Oil palm development may increase social tensions

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The rapid development of oil palm plantation has been helping the Indonesian economy in terms of export, economic growth and poverty reduction. However, it has side effect. First, it has contributed to the increasing rate of deforestation as some significant portion of the new oil palm land are converted from forested land. This is the tention to our enviroment. Secondly, because resource dependence tend to be associated with conflict, oil palm development can also create social tention and contribute to the occurrence of conflict.

Dr. Rashesh Shrestha and colleagues studied the extent to which palm oil development is associated with the occurrence of conflict. The finding of this study was presented in the SDGs seminar series on Friday, 26 April 2019, jointly hosted by SDGs Center and Faculty of Agriculture, Universitas Padjadjaran. Dr. Rashes is an economist at Economics and Research Institute of ASEAN and East Asia (ERIA) a think tank, funded by Japanese government based in Jakarta. The discussant of the paper was Dr. Ronnie Natawidjaja, a senior lecturer and researcher from UNPAD’s Faculty of Agriculture. The seminar was chaired by Dr. Ernah, lecturer of Faculty of Agriculture and Senior Researcher of the Economy and Environment Institute (EEI) INDONESIA.

In his presentation, Dr. Rashesh Shrestha and colleauges theorizes that the production technology of palm oil encourages violence by generating a predatory political economy. In spite of palm oil being a legal bulk commodity, its relatively capital-intensive nature, its labor organization requirements, and the oil palm lifecycle provide opportunities for multiple actors to engage in criminal and collusive practices aimed at capturing rents generated by the industry.

Using newly available panel data on the expansion of Indonesian palm oil plantation coverage from 2005 to 2014 derived from satellite imagery along with survey data aggregated to the subdistrict level, this study show that plantation expansion indeed generates an increased incidence of resource conflict. Using a panel estimation empirical strategy to control for subdistrict heterogeneity and variation over time, they find that the relationship between plantation expansion and conflict is increasing but non-linear over time.

To understand the causal mechanisms, the study also conducted qualitative investigations in several locations, interviewing members of local communities, plantation staff, police and government officials. We found three main patterns of violence, all intimately tied to the predatory political economy of palm oil: conflict over land use, inter-ethnic violence, and criminal or mafia violence, the last of which was the most significant.

Dr. Ronnie Natawidjaja argued that the narration of potential conflicts created by palm oil need to be anticipated with precaution because it may be added as intelectual arguments againts palm oil development. The study needs to be sharpened, among others, in terms of making sure that the conflicts are truly attributed to palm oil development and not to common development problems as conflicts are naturally not unique to the context of oil palm.

The seminar has provided new insights into the relationships between agrarian production technologies, political order, and violence. The event has also left homework for researchers working SDGs to think again the true benefit cost of oilpalm expansion in particular or natural resource intensive development in general. As the three pillar of SDGs: economy, social, and environment are equally important, managing potential tentions between these three pillars, particularly in the context of palm oil development are topics urgently need to be more researched for better policy recommendation.