced to use their control over licensing procedures to extract funds from, among others, palm oil companies (see Aspinall & Berenschot, 2019).

Such studies suggest that palm oil entrepreneurs regularly succeed in using personal connections to powerholders to obtain licenses and to circumvent associated requirements. These personal connections extend beyond elected politicians: during our study, we regularly encountered indications that palm oil companies take considerable care in cultivating their relationships with police officials, department heads as well as village heads. It is reasonable to assume that this kind of collusion enabled PT HMBP to operate its plantation outside the boundaries of its concession. Such informal exchanges of favours between companies and state officials are curtailing the capacity of the Indonesian state to monitor and uphold its licensing procedures and the associated protections of Indonesian citizens.

Inadequate informed consent

Once companies have obtained above-mentioned initial licenses, companies set out to obtain the required consent of community members living on or nearby the envisioned plantation. The efforts of companies to obtain this consent usually start with various ‘socialisation meetings’ where company representatives set out their plans, usually accompanied with promises of hiring locals and offers of monetary compensation. When the company plans to implement a joint venture scheme, such meetings serve to paint a (rosy) picture of the profits villagers would receive and how much ‘plasma’ land they would get in exchange for their land. The offered financial compensation for people who have some proof of land ownership is generally very low. In the studied cases this ‘compensation money’ (uang ganti rugi) ranged from 500,000 (about 50 dollars) per hectare in 2004 to 2 million (150 dollars) in 2014, with twenty to forty dollars added for land planted with cash crops such as rubber. At first villagers often refuse such offers, feeling that they either should be getting more compensation or that they might hold on to their land.

Faced with such refusals, palm oil companies employ a range of strategies to obtain the consent of communities. When entering an area palm oil companies generally approach certain villagers – generally those known for either their status (such as the village head) or those individuals known for the capacity to intimidate others, i.e. the local preman (‘goons’). We found that coercion regularly accompanied such efforts to obtain community consent. In 46 (or 31%) of the conflicts that we studied, our informants stated that villagers had been intimidated during the land acquisition process. Often companies circumvent the challenge of obtaining consent from individuals by working directly with village heads. Palm oil companies target these village heads with gifts, trips to Jakarta and monthly allowances as a means to get his or her approval. Stories abound of how village heads provide companies with consent for their whole village – to the dismay of fellow villagers. By providing salaries and regular bribes to such local leaders, palm oil companies are succeeding in making community leaders complicit in the dispossession of other community members.

The result of these various strategies to obtain community consent is that villagers regularly feel cheated out of their land. Of the 150 conflicts that we studied, the majority (99 cases or 66%) concerned grievances about companies obtaining land without consent. In 67 cases (45%), the informants we interviewed claimed that their community had received no monetary compensation at all. As various case studies also illustrate (see for example Colchester & Chao, 2013), the collusion between companies and community leaders is undermining the control of communities over their land, and preventing them from obtaining adequate compensation for the loss of land.

Repressed community protests

This haphazard and sometimes fraudulent and coercive process of obtaining consent of communities sparks conflict. To express their grievances, affected communities are regularly making use of their right to protest: in the process of tracing our 150 conflicts, we managed to document 243 demonstrations, 174 hearings with local politicians and bureaucrats, 98 land occupations and 67 attacks on company property.

While such numbers may suggest that rural Indonesians are making ample use of their rights to protest and hold demonstrations, in practice the collusive relationships between companies and local authorities are also curtailing such political rights. We regularly documented instances of police officials actively siding with companies. This close relationship between companies and local authorities also facilitates the employment of the local police force (sometimes together with hired security and preman, i.e. local goons) to engage in an active repression of community protests. While it is impossible to prove, across our four provinces informants regularly expressed the perception that the palm oil companies bribed the local police in order to get them to suppress demonstrations. We documented 30 demonstrations or blockades that were met with a violent reaction from either the local police, mobile police brigade (Brimob), army or preman (‘thugs’). Police officials or security actors sometimes shoot at villagers during protests. Violent incidents also occurred outside of protest events: we found additional 39 violent incidents by the police, army, company security or thugs outside of protest events. These various violent actions have led to 16 deaths and 195 injured villagers. Such acts of police violence are, to our knowledge, rarely investigated by supra-local authorities. Likewise, we did not find any reports of any disciplinary action being taken against police officers.

This involvement of the police extends to a willingness to arrest community leaders. As our example of the arrest of James, Dilik and Hermanus in the case of PT HMPB illustrates, protesting villagers are regularly arrested and jailed for minor offenses. We found that palm oil conflicts often (in 63 cases or 42%) lead to the arrest and imprisonment of community leaders. In total 743 people were arrested during the course of the conflicts that we studied. This criminalization is an effective tool to prevent further community protests. Such arrests not only force communities to spend their energy on freeing their community members, but they also generate fear for further police repercussions. During interviews, informants regularly commented to us that they eventually concluded that anti-company protest is ‘too dangerous’.

