Two New Books Look At the Reasons Behind Region’s Haze Crisis

SINGAPORE, March 28, 2016 /PRNewswire/ — In 2015 some 2.6m hectares of land burned in Indonesia: an environmental and economic catastrophe that according to a recent report from the World Bank is “repeated year after year, as a few hundred businesses and a few thousand farmers seek to profit from land and plantation speculation practices, while tens of millions of Indonesians suffer health costs and economic disruptions.”[1] The fires contributed an estimated 1.7 metric tons of carbon dioxide equivalent emissions during this period, nearly 5% of the world’s total for 2015.[2]

Why can this problem not be solved? What are the forces at work that make it so difficult to prevent damaging fires and further devastation of the landscape? Two new books from NUS Press bring fresh perspectives, much-needed clarity and important baseline data to these questions. The drivers of the region’s haze crisis can be found in the environmental and social context of Indonesia’s vulnerable peatlands, and in the political economy of agriculture and agribusiness in Indonesia and Malaysia.

Catastrophe and Regeneration in Indonesia’s Peatlands: Ecology, Economy and Society collects the results of a unique multi-year, multi-disciplinary study of peatlands in Indonesia’s Riau province, conducted by Japanese and Indonesian scholars. The book looks at the peatlands in historical and environmental context, understanding the impact of human activity in these ecosystems. The study then looks in detail at the sorts of economic activity that still could be viable in the peatlands, seeking an approach that balances development and conservation.

The Oil Palm Complex: Smallholders, Agribusiness and the State in Indonesia and Malaysia features contributions from scholars based in Australia, Indonesia, Malaysia and globally. It focuses on the long-term rise of this booming commodity: the interplay between market-driven investment, the transnational state-agribusiness alliance that has emerged to foster this investment, and the initiatives and responses of rural people throughout the region, as landholders, settlers or migrant workers. The political economy of crops like oil palm is key to the overall picture of rural development and agrarian transformation that includes the burning peatlands.

Catastrophe and Regeneration in Indonesia’s Peatlands: Ecology, Economy and Society

The Context

  • Indonesia is host to some 22.5m hectares of tropical peatlands, mostly in Sumatra and Borneo. Riau Province has some 4m hectares of peatland, of which 57% have been converted to oil palm and fast-growing softwood plantations over the last 25 years.
  • Peat soils are an important global store for carbon, and the oxidation and burning of tropical peat soils is a major contributor to carbon emissions globally: the 2015 fires on Indonesia’s peatlands contributed some 1.75 megatons of CO2 equivalent emissions, roughly 5% of the global total emissions for the year.
  • Despite their importance and large extent, Indonesia’s peat forests have been relatively little studied, and many gaps in our knowledge remain. This book is among the first comprehensive, multi-disciplinary efforts to understand the peatlands from scientific, social scientific and historical perspectives.
  • The peatlands were an important new frontier in the expansion of Indonesia’s agriculture and agribusiness, over the last 30 years, with lands opened up first for transmigrants growing subsistence crops, and when those efforts failed, for plantation agriculture, chiefly oil palm and acacia grown for paper pulp.

The Findings

  • The peatlands are highly unsuited to large-scale agricultural use, and are of greater value to humanity as reservoirs of biodiversity and large-scale carbon stocks, and for their ecosystem services, for example in regulating water resources.
  • Peatlands were hardly used for economic purposes until the mid-19th century – when logging and clearing of the land for agriculture was done on the periphery of the peatlands, and at a small scale.
  • Existing peatlands converted to plantations will suffer increasingly from soil subsidence and flooding, making them unviable as commercial plantations in the medium and longer-term.
  • However given the amount of peatland already drained, and the number of people seeking livelihoods in this area, it is important to find the best means to create sustainable livelihoods for these communities, while better managing carbon stocks and other natural resources.

The Findings: Riau Case Study

  • The design of successful rehabilitation schemes requires a cross-disciplinary approach and a focus on the details of local landscapes: This book is an effort in that direction, including an in-depth study of one area, the Giam Siak Kecil-Bukit Baru Biosphere Reserve (GSK-BB BR) in Bengkalis Regency of Riau Province.
  • The opening up of this landscape started with commercial logging in the 1980s and 1990s, followed by the establishment of large-scale commercial acacia plantations and the conversion of logged or burned forest to smallholder palm oil in the 2000s, often by in-migrants to the region, including after devastating fires in 2002. Much of the land in the study area is now degraded and frequently subject to fire.
  • Villagers in the study area are becoming disillusioned with oil palm as a crop: as many as one-third of their oil palm plots are now abandoned, often due to fire damage.
  • Smallholder cultivation of rubber is a good compromise from a livelihoods and carbon budget perspective. Though fast-growing acacia stands accumulate carbon stocks very quickly, they are also harvested frequently.


  • A top priority is the active rewetting of peat soils, and their rehabilitation to support selective and managed forestry of high-value species. There are strong incentives for this at community level, but current government forestry policy will need to be changed to support this option.
  • Lands that cannot be rewetted or fully rehabilitated are best managed by smallholders integrating rubber plantations into a variety of economic activities.
  • Many fires are taking place along canals and roads that were built by logging companies, and are not now actively managed. Designing incentives and systems for fire prevention in areas not under community or company management is an important priority.
  • Further expansion of plantation areas must be halted: existing plantations can be better managed, to protect peat soils and preserve biodiversity.

About the Editors

Kosuke Mizuno is professor at the Center for Southeast Asian Studies, Kyoto University.

Motoko S. Fujita is researcher at the Center for Southeast Asian Studies, Kyoto University.

