Palm Oil Industry Leaves Indonesian Village Struggling With Loss and Regret

In the village of 1,200 residents, rows of houses sit low to the ground beside the water, buttressed on the other side by swampy peatlands.

The natural environment has long sustained the life of this village on the island of Sumatra. But now 48-year-old Alfian is struggling. "The fish are gone from the river," he says. "It's barely enough for daily survival."

Alfian remembers when many fish species lived in the peatlands. He could feed his family for a week with the money from one day's catch.

The fate of both Alfian's daily catch and Rukam itself is intertwined with that of an estimated US $60 billion-dollar industry.

Indonesia sits at the heart of the global palm oil trade. In 2002, it arrived on the banks of Rukam when the Indonesian company PT Erasakti Wira Forestama (EWF) offered the villagers a one-time payment for their land.

Some villagers resisted. Syafei, a 68-year-old who was chief of Rukam at the time, advocated for joint ownership and management of the lands between villagers and the company. But he says some residents pressured him to accept the terms.

They were offered roughly €55,000 (700 million Rupiah, $62,333 according to conversation rates at the time) for approximately 2,300 hectares (5684 acres) in total.

"At that time, that amount of money was really huge," says Syafei. The villagers were "yearning for the compensation."

In the end the community sold the land. Valuable peatlands were converted to plantations — and the repercussions of the decision are still felt today.

The Environmental Cost of Palm Oil

Touted as a wonder commodity, palm oil is found in a vast array of products and has been an undeniable driver of economic growth in the country.

But the environment has paid the price — namely through deforestation, loss of biodiversity, soil degradation, and polluted water and air.

Slash-and-burn techniques, used to clear large swathes of land for plantations, are particularly devastating in peatlands like those found in Rukam. Peatlands are made up of thick layers of decomposed organic material and burning them releases huge amounts of carbon into the atmosphere.

Rukam's residents have witnessed their landscape transform since they sold their land.

The peatlands were drained to make them usable for palm oil. A water pump brought in for irrigation disrupted the natural flow of water, redirecting it from the river to the plantation — which made it difficult for Rukam's residents' to access water for their own fields.

The situation worsened when a flood dam, used to protect the oil palm plantation from flooding, was built in 2009.

"As a consequence, villagers experience more damaging floods in the rainy season and don't have enough water in the dry season," says Rudiansyah, from WALHI, Indonesia's largest environmental organization. Farming has become difficult.

The profits from the sale of land, which were split evenly among residents, were not long-lasting. In fact, Rudiansyah claims Rukam's economy shrank significantly after the land conversion. While there is no data from before EWF came to the village, a study from WALHI and the University of Jambi found 366 of 494 families in Rukam were considered "poor" or "very poor" in 2018.

WALHI and many villagers put this down primarily to the loss of fishing ground due to the palm oil expansion.

Residents say the lakes they used to fish in disappeared after the land conversion and that they've seen fish stocks dramatically decline. When peatlands were drained many valuable species lost their breeding grounds. Now, there are only 53 fishermen, making around €8 ($8.70) per day.

With few alternatives left, many residents have turned to working on the palm oil plantations to earn a living.

Roughly 150 people, or about 16% of the village, work on the EWF plantation, which covers more than 4,000 hectares of land between the Batang Hari and the Kumpeh rivers.

"The only way to survive is to work on the plantation," says Hikmawati, a 35-year-old Rukam resident. Hikmawati worked distributing fertilizer on the plantation but eventually quit because of the high workload and low wages.

Now Hikmawati is trying to earn a living as a seamstress, while her husband works as a driver for the few remaining fishermen.

Loss and Regret

Hikmawati can't imagine any future for Rukam and would turn back the clock if she could: "I'd go back to the olden days where we could grow rice, or when there were still plenty of fish around."

She's not alone. "When I see the vanishing forest, I feel sad... The future looks bleak," fisherman Alfian says. "If nothing changes, then the next generation will leave, and this village will go extinct. Because there is nothing to live for anymore."

Alfian expects he will be the last in the family line of fishermen. "Maybe my children will only learn the names and types of fish that used to live here," he says.

For former village chief Syafei, regret is tinged with frustration: "Everything I had planned for the future has gone to the bottom of the ocean because they didn't want to listen to me."

Many in the community feel a sense of loss, and not just concerning their livelihood. "Countless species of medicinal plants are also lost because of the land conversion from peat forest to plantation," says Rudiansyah.

It's a response common to many villages impacted by the industry. "There is without question an enormous amount of regret for those communities," says Terry Sunderland, a senior scientist with the Center for International Forestry Research (CIFOR).

"Rukam's story is actually representative for a lot of the villages in Indonesia that are engaging palm oil," says Erik Meijaard, a conservation scientist and chair of the International Union for Conservation of Nature palm oil task force.

