Indonesia’s No. 2 palm oil firm faces global backlash over community conflict

CENTRAL SULAWESI, Indonesia — Karolus Kolong, a 62-year-old villager on Indonesia’s Sulawesi island, has spent nearly two decades fighting to get his land back from palm oil giant Astra Agro Lestari.

AAL, as the company is known, is the second-largest plantation company in Indonesia, which in turn is the world’s largest producer of palm oil. AAL’s global reach means its palm oil could, until recently, be found in products made by household brands like PepsiCo and Nestlé.

In 1995, Karolus was part of a group of more than 50 families who migrated from their village in East Nusa Tenggara province to Rio Mukti village in Central Sulawesi in search of a better life.

“In [the old] village, I had nothing,” Karolus told Mongabay at his home in October 2022.

For the first few years in this new land, the dream appeared to be coming true: Karolus grew oranges, chili and cacao on a 3-hectare (7-acre) plot of land, which he’d bought in 1997 from the village chief at that time.

Things changed soon after. In 2004, PT Mamuang, a subsidiary of AAL, won a concession covering 8,000 hectares (19,800 acres), parts of which overlapped with villages in the area, including Rio Mukti. Karolus and 70 other Rio Mukti villagers tried to negotiate with the company to spare their land, but to no avail: they could only watch as their crops and homes were bulldozed to make way for Mamuang’s oil palm plantation.

Karolus said he was too scared to fight.

“At that time, there were lots of police [officers] and the police military unit, Brimob,” he said, adding that they were armed with rifles.

Karolus is one of dozens of farmers who today remain locked in conflict with AAL and its subsidiaries in Sulawesi. The long-running conflict has been extensively documented by the media, including Mongabay in 2018.

A 2022 report by Walhi, Indonesia’s country’s largest environmental NGO, and Friends of the Earth U.S. showed that AAL subsidiaries Mamuang, PT Agro Nusa Abadi (ANA) and PT Lestari Tani Teladan were engaged in land grabbing, environmental degradation, and the criminal persecution of environmental and human rights defenders.

According to the report, the three AAL subsidiaries illegally claim or occupy more than 6,700 hectares (16,700 acres) of land, and none have sought the free, prior and informed consent (FPIC) of local communities to operate in the area.

The report also said the companies had disposed of waste improperly and exacerbated flooding by clearing watershed areas.

The Central Sulawesi chapter of WALHI recorded up to 10 people as facing criminal charges brought by the companies — mostly for allegedly stealing oil palm fruit, occupying land without a permit, and making threats.

These findings into the AAL subsidiaries have prompted nine global consumer goods brands to suspended their purchases of palm oil from the parent company. The latest companies joining this suspension of sourcing from AAL are PepsiCo and Dutch dairy producer FrieslandCampina.

The others include Danone, Hershey’s, Nestlé, Procter & Gamble, Mondelēz, Colgate-Palmolive, and L’Oréal.

“These suspensions prove that AAL’s destructive practices aren’t going unnoticed,” said Uli Arta Siagian, forest and plantation campaigner at Walhi. “AAL should read the writing on the wall and return land back to communities that was taken without their consent.”

AAL media and public relations manager Mochamad Husni said the company has obtained all permits through the proper procedures, including identifying community lands, existing permits and Indigenous territories in the concession.

The report and the growing list of brands suspending sourcing from AAL have prompted the company to launch an independent investigation, led by environmental consultancy EcoNusantara. In a statement, AAL said EcoNusantara had started the process by engaging with Walhi to obtain buy-in from the NGO.

AAL also planned to host a kick-off meeting for the investigation on May 25. WALHI said AAL had claimed Walhi would participate in that meeting. But Walhi said it had never agreed to the investigation’s terms of reference since it wasn’t consulted in developing those terms of reference.

Walhi added that it never planned to attend the meeting, which was subsequently cancelled.

Uli said the investigation isn’t needed anyway as there’s plenty of evidence of AAL’s unsustainable business practices in Sulawesi.

“Communities impacted by AAL’s destructive operations have made it clear that they are not looking for further investigation,” she said. “Every day justice is delayed is another day justice is denied. The evidence that has emerged over the past year is sufficient for AAL to take responsibility for its actions.”

Instead of acting swiftly to resolve the ongoing conflicts, AAL decided to escalate the conflicts, Uli said.

Testimony by numerous eyewitnesses in March indicate that AAL has tightened security on the ground, with dozens of fully armed police and military personnel guarding the area controlled by ANA.

“They forbade us from doing activities because they said the area belonged to the company,” Ambo Enre, one of the farmers in ANA’s concession, said as quoted in Walhi’s report. “There have been no corrective actions from AAL. Instead, the intimidation has become more massive.”

Husni, the PR manager, said AAL has been operating in accordance with the United Nations Guiding Principles on Business and Human Rights.

Walhi called in AAL to scrap the investigation and reallocate the resources to returning the land to the farmers and communities who had been forced to give it up without their consent.

“We continue to call on AAL to act on the evidence in the public domain to provide remedy to those that have lost their lands and livelihoods due to the company’s operations,” said Walhi Central Sulawesi lead campaigner Aulia Hakim.

Karolus is one of these community members. Back when he had his own land, he was able to support his family of four and send his son to school. But shortly after Mamuang entered his village, he lost his daughter to illness; he couldn’t afford to get her the medical treatment she needed. His son had to drop out of school.

“I couldn’t afford any of it,” Karolus says. “My farm no longer exists.”

Now Karolus and his son work as day laborers on other people’s farms, earning a meager pay. His wife died in 2021 after years of suffering from stomach illness.

“She always joined in the protests against the company,” Karolus says, adding he will continue her fight to get their land back.

The number of people who remain in Rio Mukti village has dwindled, with many families who migrated there alongside Karolus having returned to their villages in East Nusa Tenggara. Today, there are only nine families left out of the more than 50 families who made the original trip with Karolus.

“Everyone’s gone back to their villages; I’m still here,” he says.

In AAL’s statement announcing the new investigation, the company conveyed its “sincere apology to any parties for the inconvenience arising from this case.”

“For farmers who have lost their livelihoods, for defenders who have been thrown in jail, for community leaders that have faced death threats, these are not mere inconveniences,” Aulia said. “Instead of treating communities that are the rightful owners of the land with contempt, AAL should show more humility for its role in sowing conflict.”