Updated: June 2, 2011
In 2010, the Indonesian government announced ambitious plans for a national REDD+ strategy. The strategy includes diverting new oil palm plantation development onto “degraded lands” instead of expanding production into natural forests in order to achieve the nation’s low carbon, forest protection, and agricultural development goals. To support this strategy, WRI’s Project POTICO is mapping degraded lands, piloting land swaps that steer planned plantations away from natural forests, and providing policy analysis and advice to decision-makers, the oil palm industry, and other stakeholders. In the following, we respond to some frequently asked questions about utilizing degraded or “low carbon” lands for oil palm while sustaining natural forests.
1. What is Project POTICO?
Through Project POTICO, the World Resources Institute (WRI) aims to enable sustainable oil palm expansion in Indonesia in a manner that avoids deforestation and greenhouse gas emissions, while benefiting local people and promoting economic development. To accomplish this, Project POTICO seeks to divert planned oil palm plantations in Indonesia away from natural forests and toward degraded or low carbon areas with high potential for sustainable expansion, while bringing the forests that were slated for conversion under conservation or sustainable management.
The project is pursuing a simultaneous two-prong strategy:
- Pilot. We are pursuing pilot projects in the field to demonstrate the viability of diverting oil palm to degraded land, identify road blocks, and develop solutions.
- Scale up. We are engaging policymakers to generate political and financial support for the degraded lands utilization strategy and we are building systems to scale up adoption of the approach. Insights and experiences from the pilot work are informing the scale up strategy.
2. What is degraded land?
Degraded land is land that has lost some degree of its natural productivity due to human-caused processes. However, there is no single internationally-approved definition of “degraded land”.
In the context of developing policies to reduce emissions from deforestation and forest degradation (REDD+), degraded land refers to areas with low carbon stocks. These areas typically have minimal tree cover and an absence of peat, so they do not contain or sequester as much carbon as natural forests do. For example, according to Indonesia’s draft national REDD+ policy: “Degradation is the change in the forest that has negative impacts on the structure or function of stand or forest land, so that it reduces the forest capacity to provide forest services/products. In the REDD+ context, degradation may be interpreted as the forest carbon stock degradation.” The draft REDD+ policy suggests a threshold of 35 tonnes of carbon per hectare (C/ha) below which development could be considered “low carbon”. Lands with less than 35 tonnes of carbon per hectare usually imply no forest cover.
Government officials, private companies, NGOs, and academics have used the term “degraded” in multiple contexts to describe land with a wide variety of characteristics. General terms that have been used interchangeably with “degraded land” include:
Degraded forest – secondary or selectively logged forests that provide reduced levels of ecosystem services, including but not limited to carbon storage. Ecologists and environmental NGOs are concerned that allowing the conversion of these forests could result in significant carbon emissions as well as lost “co-benefits” such as biodiversity preservation.
Marginal/waste land – areas with low agricultural productivity and economic potential. Companies are concerned that these areas would be unprofitable to develop.
Idle/unused/abandoned land – areas that are devoid of human activity or not being used productively, often from a legal standpoint. These terms are controversial because legal designations do not always consider existing local or traditional rights, claims, or uses.
In Indonesia, related legal terms include:
Lahan kritis (literally “critical” land, often translated as “degraded”) — land legally designated as having reduced ecological functions by the Ministry of Forestry, based on biophysical characteristics.
Tanah terlantar (unused/abandoned land) — land on which a permit has been issued but has not yet been utilized by the permit-holder.
Lahan tidur (idle land, set-aside lands, literally “sleeping” land) — areas that are considered unproductive according to national or provincial regulations.
Nongovernmental organizations (NGOs) have their own definitions, too. For instance, a WWF study defines degraded land as land where the native vegetation has been altered by human activity resulting in a reduction in tree canopy cover, standing biomass or species diversity from which the system cannot recover unaided within a defined time period (Fairhurst and McLaughlin 2009).
Under WRI’s Project POTICO, degraded land refers to areas that were cleared of forests long ago and that now contain low carbon stocks and low levels of biodiversity (e.g., are not high conservation value areas), and are not currently used for productive agriculture or human habitation.
Note that, for this definition, degraded land is not strictly degraded “land.” The area does not necessarily have poor soil quality. Rather, it has degraded “land cover”; the area’s ecosystem is degraded relative to what was there before—in the case of Indonesia, tropical rain forest. Alang-alang grasslands (Imperata cylindrical) can be an example of such degraded lands in Indonesia (see photo). According to a detailed economic analysis conducted by WWF and fieldwork and related analyses carried out by WRI and its local partner Sekala, many of these areas have suitable soil for oil palm cultivation and can produce comparable yields relative to recently deforested land.
