Extraction and deforestation: It takes two to tango

The Indonesian archipelago hosts much of the globe’s remaining humid tropical forests, and policy research has documented the role of the expanding agricultural frontier and logging economy in their rapid loss. Frequently, this loss of forest is accompanied by rights violations against local communities.

Extraction and deforestation: It takes two to tango AFP Photo/Chaideer Mahyuddin

The Indonesian archipelago hosts much of the globe’s remaining humid tropical forests, concentrated especially in the Papua, Kalimantan and Sumatra regions. While the fiber, logging and palm oil industries have been the principal proximate drivers of Indonesian land cover change, investments in resource extraction and infrastructure have also led to forest loss, greenhouse gas emissions and rights infringements in forest communities.

Their future impact on forests may be far greater. Most of Indonesia’s coal reserves are located in East Kalimantan, South Kalimantan and South Sumatra provinces, and recent Indonesian governments have promoted large-scale infrastructure investment in support of extractive industries and other natural resource-based economic development, by linking resource extraction to domestic and international commodity and energy markets.

This essay is a small part of a larger study commissioned by the Climate and Land Use Alliance to explore the impacts of extractive industries and infrastructure on forest loss and degradation and community rights in the Amazon, Mexico and Central America, and Indonesia. The Indonesia study, together with studies of the other regions, can be accessed at http://www.climateandlandusealliance.org/ reports/impacts-of-extractive-industry-andinfrastructure- on-forests/.

Investment drivers

A combination of global, national and subnational factors leads to growth in investment in the extractive industries and infrastructure. These factors include:

Global commodity prices and demand. High international gold prices, together with lack of livelihood alternatives, attract increasing numbers of people into artisanal and smallscale gold mining (ASGM). Continuing high levels of demand for Indonesia’s coal, especially from China and India, encourage investment in coal mining. Global finance, especially from China, has increasingly flowed into infrastructure and extractive industries.

National-level development ideologies and elites. Policies continue to emphasize natural resource extraction as central to Indonesia’s development, and national elites who have become economically and politically powerful from investing in these sectors advocate strongly for them. Policies to increase coalbased electricity generation as part of a strategy to increase national energy production and broaden access to energy will increase domestic demand for coal. Growing resource nationalism has strengthened the position of nationally owned coal companies, many of whom also invest in coal-based electricity generation plants. The mining sector is assisted by corruption and tax evasion, which ease companies’ and ASGM miners’ access to mining licenses, increase profit rates and protect the illegal export of minerals.

National development plans. National spatial plans make explicit commitments to infrastructure resource extraction synergies. The Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) during President Susilo Bambang Yudhoyono’s administration sought to develop Kalimantan as a center for mining and energy production, while the plan emphasized oil and gas, coal and oil palm in Sumatra. The “special economic areas” and “strategic development areas” of the current administration of President Joko Widodo maintain this focus. Priority export commodities include seven minerals, coal and the products of large-scale plantations. Infrastructure is considered an enabling condition for the achievement of economic growth targets. The government has created financing instruments to facilitate investment in these areas.

Decentralization to subnational authorities. In the years following Indonesia’s transition to democracy in 1999, or reformasi, regional authorities began to issue large numbers of mining licenses, frequently in 

Where mining concessions overlap with other types of concessions, as many do, forest loss increases substantially.

forested areas and overlapping with natural resource concessions, in return for financial contributions. Subnational authorities and branches of the military have eased the growth of ASGM in return for payment or profit sharing.

Impacts on forests and rights

Resource extraction and infrastructure have both direct effects on forests and indirect impacts, because they also facilitate the expansion of the oil palm, fiber and logging sectors. Among different extractive industries, coal mining and ASGM have had the most significant impacts on the country’s forests and greenhouse gas emissions. Estimates suggest that some 1.5 million Indonesians live from ASGM and are spread across the archipelago. Indonesia is the world’s largest exporter of thermal coal and significant increases are planned in domestic electricity generation by coal-fired power plants. The emissions from increased coal burning will reduce Indonesia’s ability to meet its nationally determined contributions to the United Nations Framework Convention on Climate Change targets.

To date, mining has had limited impact on forest loss. Between 2000 and 2010, Sumatra, Kalimantan, Sulawesi, the Maluku Islands and Papua lost approximately 36.3 million acres of forest in total, with only 2.1 percent of this loss occurring within mining concessions. Rates of forest loss in coal mining concessions are, however, similar to those in oil palm concessions, and where mining concessions overlap with other types of concessions, as many do, forest loss increases substantially. Auriga, an Indonesian nongovernmental organization, estimates that 4.3 million acres of forest are affected by current coal mining, including 2.7 million acres that are designated as “conservation” and “protection” forests. Fern, a Europe-based nongovernmental organization, estimates that 9 percent of Indonesia’s remaining total forest cover is threatened by future coal mining permits.