Compromised conflict resolution mechanisms

Collusive relationships between companies and authorities also undermine the effectiveness of available conflict resolution mechanisms. We found that communities make relatively little use of Indonesia’s legal system: in only 40 (or 27%) of the studied cases communities take their grievances to court, where they tend to lose: we could only encounter ten court victories of which nine verdicts remain so far (largely) unimplemented. An important reason why communities tend to avoid the courts also concerns deep-seated suspicions about the corruptibility of judges and the possibility that bribes from companies might influence the outcome (Kouwagam, 2020).

Such illicit exchanges of favours is also weakening a more commonly used conflict resolution mechanism: in 109 (or 73%) of the studied conflicts communities asked local authorities – mostly district heads, department heads and police officials – to mediate or facilitate negotiations between them and the company. Such facilitation generally involves a set of hearings where both community leaders and company representatives are invited. Initial discussions revolve around clarifying the basic facts about, for example, land boundaries or whether and how much compensation has been paid. Our documentation suggests that such alternative dispute resolution headed by local authorities tends to fail: of the 154 mediation attempts by local authorities, only 23 (15%) resulted in an agreement that was subsequently either partial or fully implemented. During interviews, villagers regularly express their disappointment with the role of politicians and bureaucrats, accusing them of organizing these facilitation and hearing sessions merely for media attention and for soliciting bribes from companies.

There are indications that such suspicions are well-founded. In October 2018, Indonesia’s anti-corruption commission KPK caught three executives from Golden Agri Resources (GAR) offering bribes to four members of Central Kalimantan’s parliament (DPRD). These politicians had been investigating community grievances regarding pollution, land grabbing and licence violations involving several of GAR’s plantations in Central Kalimantan. In exchange for a bribe of 240 million rupiah (about 17,000 USD) they promised to cancel a scheduled hearing and drop the issue. In the end, both the GAR executives and the politicians were given two to five years jail sentences for making this deal.¹¹ Such exchanges of favours between palm oil companies and local authorities tend to compromise the neutrality and, hence, effectiveness, of available conflict resolution mechanisms. The result is not only that the (land) claims of communities are rarely adjudicated on the basis of Indonesian law, but rather on the basis of the relative bargaining power of communities and companies – as a range of case studies show (see Afrizal & Berenschot, 2022). Given the weaker capacities and connections of communities, in such a skewed contest communities tend to lose as they generally – in our study in 68% of the studied conflicts – fail to achieve to address their grievances.

In sum, in all these four phases of dipossessionary processes – licensing processes, seeking community consent, community protests, and conflict resolution – informal, collusive relationships between companies, local authorities and community leaders tend to undermine the already limited rights and legal protections of communities. Their exchanges of favours produce de facto rightlessness: while on paper state regulation prescribe rigorous licencing procedures, informed consent, citizen right to protest as well as impartial conflict resolution, in practice such protections of the interests of rural Indonesians are undermined by the regular collusion between economic and political elites.

Conclusion

In this article, we discussed the dispossessionary processes facilitating the rapid expansion of oil palm plantations in Indonesia. We ascribed the relative ease with which companies acquire community land to a combination of curtailed land rights, ‘backdoored’ legal protections and collusion between state authorities and companies. These three factors have resulted in the de facto rightlessness of rural Indonesians. The ineffectiveness of legal guarantees of citizen rights explains the relatively ease with which companies succeed in dispossessing rural Indonesians from their land. Legal backdoors and collusive business–politics relationships are allowing corporate actors to have their cake and eat it too: while palm oil companies are benefiting from the way in which laws and regulations give dispossessionary processes a veneer of legitimacy and respectability, many such companies are avoiding the constraints and obligations associated with these regulations through a combination of legal wrangling and informal machinations.

In discussing this particular ‘regime of dispossession’ facilitating oil palm expansion in rural Indonesia, we aimed to contribute to a comparative analysis of dispossessionary processes. Our analysis yields two striking contrasts with studies of land dispossession elsewhere in Asia. First, it is important to note that in Indonesia, due to the curtailed nature of individual land ownership, corporate land acquisition involves obtaining a government concession rather than the actual purchase of land. In contrast, in countries such as India and China with (some) recognition of individual land ownership, states are employing clauses of eminent domain to obtain land from individual landowners to facilitate urbanization and industrialization (e.g. by establishing SEZ’s), thereby effectively becoming ‘land brokers’ in between individual owners and companies (e.g. Levien, 2018; Andreas et al., 2020, p. 1118; Zhan, 2019; Cai et al., 2020; Zhang & Wu, 2017). In India and China the ownership of land is often actually transferred to companies, while in the case of oil palm expansion in Indonesia (and elsewhere, see for example Pichler & Ingalls, 2021) eminent domain clauses are not invoked and land formally remains in the hands of the state as companies only receive cultivation rights.