Shuichi Kawai is professor at the Research Institute for Sustainable Humanosphere, Kyoto University.


The Oil Palm Complex: Smallholders, Agribusiness and the State in Indonesia and Malaysia

The Context: Palm Oil as a Booming Commodity

  • Ingredients derived from palm oil are found in approximately 50% of products on supermarket shelves, such as chocolate, cooking oil, shampoo and detergent.
  • The oil palm is five times more productive of oil per hectare planted than the next-most-productive vegetable oil crop.
  • Global demand for palm oil was 74 million tons in 2014 and could double by 2020, as the growth of the world’s population and affluence of people in developing countries will lead to a higher consumption of goods containing palm oil.
  • Some 15m hectares of land in Indonesia and Malaysia are used for oil palm cultivation, an increase of nearly 12m hectares over the last 20 years. While estimates vary, nearly half of this expansion has involved some form of forest destruction.

The Context: Indonesia and Malaysia

  • Indonesia and Malaysia are the world’s top oil palm producers: the two countries account for 84% of global palm oil production, which in turn accounts for 65% of all vegetable oil traded internationally. Some four million workers in Indonesia and Malaysia are engaged in oil palm production.
  • The growth of the industry across both countries has generated wealth and helped alleviate poverty, and can continue to do so, but the structure of the industry has shifted over the last 20 years, and a wide range of economic, social and environmental controversies continue.
  • Patterns of oil palm development and production vary widely. On one end of the spectrum are large-scale estates (corporate- or state-owned), in some cases developed as joint ventures with local communities or customary landowners. Indonesia’s “nucleus estate -” model was the best-known of the intermediate approaches that have sought coordinated development of smallholdings around a central estate. At the other end of the spectrum there is a growing number of smallholders, operating on their own, with- or without government assistance.

The Book’s Findings: The Industry Today

  • With the growth of regional linkages, Malaysian capital and technology combining with Indonesian land and labour to create a transnational industrial “complex”. Malaysian interests now own between 18 and 25% of Indonesian plantation land, and Malaysian and Indonesian companies are linked at a variety of levels.
  • The book reveals two long-term and contradictory trends in the structure of the industry:
    • a trend towards a corporate model of plantation agriculture, with local residents (and in-migrants) increasingly cast as “shareholders” and/or wage laborers; and
    • a resurgence of smallholder interest in the crop, not always encouraged by the state or agribusiness, and with variable outcomes.
  • The dominant national policy narratives have become less focused on farmers and livelihoods, and increasingly focused on returns to capital and export growth. There has been a rapid rise in the wealth and power of large state-owned and private agribusiness corporations, some building on previous investments in plantations, others mobilizing timber wealth, others accessing international share capital and finance, often via Singapore.
  • The contours of this oil palm complex are not determined by technical or market imperatives: they reflect the political settlements that encompass opportunities for surplus extraction and political patronage across the region. This remains true at the scale of national and provincial policy-making, as well as at the local level, where the specific negotiations between plantation representatives, local government officials, village leaders and farmers can make a big difference in outcomes.


  • Government policies have increasingly favoured the commercial plantation sector in opening up “new” lands for oil palm development, often against the interests of customary landholders.
  • Land conflicts between residents, smallholders and politically-connected corporations are commonplace, but the biggest cause of conflict is opaque and unfair agreements due to asymmetries of knowledge and power.
  • While legal arrangements are changing, Indonesian law affords only weak protection for customary landowners. While customary land claims in Malaysia have often been upheld by the courts, these can be hollow victories as the state finds ways to manoeuvre around them.


  • Across both countries, the plantation model has led to greater precarity and vulnerability among oil palm workers, some two-thirds of whom are internal or international migrants, many with illegal or uncertain status.
  • In some areas, land allocation and transmigration policies seem designed to create a permanent oversupply of wage labour: favourable for short-term returns on capital but highly exploitative and unlikely to be sustainable in the longer term.
  • While Indonesian schemes in the past assisted large numbers of smallholders, current policies do a poor job of assisting smallholders: delivering credit, planting materials and expertise to smallholders could have a big impact on rural livelihoods.
  • Malaysia does have some effective programs to assist smallholders in increasing their productivity, but paradoxically Malaysian smallholders increasingly employ migrant labour.

Research Findings: The Industry Tomorrow

  • Successful models exist that allow both plantation-linked and independent smallholders (with state support) to grow oil palm productively and in sustainable ways that secure their livelihood. There is still potential for a more inclusive and less exploitative path of development. Much depends on political settlements between key actors at the local level.
  • More effective agricultural extension programs, particularly in Indonesia, could have a significantly positive impact on productivity of smallholdings. More focus on the productivity of the industry as a whole would also lessen the demand for expansion into high conservation value forests.
  • Private regulatory initiatives like the Roundtable on Sustainable Palm Oil (RSPO), while partly effective, cannot compensate for the weaknesses in state land and forest governance and institutions and are ill-suited to the circumstances of most smallholders.
  • Recently, a greater awareness of the environmental costs of the industry, among other factors, may be helping shift the balance towards a greater focus on equitable and sustainable outcomes. Still, the oil palm complex is continually changing, and it remains to be seen if national governments in Indonesia and Malaysia can effectively enforce policies to achieve such outcomes, not just for themselves, but for Southeast Asia as a whole.

About the Editors

Rob Cramb is Professor of Agricultural Development in the School of Agriculture and Food Sciences at the University of Queensland.

John F. McCarthy is Director of the Resources Environment and Development (RE&D) Program, Crawford School of Public Policy, ANU College of Asia and the Pacific, The Australian National University.

source: NUS Press

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