WRI uses “degraded” to describe the biophysical status of a tract of land. But further assessment is required to determine whether or not a particular tract of degraded land has potential for sustainable oil palm plantations. To do this, we apply screening criteria to assess the tract’s environmental suitability, economic viability, social acceptability, and legal availability for oil palm. For more about this approach, see http://www.wri.org/stories/2010/07/degraded-land-sustainable....
3. How much degraded land is there in Indonesia?
Since there is no single definition of “degraded land,” estimates of the extent of degraded land in Indonesia vary widely. As a result, the extent, location, and status of Indonesia’s degraded land remain unclear. Many quoted estimates do not include sufficient information regarding how the estimates were calculated, or which definitions were used. In many cases, estimates refer to legal land status rather than actual physical conditions on the ground (e.g., tree cover, carbon stock levels). Recent estimates of the extent of degraded land in Indonesia include:
6 million hectares of degraded land “available for oil palm expansion” according to a senior official of the Indonesia Investment Coordinating Board (Reuters 2010).
7 million hectares of unused/abandoned degraded land (“tanah terlantar yang kondisinya sangat kritis”) according to Ministry of Forestry (February 2010).
8.5 million hectares of alang alang grassland (Garrity 1997).
7-14 million hectares of degraded, abandoned lands that may be used for agricultural development according to Fitrian Ardiansyah, director of climate and energy WWF-Indonesia, (Jakarta Post 2010).
12 million hectares of “idle land” the National Land Agency (BPN) indicates could be used for business purposes, according to the Forestry Minister (Jakarta Post 2010).
14 million hectares of land that can likely be considered “low carbon” according to a suggested threshold value of 35 tonnes C/ha and is located in areas that are not legally designated as conservation or protected forest areas (Greenpeace, 2010).
31 million hectares of “unused land” considered “suitable” and “available” for agriculture (Agricultural Research & Development Body 2007, cited in Indonesia’s draft REDD+ policy).
40 million hectares of “degraded forests” within the forest estate according to the Forestry Minister (Jakarta Post 2010).
When assessing the amount of degraded land potentially suitable for sustainable, low-carbon oil palm plantations, it is important to focus on the land’s physical status, carbon content, and current use, rather than its legal status.
4. What role could degraded land play in curbing deforestation associated with oil palm plantations?
Restoring and utilizing degraded lands ― instead of clearing natural forests― for oil palm plantations provides an opportunity to continue agricultural expansion in a sustainable manner while avoiding deforestation. When considering permits or licenses for the expansion of the palm oil industry, degraded land utilization has two potential roles to play. First, oil palm permits that have already been allocated on tracts of natural forests but that are not yet active could be re-allocated to tracts of degraded land. When combined with a strategy for ensuring that the forest previously slated for conversion is conserved or sustainably managed, such a “swap” could curb deforestation while allowing for oil palm expansion. Second, future oil palm permits could be allocated from the start on degraded lands instead of on natural forests.
It is important to remember, however, that just because a tract of land is degraded does not necessarily mean that the area is acceptable for sustainable palm oil expansion. There is a significant and growing consensus—as reflected by growing industry participation in the Roundtable on Sustainable Palm Oil (RSPO) and in recent government statements—that there is a need to balance environmental, economic, and social concerns in order to ensure that the expansion of oil palm plantations is “sustainable.” For example, a tract of degraded land might not be close enough to transportation infrastructure to make palm oil production and delivery to market feasible. Or local communities may already be using the degraded land for other purposes and may not want it converted to an oil palm plantation. Identifying degraded areas with high potential for sustainable expansion will require that policy-makers develop a participatory decision-making process informed by accurate and up-to-date spatial data that addresses environmental, economic, social, and legal considerations.
5. What are some of the road blocks to implementing an effective national REDD+ strategy for achieving low carbon oil palm plantation development?
A number of road blocks exist, including:
Inappropriate definitions of “degraded land”. Definitions fit within a context. The definition of “degraded land” in the context of sustainable oil palm development may be―rightly so― different from that in the context of forest restoration. However, the multitude and imprecision of definitions can lead to confusion and lack of clarity among public and private sector decision-makers. Furthermore, using one definition out of its relevant context could lead to perverse outcomes, such as clearing secondary forests which may be “degraded” from a commercial timber perspective but not from a carbon or biodiversity perspective.
