RSPO and HCV problems

Report of an independent investigation into the effectiveness of the application of High Conservation Value zoning in palm oil development in Indonesia

Marcus Colchester, Patrick Anderson, Norman Jiwan, Andiko and Su Mei Toh

Public Discussion Document

October 2009


Executive Summary:
The RSPO procedure, as set out in its ‘Principles and Criteria’ and the various national interpretations, seeks to encourage voluntary efforts by companies to identify and avoid clearing areas of ‘high conservation value’. HCV areas include areas critical to maintain rare and endangered species, ecosystems and landscapes, secure essential environmental services and areas critical to local livelihoods and cultural identities. Companies are also expected to manage their plantations so that all these high conservation values are maintained or enhanced. The overall aim is to deflect palm oil expansion away from these valuable areas. In August 2009 preliminary reports from the field suggested that these objectives were being frustrated in Indonesia and it was agreed that an investigation should be carried out to examine the extent of the problem and suggest how it might be addressed.

This report presents the results of this investigation. Based on a detailed legal review and a field study of the situation in West Kalimantan, the main conclusions of this study are the following:
• Extensive HCV areas identified by RSPO member companies are not being protected but are being re-allocated by local government to other companies:
Some RSPO member companies have invested a considerable amount of resources, time and effort in identifying High Conservation Value (HCV) areas and areas important for local livelihoods. These efforts have delayed land acquisition, clearance and planting. These delays have meant that companies have exceeded the permitted three-year period for preparing their areas prior to them securing their final leases. Overriding appeals by the companies, local government officials have chosen to terminate these permits and/or restrict the areas permitted to these companies and have re-allocated parts of these areas to other companies including non-RSPO members, some of which are allegedly clearing lands including HCV areas.

Although some of the delays have arisen from the novelty of RSPO procedures and the need to build up capacity in both consultancies and company management, it is likely that similar situations will arise in future. Normal permitting procedures are anyway onerous and the additional requirements of compliance with RSPO standards are time-consuming.

• HCV areas are being relinquished by companies
The study also found that RSPO member companies are choosing to relinquish substantial HCV areas identified in their initial permited areas and are handing these HCV areas back to the government. They are doing this to avoid burdensome taxation, to reduce the size of the corresponding areas that they are obliged to develop as smallholdings and to make it easier to comply with the RSPO requirement that they manage HCV areas that are within their permits. However, HCV areas so released by the companies can be reallocated to other companies, who may not be RSPO members and who have no obligation to maintain or enhance HCVs.

• HCV areas are not legally secure
Indonesian law makes no explicit provision to protect HCVs although the study identified a number of laws and regulations which could potentially be used to strengthen HCV protection. However, the laws as current applied do not secure HCV and RSPO: results of an investigation HCV areas. When companies hand back HCV areas identified in their izin lokasi to the government, these areas are not given any legal protection and can be allocated to third parties. Areas which the companies identify as under community ownership, or which are essential or critical to local livelihoods (HCV 5) and critical to cultural identity (HCV 6), are considered community lands. These areas may also not be included in final company leaseholds (HGU). Because community lands are not secured by law, these HCV areas are also vulnerable to reallocation to third parties. When HCV areas are retained within HGUs but are not planted, they may be secure for the duration of the permit (mean of 30 years, subject to renewal), but at the expiry of the lease these areas revert to the State, are not automatically accorded any legal protection and are then available to be allocated to other companies again. Areas of importance to communities, including HCVs 5 and 6, that were retained in HGU revert to the State and not the community at the expiry of the lease and are also then not secure.

In sum the intended result, that the application of the RSPO standard will secure HCV areas, is being frustrated by the ill-fit between the RSPO process and the policies, laws, regulations and procedures of the Indonesian government. The report makes a number of specific recommendations on how this situation can be remedied: by amending laws and regulations, by changing the way existing procedures are applied, by providing additional information to local authorities so they apply their discretionary powers more judiciously and by improving the guidance given to operators in the RSPO Standard, the National Interpretation for Indonesia and the Indonesian HCV Tool Kit. These are offered more as recommendations for discussion than prescriptions for next steps.

It is also recommended that RSPO tasks one of its sub-committees or working groups to deliberate these recommendations, suggest ways forward and assess how widespread these legal and procedural obstacles to compliance with the RSPO P&C are, not just in Indonesia but also on other palm oil producer countries.