While the coal value chain can generate livelihood opportunities and energy access for some, coal mining is also associated with the violation of community and community members’ rights in areas located near to or downstream from mine sites. These include violations of rights to land and security, prior consultation, self-determination, life and physical integrity, and a healthy environment. In 2016, Indonesia’s National Commission on Human Rights concluded that 27 deaths occurred at former coal mining sites between 2011 and 2016 in East Kalimantan Province.

Alluvial ASGM involves dredging and the permanent removal of forest cover by migratory strip mining over the land surface. Impacts on forests are far more widespread than from hard-rock mining. The illegality or informality of ASGM limits community mechanisms to hold such mining accountable. There is also a significant presence of ASGM in conservation forests.

Extraction synergies and forest loss The primary impacts of infrastructure on forests are indirect due to synergies with oil palm cultivation, mining, smallholder agriculture, logging and other activities catalyzed by infrastructure. These impacts can be extensive. An environmental assessment of the potential impacts of MP3EI estimated the value of Indonesia’s national “natural capital at risk” as a result of the master plan to be approximately $470 billion annually, though actual impacts were expected to be lower. The largest impacts on natural resources would be in the Kalimantan, Sumatra, Papua and Maluku regions. President Joko’s economic stimulus package number I-XIII is mostly a reworking of MP3EI, so these earlier cautions and aggregate assessments remain relevant.

Planned investment in thermal power plants in different provinces brings the point of demand closer to the coal mine, facilitating mine expansion. In a similar vein, the proposed 264-mile Central Kalimantan railway project would allow up to 50 million tons of coal to be shipped out of the province’s rain forests every year, taking the coal to ports from where it would be shipped for export or sent to power plants in Java. This would open up significant portions of new forest to coal mining and other extractive industries. A consortium led by the China Railway Group in April 2014 won the ender to develop the project, although the investment is currently on hold.

Recent historical experience suggests that infrastructure projects have been a significant driver of displacement and have weakened community rights in favor of resources. The International Consortium of Investigative Journalists estimates that World Bank-financed projects in Indonesia displaced at least 11,352 people between 2004 and 2013. The three projects that displaced the most people were related to resource extraction and infrastructure: a hydroelectric power project, a road infrastructure project and a gas market development project.

Responses to forest loss and rights violations

There have been many responses to the problem of forest loss and degradation in Indonesia, but relatively few of these address the specific roles of extractive industries and infrastructure. Regulations around safeguards (based on Law No. 32/2009) and efforts to harmonize regulations, particularly through the “One Map” initiative that aims to address conflicting property and concessions claims, indicate efforts by the government to respond to perceived challenges of overexploitation of resources and negative socio-environmental impacts from extractive industries and infrastructure.

However, the initiative faces challenges in compiling accurate and up-to-date information about land-based permits, and there are no current national maps for customary lands or village borders. A separate online map (Peta Indikatif Alokasi Perhutanan Sosial) has been launched describing areas of

Recent historical experience suggests that infrastructure projects have been a significant driver of displacement and have weakened community rights in favor of resources.

forest that have been allocated and proposed for social forestry, yet indicative sites have not been incorporated into the larger One Map. Should the One Map plan ignore or erase indigenous communities’ land tenure claims it is likely to pose more social problems than it solves.

A Constitutional Court ruling in 2013 that customary forest is private forest outside of the state forest zone became a significant starting point for the state to acknowledge the rights of indigenous and local communities in forest and land management, and eventually for contributing to resolving land conflicts connected to forest status. At the same time, these efforts often fall short in the context of limited resources for implementation, oversight and enforcement, and persistent corruption. Civil society organizations have been important in advocating for increased transparency and in advancing tools, including spatial visualization and community boundary demarcation, to demonstrate to the public the extent of impacts and generate debate and advocacy, which in turn influences government action. They have also employed litigation as a means of addressing environmental and rights violations.

A range of challenges continues to face civil society and public organizations addressing forest loss and rights violations due to investment in resource extraction and infrastructure. Monitoring of extractive industries remains weak, due in part to a lack of resources (including adequately trained
staff ), but also because of patterns of political patronage that undermine government-mandated programming. Local communities could play a greater role in monitoring, although the legal aid offices that could provide training and support are consistently underfunded. The media can play a greater role in exposing land-use infractions related to extractive industries and infrastructure, although journalists’ lack of access to mining sites, paired with companies’ power over newspaper advertising budgets and, sometimes, local communities, make such reporting difficult. Nevertheless, this type of reporting has been important in bringing attention to issues of rights violations around mining in particular.

Rarely do responses address the extractive infrastructure- forest rights relationship as an integrated problem. Some organizations work on extractive industries, fewer on infrastructure, and very few on the ways in which synergies between these two sectors operate and affect forests and community rights.

The authors of this is essay ’s authors are: Sumali Agrawal, Anthony J. Bebbington, Aviva Imhof, Mai Jebing, Nonette Royo, Laura Aileen Sauls, Rini Sulaiman, Tessa Toumbourou, and Arief Wicaksono.

Anthony J Bebbington was part of an Indonesia, United States and Australia-based team coordinated from Clark University in Worcester, Massachusetts.

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