Lack of publicly accessible data on land cover, land use, licenses for oil palm plantation development, land status, and land rights that can be used to identify degraded lands suitable for sustainable oil palm. In order to make informed land use decisions, policymakers, companies, civil society, and communities need to know where such degraded lands are located and what other licenses and rights exist across the landscape. Although WRI and Sekala have mapped degraded lands with potential for sustainable oil palm according to biophysical and economic criteria in West Kalimantan (Figure 1), such lands have not yet been identified across the entire Indonesian archipelago.
Inexperience with establishing oil palm plantations in accordance with best practice social procedures. For an oil palm plantation to be sustainable, it needs to be on degraded lands that are not only physically suitable and economically viable but also socially acceptable to local communities. This is an important consideration because degraded lands, especially in a populous country like Indonesia, are rarely devoid of people who have claims on the land, water, trees, wildlife, and other aspects. And it is for this reason that some oil palm companies opt to clear natural forests―which often have fewer and less organized communities―when establishing new plantations. In short, it reduces the chances of stirring up costly conflict.
There are few documented examples of oil palm permitting and plantation establishment that have utilized best practice social procedures, which should include free, prior and informed consent (FPIC). In addition, developers claim that they often lack resources, skills, and sometimes motivation to go through the FPIC process. Practical approaches and technical support for communities and companies with FPIC are needed (for more, see “What is Free, Prior, and Informed Consent,” below).
Zoning that precludes sustainable oil palm expansion. This roadblock is one of the most significant. Some degraded tracts of land that are physically suitable, economically viable, and socially acceptable for sustainable oil palm may not be currently legally available for oil palm development. In particular, field research conducted as part of Project POTICO has found that some of these degraded areas are zoned as “Forest Estate” (“Kawasan Hutan”) ― despite being devoid of trees. According to Indonesian law, Forest Estate lands cannot be utilized for agricultural uses.
Some tracts of low-carbon degraded land within the Forest Estate, however, could be rezoned as “Non-forest Estate” (“Areal Pengunaan Lain” or APL) and thereby become eligible for oil palm development. As part of this process, it would be important that the rezoning procedures engage local communities and recognize customary tenure in order to respect community needs and avoid social conflicts.
Nevertheless, there can be disincentives to such rezoning, some of which involve potential financial losses to powerful actors:
- First, rezoning can be cumbersome and time consuming, involving multiple levels of government. While degraded land outside the Forest Estate can be allocated for oil palm plantations by district authorities, land inside the Forest Estate must first be “released” by the Ministry of Forestry before plantation development can take place.
- Second, rezoning a tract of degraded land could entail that the Ministry of Forestry “loses” hectares under its jurisdiction, unless a similar-sized tract of natural forest currently outside the Forest Estate is simultaneously zoned “Forest Estate”― essentially a zoning “swap”.
- Third, rezoning could generate unequal benefits between districts or provinces. While land or permit swaps within the same district would lead to no net change in forest versus agricultural land, swaps between districts or provinces could result in one district or province gaining oil palm plantation development potential and the associated economic benefits while the other party in the swap loses such potential.
Lack of transparent permitting procedures. This roadblock, likewise, is very significant. Interviews with representatives of a number of oil palm plantation companies operating in Indonesia highlighted that permitting procedures are too often unclear, inconsistent, and not transparent. Case studies show that permits are often issued without considering existing uses and rights of local communities. There are anecdotal reports of corruption, such as informal payments, during the permitting process. And the time involved with permitting can be lengthy, in some cases years, and thus there is an incentive to find other means to expand production.
Lack of options and incentives for keeping forest as forest. When it comes to land or permit swaps, the natural forest previously slated for conversion likely will not be “saved” unless incentives, strategies, or enforced policies are in place to conserve or sustainably manage that forest over the long term. Such measures are currently not sufficiently utilized.
Lack of monitoring. In order for a low carbon palm oil expansion strategy to be effective, stakeholders such as palm oil buyers, governments, non-governmental organizations, and international financiers and investors need to be able to identify implementation shortfalls (e.g., a tract of degraded land is not converted to oil palm as planned, or the “saved” forest becomes cleared) and take corrective action. Likewise, oil palm growers need to know that on-the-ground activities are being monitored—that is, there is a deterrent to clearing new forests. A monitoring system that provides this information in a timely manner does not yet exist.