Secondly and relatedly, in Indonesia companies play a relatively active role in dispossessionary processes. Whereas, for example, in the case of the establishment of special economic zones in India the state generally takes the lead, employing eminent domain laws to expropriate citizens before handing over this land to companies, in the case of palm oil expansion in Indonesia the actual dispossession takes place after the state has handed over control over land to a company through a concession permit. Consequently, palm oil companies need to be more actively involved in dispossessionary processes in Indonesia. As we discussed in this paper, companies take the lead in efforts to obtain consent, in providing monetary compensation and, if need be, organizing intimidation and coercion. This prominence of companies rather than the state in dispossessionary processes disadvantages rural communities. It disadvantages communities because, first, as we have seen in this article, companies have considerable freedom to circumvent and disregard state regulation. Second, as studies of protest movements against land dispossession in India show (e.g. Levien, 2013 and Nielsen, 2018), when the Indian state and, hence, its politicians are in charge of land use change processes, affected citizens can (sometimes) rely on democratic pressures to halt such projects. In Indonesia, democratic accountability is effectively diluted as politicians can deny responsibility for the actions of companies and, therefore, they are less likely to fear electoral repercussions. As we have seen, this situation allows (some) politicians to play a double game by, on the one hand, publicly expressing concern about the behaviour of companies while, on the other hand, soliciting (campaign) donations from companies in return for refraining from taking effective measures against this behaviour. Despite ongoing efforts of civil society organizations to strengthen land rights, this rather bleak situation is unlikely to change without widespread public indignation and a loosening of the currently rather close ties between business actors and Indonesian politicians.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Nederlandse Organisatie voor Wetenschappelijk Onderzoek [grant number W 07.50.1826].

Notes on contributors

Ward Berenschot

Ward Berenschot is a professor of comparative political anthropology at the University of Amsterdam and a senior researcher at KITLV. Studying politics in India and Indonesia, he is the author of Riot politics: Hindu-Muslim violence and the Indian state (Hurst/Columbia University Press, 2011) and Democracy for sale: Elections, clientelism and the state in Indonesia (Cornell University Press, 2019, with Edward Aspinall).

Ahmad Dhiaulhaq

Ahmad Dhiaulhaq is a senior researcher at Research Institute for Humanity and Nature (RIHN), Kyoto, Japan. He holds a PhD degree in Natural resources, Environment and Development from the Australian National University (ANU). His research has been focusing on forest and land governance in Indonesia and broader Southeast Asia.

Notes

1 To ensure reliability, we dropped all cases for which we found less than six reliable sources and for which no interviews could be conducted.

2 In this sense, our analysis constitutes an intriguing counterpoint to Lund’s analysis of how claimants in land disputes engage in strategic invocations of the law to claim ‘an air of legality’ (Lund, 2020). Whereas Lund analyses the strategies that companies and individuals employ to deal with a situation of legal uncertainty (and the absence of realizable citizen rights), our analysis starts at the other end: we focus on how and why this kind of legal uncertainty is produced.

3 Such as The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), the Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights, the Convention on the Elimination of All Forms of Racial Discrimination and the Convention on Biological Diversity.

4 The 2007 Law on spatial planning as well as the 2014 plantation law.

5 Over the years, the names and character of these joint venture schemes changed, see Potter (2016).

6 Of relevance for establishment of oil palm plantations are, for example Regulation of the Minister of Agrarian and Spatial Planning/Head of the National Land Agency No. 5 of 2015 concerning Location Permits as well as Regulation of the Minister of Agrarian and Spatial Planning/Head of BPN No. 7/2017 concerning Regulations and Procedures for Granting of Business Permit (HGU).

7 Erbaugh and Nurrochmat (2019) used the term ‘policy layering’ for the backdooring of policies regarding forest protection, while Kunz et al. (2017) use the term ‘multiple layers of conflicting regulations’.

8 Since the paramount laws guaranteeing these rights and protections remain in place.

9 This is the Regulation of the Minister of Agriculture No. 98/2013, Article 15.

10 Regulations of the Ministry of Environment and Forestry P.32/2015 on Forests Subject to Rights (hutan hak); P.21/2019 on Adat Forest and Forests Subject to Rights (hutan adat dan hutan hak); and the latest P.17/2020 tentang Adat Forest and Forests Subject to Rights.

11 See Forest Peoples Program (2020).