Transmigration, Oil Palm Plantations Partnership Schemes, and Human Rights

Report launched in Jakarta: The report is based on fieldwork carried out since 2015 in the provinces Riau, Bengkulu, Central Sulawesi and West Kalimantan, and is written by the Institute of Economic, Social and Cultural Rights in cooperation with the NCHR.

More than 60 people, including speakers and participants from the Ministry of Forest and Climate, the Ministry of Villages, Underdeveloped Regions and Transmigration, the Ministry of Agriculture and Plantations, GAPKI, and the Indonesian Association of Palm Oil Producers attended the launch event in Jakarta 11. January.

Indonesia is the world’s largest producer of palm oil. Historically, the development of palm oil plantations have been strongly supported by transmigration – that is, domestic state sponsored migration from the overpopulated ‘inner Islands’, to the lesser populated and developed ‘outer islands’, where transmigrants were given a plot of land. These programs have facilitated access to land, workers and infrastructure for Indonesia’s palm oil industry. At the beginning of President Joko 'Jokowi' Widodo’s current term it was an explicit aim to transfer additionally 4 million transmigrants during the government period. 

Studying the relationship between companies and smallholders

Central to Indonesia’s palm oil industry is the plasma model – a model for sharing land between plantation companies and smallholders. Under this model, companies control ‘core’ lands, whereas smallholders, who may be transmigrants or locally recruited people, will be given smallholder plots of two hectares, referred to as ‘plasma land'. The legal frameworks regulating these models have changed substantially over time, but the model itself has remained the same.


The report found that even though the state plays a large role in facilitating plantation-smallholder partnerships, there is hardly any oversight on how such partnerships work in practice. Smallholders have no complaint mechanism and in many cases, there are no written contract between the company and the smallholders at all. Typical complaints relate to lack of information and oversight, low or infrequent payments, high deduction for expenses, the price received for palm oil fruits, and the provision for plasma lands itself.

Practical implications

Oil palm plantations normally have an operational permit for 25-30 years, after which the ‘core lands' controlled by the company must be returned to the state, unless it is decided to extend the operational permit for a new period. The report recommends an audit over how the partnerships function in practice, before any decision is taken on whether to extend a plantation permit or not.

The findings and recommendations for each province have previously been discussed with regional authorities through four separate events, also involving local civil society participation. The findings have also been presented to the President’s Office.

For other findings and recommendations, read the full report (in Indonesian). An English translation is forthcoming. 

By Aksel Tømte
Published Jan. 17, 2018 1:22 PM - Last modified Mar. 23, 2018 11:45 AM