Buol has become a battleground, caught in a decade-long struggle between promise and reality. This conflict, located in the rural heart of Indonesia, is a clash between the palm oil plantation company, PT. Hardaya Inti Plantation (PT. HIP), and Buol’s local villagers. Derived from the agreement made in 2008 between the two parties, what was meant to be a path to prosperity has instead driven the community into poverty and plight.
In 2008, PT. HIP promised the villagers a monthly income of at least 1.3 million rupiah per hectare (approximately $124) from their plasma plantation. By 2022, this should have translated into around 3 million rupiah ($190) per family each month. However, the villagers’ reality starkly contrasts with these promises. On average, they made a meager profit of just $11 per month on average, and many have reported receiving no payments since 2018. For instance, Martinus, a farmer from West Kalimantan, claims that “what’s surprising is that we [the villagers] didn’t get anything. Not even one rupiah from that company in ten years.” PT. HIP has also burdened them with high management fees and other costs, deepening their resentment against the plantation company and driving them into severe debt.
On January 8th, 2024, the villagers took a bold step to halt plantation operations, hoping to force PT. HIP into addressing their grievances. But instead of peaceful negotiations, they were met with aggression. PT. HIP workers, backed by extensive security forces, ignored the villagers’ boycott and began harvesting Fresh Fruit Bunches (FFB) from the disrupted land themselves. This response pushed the farmers to block the trucks carrying the FFB, escalating into severe violence.
Several farmers were assaulted. Among the injured were Aris, Masnia, and Mada Yunus. Aris was injured after being pushed into the truck’s metal frame and attacked by security. Masnia was beaten after being thrown from the truck, and Mada Yunus was struck by falling palm fruit, causing severe leg injuries and dizziness. The community’s anger grew as their peaceful protest was met with such malicious brutality.
Still, the roots of this conflict extend deep into Indonesia’s troubled land and forestry sectors, plagued by corruption and legal ambiguities. The owner of PT. HIP, Hartati Murdaya Poo, faced conviction for bribing the Buol district chief to secure the concession for the plantation. Despite the scandal, PT. HIP retained its rights to the land. In 2022, Siti Nurbaya Bakar, the Environment and Forestry Minister, controversially approved a permit allowing PT. HIP to clear 100 square kilometers of rainforest in Buol. This decision was criticised by Indonesia’s Corruption Eradication Commission (KPK) and environmental activists, claiming it perpetuates corruption and spearheads environmental destruction.
Zenzi Sihadi, head of legal advocacy at the Indonesian Forum for the Environment, warns, “if a company that has been implicated in a corruption case can still get a permit, then it’s a sign that other companies will follow suit,” as seen through the severe palm oil shortages in late 2021 and early 2022.
The palm oil crisis has led Indonesia’s anticompetition watchdog, the KPPU, to uncover a shocking reality: seven major companies, such as Wilmar International, were implicated in a scheme to hoard palm oil. This strategy was designed to circumvent selling the product at prices set by the government. Notably, Wilmar International, which sources from PT. HIP, depends on approximately 80% of palm oil plantation companies that supply to it. The hoarding actions revealed a widespread attempt to manipulate market prices and evade regulatory caps.
For instance, within Wilmar International, the firms PT. Multimas Nabati Asahan and PT. Sinar Alam Permai withheld their supplies, which intensified the shortage and drove up prices, causing significant hardship for Indonesian consumers. In response, the KPPU fined these companies a total of 71.28 billion rupiah (around $4.75 million). Yet the scandal ran deeper. Executives from Wilmar International and other palm oil companies conspired with a trade ministry official to bypass domestic supply obligations. They aimed to sell palm oil abroad at higher prices, further exacerbating the domestic shortage. This collusion revealed a pattern of corruption and regulatory failure that not only depleted local markets but also exposed a systemic flaw in Indonesia’s palm oil industry. It became clear that the palm oil crisis was not simply a consequence of market forces but a calculated strategy by influential players to maximise their profits.
In hindsight, the push for sustainable and ethically sourced palm oil seems like a promising answer to Indonesia’s deep-rooted corruption and environmental issues. However, it overlooks the issue of unsustainable land use, largely fueled by weak governance.
Wilmar claims to uphold a “No Deforestation, No Peat, No Exploitation (NDPE) Policy,” yet the company’s track record tells a different story. Wilmar scored a dismal 25% on its anti-deforestation commitments, revealing a glaring gap between its promises and actions. The company has failed to protect vital forests, lacks transparency in reporting its supply chain activities, and neglects to adequately monitor or verify whether suppliers comply with environmental standards. Furthermore, Wilmar International withdrew from a committee dedicated to identifying and safeguarding crucial forest areas. This act underscores its apparent lack of genuine commitment to sustainable land use and highlights broader issues within the global palm oil industry.
Still, this disconnect between policy and practice is not unique to Wilmar and reflects a deeper systemic problem. Legal loopholes and insufficient enforcement allow plantations to flout environmental standards, contributing to ongoing corruption and environmental degradation.
As Indonesia confronts these entrenched issues, the plight of Buol’s villagers demands for urgent action. However, addressing these problems requires more than just a few policies. It requires rigorous enforcement of existing laws and a steadfast commitment to holding corporations accountable. Sustainable and ethical practices must transcend buzzwords and deliver real, tangible benefits to communities like Buol.
Edited by Aimee Wang
Victoria Forte is in her third and final year at McGill University, where she is completing her B.A. in Political Science and Gender, Sexuality, Feminist, and Social Justice Studies. As she navigates her final year, Victoria brings a fresh perspective as a new staff writer for Catalyst. Her academic and journalistic pursuits are driven by a deep interest in exploring the intersections of power, identity, and social justice.