6. What steps, regulatory and otherwise, could help address these road blocks?
A number of steps would help address these road blocks, including:
Clarify the definition of “degraded land” for the context of sustainable oil palm development. Governments, companies, civil society, and communities should agree upon a description or definition of “degraded land”―one that can be mapped and that advances the goal of sustainable oil palm development. Because the context of sustainable oil palm is one of reducing greenhouse gas emissions from deforestation and forest degradation, the definition of “degraded land” should refer to areas with low carbon stocks and minimal tree cover, and thus should include a threshold for carbon content or, at least as a proxy, tree cover.
There are three caveats to note. First, the definition of “degraded land” describes only the biophysical status of land. Second, whether or not a particular tract of degraded land has potential for sustainable oil palm expansion will be a function of other parameters. For instance, it needs to be economically viable, socially acceptable, and legally available (see point 2 below). Third, not every tract of degraded land will meet these additional criteria.
Develop, and make publicly available, a system for identifying and mapping degraded lands with high potential for sustainable oil palm expansion. Although some screening criteria, such as social acceptability, are difficult to map and can only be determined through site-specific fieldwork and community engagement, publicly available maps of degraded areas that fulfill physical and economic criteria can provide a common starting point for land use decisions. These maps could comprise the “degraded land database” proposed by the Indonesia/Norway Letter of Intent signed in May 2010. Ensuring public access to this accurate, up-to-date spatial data would provide all decision-makers with a common basis for taking actions—and engaging in constructive dialogue—regarding the development of degraded land. As part of developing such an identification system, refined estimates of carbon stocks of different land types should be developed across the major Indonesian islands.
Develop guidance for permitting and establishing oil palm plantations in accordance with best practice social procedures. Government agencies and oil palm growers need practical, step-by-step guidance on best practice stakeholder engagement procedures, including community mapping for relevant communities and legal support to meet FPIC objectives and approaches, complemented by case examples.
Clarify and simplify mechanisms for changing the legal status of land, such that high potential areas can become legally available for agriculture, following a participatory and transparent process that respects existing rights and includes conflict resolution mechanisms. There are currently several mechanisms that can be used to allow change in the legal status of land such that Forest Estate could become Non-forest Estate or vice versa. Which one to use depends on the initial classification of land within the Forest Estate and other administrative elements, not on the actual physical characteristics of the land.
Government Regulation No.10 of 2010 sought to clarify these mechanisms. Further regulations, such as Minister of Forestry Decree No.33 of 2010 regarding the process to change the status of conversion forest (“Hutan Produksi yang dapat di Konversi” or HPK) and Minister of Forestry Decree 32 of 2010 regarding the forest exchange mechanism, provide additional procedures that should be conducted in order to change the legal status of land.
However, what is currently lacking is the necessary clarity regarding how these regulations are to be implemented. In particular, what is needed is a rezoning process that has a very clear articulation of the chronological steps involved, that is transparent (e.g., so developers and communities know the progress of the application in the process), that has a clear timeline for approval/disapproval at the various stages and government levels, that has a transparent articulation of the reasons for approval or disapproval, and that includes a process for respecting existing rights and thereby reduces the risk of social conflict.
These procedures are being piloted by Project POTICO.
Establish a transparent and participatory permit allocation and revocation process. One of the most effective strategies for addressing lack of clarity and rent seeking in land use decision-making processes is transparency and stakeholder engagement. Thus, issuing oil palm development permits should follow a process that incorporates best practice stakeholder engagement, including obtaining free prior and informed consent of relevant communities and using appropriate conflict resolution mechanisms.
Furthermore, in locations where existing permits for oil palm development can be shown to be illegal through a transparent review process, the government could revoke them. For instance, where existing plantation licenses or pending applications lie on peat soils with a depth greater than three meters, such licenses could be revoked under provisions of the Ministry of Agriculture Regulation 14/2009, Presidential Decree 32/1990, and Government Regulation 26 /2008.
Accelerate utilization of measures to promote forest conservation and sustainable local management of forests. In the past, designating areas as “protected” has often not been sufficient to maintain forest cover. However, forests are more likely to be maintained when they generate local benefits. Several complementary strategies could help achieve this goal. For instance, community-based forest management could generate livelihoods benefits through sustainability-certified selective timber harvesting, non-timber forest products, agroforestry, or carbon revenues. Such management is permitted by Indonesian law and has been encouraged. At the same time, the government could support the utilization of Ecosystem Restoration Concessions (ERCs), which have the potential to attract investment for forest conservation and restoration, and to provide revenue through environmental markets. Furthermore, government agencies could increase enforcement of protected forests and conservation forests.