"Certain communities benefit from palm oil, but for communities in which residents go fishing or hunting or collecting plants as part of their livelihoods, they tend to lose out quite badly when palm oil goes in and cuts down the forest, because you've got major environmental impacts."

A study out of Kalimantan, Indonesia, found a marked decline in social and environmental well-being in communities with oil palm plantations between 2000 and 2014 — particularly those, like Rukam, that relied on subsistence-based livelihoods.

According to Rudiansyah, Rukam is an unusual case because it chose to sell its land as opposed to many communities plagued by conflicts with palm oil companies.

But Sunderland argues fully informed consent is often lacking: "People should be able to make a decision based on the full knowledge of what the implications are. And that's not the case — palm oil is sold as the financial answer to communities' problems.... Palm oil companies negotiate very disingenuously and essentially don't provide all the information."

As part of the concession agreement with the local government, EWF made regular corporate responsibility payments to Rukam, used to build infrastructure in the village.

Still, some villagers now say they were misled about the impact on water and degradation of their peatland forest.

"At that time [of the sale] we didn't know the impact will be like this. It wasn't known to us that there was a plan to build the dam," says Alfian.

"Flooding wasn't even a problem [before], not like now where the water has become dark and murky, probably caused by the pollution from the plantation," says Hikmawati. Although no official study has been carried out, residents have accused the company of dumping chemicals in the river.

EWF has not responded to requests for comment on these allegations.

"The company should have been fair towards the villagers, not trying to destroy their livelihood, but to embrace them as strategic partners," says Rudiansyah, arguing lack of proper education in the community also played a role.

Wildfires and Mixed Progress

Despite established criteria from the Roundtable on Sustainable Palm Oil (RSPO) in data from 2018, only 19% of palm oil produced globally was certified sustainable. Furthermore, Greenpeace have argued deforestation continues to happen even among certified palm oil companies.

The Indonesian government has frequently touted the economic benefits of the industry. However, in the wake of the 2015 wildfires, which destroyed 2.6 million hectares of land including large swathes of peatland, the government took steps that earned international praise.

The Peatland Restoration Agency (BRG) was set up in 2016 and by the end of 2018, it had restored more than 679,000 hectares. In 2019, the same year as more intense wildfires hit the country, the Indonesian government also issued a permanent moratorium on new forest clearance for activities like palm oil development and logging.

But not all are convinced of the progress.

"[Palm oil] companies benefit from poorly enforced laws, which in some cases are also poorly drafted," says Sol Gosetti from Greenpeace, referring to the creation of the BRG and renewed government action against companies destroying forests and peatland, such as mandating punitive fines and revoking licenses.

"The intentions [of government plans] seemed good, but there has been very mixed follow up and research in the field shows that the plantation sector is still not changing its practices," says Gosetti. "In the meantime, a number of plantation companies continue expansion; clearing forests and draining wet, carbon-rich peatlands."

Despite the moratorium, a Greenpeace investigation in 2019 found that more than 1 million hectares had been burned in protected areas. The government has also been criticized for a failure to enforce industry transparency or regulations and tackle human rights abuses.

Peatland Regeneration

Yet at the local level, some see reasons to believe the peatlands have a future.

Panace, 39, is a farmer living in Pematang Rahim, a village not far from Rukam. He used to cultivate palm oil on peatlands, but found it was very expensive as a smallholder farmer and was degrading the soil.

Now he is one of many farmers working to rehabilitate their land through the peat restoration program. The first step is rewetting the peatlands by installing infrastructure like deep wells and canal blockings to redistribute water. Then trees and other crops are replanted to repair damaged land.

"We are going to continue diversifying our own crops and try to establish polyculture," says Panace. "We have started with Pinang palm — which grows well in peatlands and has a higher price on the market than palm oil fruits — and so far, it looks really promising."

The program depends on the willingness of both farmers and palm oil companies to participate but Panace believes education is key in the future. The program also works with community groups, NGOs and universities to promote the advantages of peatland restoration.

Change will not happen overnight. "Peatland recovery takes decades, while restoration activities have only been running for four years," says Myrna Safitri, from BRG. But once established on a broad scale it could help mitigate the spread of wildfires.

While restoration has not yet reached Rukam, not all residents are resigned to their village's fate.

Following pressure from the region's provincial government and WALHI, EWF has agreed to meet three demands of the villagers in Rukam, set to be put into effect this year: To repair the health of the soil, to help residents set up rice fields and irrigation systems, and to restore the water source for agriculture and clean drinking water.

This comes almost two decades after the decision that changed everything for Rukam. "Years ago, we only needed to take what nature provided for us," laments Syafei. "Our entire way of life was dependent on the natural rhythm of the seasons."

But he hasn't completely given up hope there is still time to recognize what is at stake. "If we don't learn from the past, then this village might disappear."