Develop a forest monitoring system. A publicly available, web-based forest cover monitoring system needs to be developed that allows investors, buyers, government agencies, and non-governmental organizations to monitor and verify oil palm growers’ adherence to the degraded land utilization strategy. Such a system could use satellite imagery to identify changes in forest cover on an annual or more frequent basis.
Combined with data on the location of degraded lands, natural forests, and concession boundaries, this system could be used to determine whether or not oil palm growers are using degraded lands, are following through on commitments to not develop forests that are “saved” via land swaps, or are moving into natural forests. Conversely, this system would enable responsible oil palm companies to demonstrate to customers and financiers that their plantations adhere to the law and sustainability criteria (such as those provided by the Roundtable on Sustainable Palm Oil), providing an opportunity for markets to reward responsible actors.
7. What is WRI doing to address these road blocks?
Along with project partners, WRI is currently working on developing three products designed to address many of the aforementioned road blocks. These products include:
Degraded lands identification system. WRI is designing, developing, and promoting a methodology for identifying degraded lands with high potential for sustainable oil palm expansion. The full methodology, which will be detailed in a publicly available report, includes both a desktop and fieldwork component. The methodology will be accompanied by a free website that enables users to identify high potential areas throughout Indonesia and prioritize field sites. The website will allow users to apply pre-determined screening criteria and user-defined parameters to generate maps of degraded land with high potential for sustainable oil palm expansion and prioritize areas for site-specific field assessments. Essentially, the system will standardize, make user-friendly, and mainstream the desktop portion of the methodology we developed for the Indonesian province of West Kalimantan.
The system has multiple target users. For instance:
- Governments and spatial planners when redoing land use plans and zoning
- Oil palm companies when finding tracts of degraded land for their future oil palm plantations
- Investors when making investments in sustainable palm oil
- Buyers when negotiating with suppliers to ensure or encourage suppliers to site only on degraded lands.
This system is designed to address roadblocks 1 and 2 above.
A “how to” guide. Based on our field experience in West Kalimantan, we will publish and promote a “how to” guide for utilizing degraded lands for oil palm expansion. The guide will offer practical, step-by-step guidance to oil palm companies and government officials. It will provide technical advice on spatial decision-making for degraded land and detail how to permit and develop plantations on degraded lands in accordance with best practice social and environmental processes―including community mapping and FPIC. Furthermore, the guide will recommend changes to Indonesian law to facilitate improved land utilization and land swaps.
The guide is designed to address roadblock 3 and inform processes for addressing road blocks 4 and 5 above.
A forest monitoring website. WRI will develop a publicly available Indonesian forest cover monitoring website that allows investors, palm oil buyers, government agencies, and nongovernmental organizations to monitor forest cover change and oil palm plantation establishment. The system will use historic (back to year 2000) and current satellite imagery to identify changes in forest cover on an annual basis. Combined with data on concession boundaries, this system could be used to determine whether or not oil palm companies are using degraded lands, are following through on commitments to not develop natural forests, have plantations that meet RSPO criteria (e.g., the plantation did not clear forests after 2005), and other features. This system is designed to address road block 7 above.
8. What is Free, Prior and Informed Consent (FPIC)?
Free, prior and informed consent (FPIC) is an important way of upholding indigenous peoples’ right to determine their own development paths. Many indigenous peoples have lived on the same land for hundreds of years, relying on that land for their livelihoods and self-identity. The 2007 United Nations Declaration on the Rights of Indigenous Peoples states that these peoples “have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired.”
FPIC refers to a collective expression of support for a proposed development project by indigenous people potentially affected by the project, reached through an independent and self-determined decision-making process undertaken with sufficient time, and in accordance with their cultural traditions, customs and practices. The FPIC principle implies that, whatever the form of consent, it must be free of coercion; obtained prior to the commencement of any project activities; and informed through access to all the information necessary to make the decision, including knowledge of legal rights and the implications of the project. Such consent does not necessarily require support from every individual.
FPIC-like processes should be applied where communities are comprised of non-indigenous people, too. The circumstances in which FPIC should be applied depends on a number of factors including the length of time the community has resided on the land, the nature of their claims, and the existence of strong community relationships and decision-making structures. FPIC-like processes ought to include community mapping, legal rights mapping, and collective community bargaining processes.
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