Social Conflicts

Biru Maju

No. Desc. Period Events Status
1 Land tenure conflict between between GAR subsidiary PT Buana Artha Sejahtera (BAS) and the communities of Biru Maju village (Biru Maju) Mar – Apr 2013 As detailed in our Sustainability Reports, a Task Force comprising members from SMART, TFT and LINKS conducted a mapping exercise to assess the situation on the ground and the interests of the parties concerned.

The conflict involves overlapping land claims. A community group led by the village head of Biru Maju claimed that part of BAS concession overlaps with an Area Penggunaan Lain (APL) or Other Uses Area which they believe is designated for transmigration purposes. To address the issue, the Task Force initially developed terms of reference to resolve the matter at the community level. However, as the matter is also of legal concern, it was raised with the authorities.

Sep 2013 The Task Force reported its assessment of the situation in Biru Maju and recommended conflict resolution measures.

One of the recommendations by the Task Force was for BAS to partner Biru Maju on a plasma development programme.

Feb 2014 Socialisation on plasma development was conducted in Biru Maju. In line with the principles of Free, Prior and Informed Consent (FPIC), the Company explained the mechanisms, requirements of future land development and the approaches to implementing plasma development.

Most of the community expressed keen interest in the plasma development programme and conducting land measurements through a cooperative, Koperasi Bangkit Bersama.

The Company would continue with socialisation to ensure that the communities fully understand the plasma scheme so that their interests are properly and fairly accommodated. The Task Force would also continue to engage with the relevant stakeholders including the communities, village leaders and government for an amicable resolution to the conflict.

May 2014 The Biru Maju Village Head asked the Dispute Settlement Facility (DSF) of RSPO to mediate.

During this period, the Governor of Central Kalimantan issued a letter stating that the 807 hectares of APL area was allocated to BAS in accordance with the law. The Governor also requested the Regent of East Kotawaringin to resolve the matter.

Aug 2014 The DSF had difficulties scheduling a hearing with the Regent of East Kotawaringin due to upcoming elections.

Subsequently, the Task Force proposed that Biru Maju village officials proceed with a meeting without waiting for an audience with the Regent.

May 2015 The Task Force held a meeting at the Company’s office. It was decided that the next meeting would be held the following month at BAS office in Sampit or Palangkaraya, Central Kalimantan Province.
Jun 2015 In parallel with government engagement, the Company collaborated with a mediator appointed by the DSF. A meeting was held in Sampit with all parties concerned on 12 Jun 2015. It was facilitated by the DSF and mediated by Mr. Raymond Lee from the National Mediation Centre (Pusat Mediasi Nasional).

The options proposed by the Company were:

  1. To verify the APL land (an area of 451 hectares) by involving an independent third party observer.
  2. To develop plasma land outside the APL.

The options proposed by Biru Maju community were:

  1. The APL land is to be transferred to the community.
  2. The APL land to be turned into smallholding units.
  3. A profit-sharing scheme between the community and the Company based on palm oil proceeds in the APL.

The DSF decided to consult with RSPO before making recommendations.

Aug 2015 On 20 Aug, The Regent of East Kotawaringin invited relevant stakeholders including district officials, Biru Maju and Company representatives to a meeting.

The key outcomes were:

  1. It was found there was no overlap between the BAS concession and the Biru Maju village boundaries
  2. BAS was instructed to continue plantation operations in the disputed area in accordance with government rules and regulations
  3. The District would send a team in the following month consisting of various District department officials to the Biru Maju village area in order to identify areas for plasma development, resolve any outstanding licensing issues and work with the BAS plasma cooperative
Oct 2015 On 1 Oct, the DSF sent a letter to both parties to encourage continued dispute resolution efforts via mediation and/or third party facilitation. DSF indicated it was willing to facilitate further dialogue.

On 21 Oct, the Regent of East Kotawaringin issued a letter to BAS confirming that its land does not overlap with Biru Maju areas and approximately 807 hectares of land can be utilised. BAS is required to set up a CSR programme for communities within and around the area for which it has a licence.

Nov 2015 On 5 Nov, the DSF wrote to both parties advising them to assign a mediator who will provide a mediation plan and budget. DSF recommended Mr Raymond Lee from the Indonesian Mediation Center given his reputation and experience. The Company has agreed to the appointment of the mediator.
Apr 2016 Biru Maju as represented by its Village Head, and BAS signed an Agreement on 21 Apr agreeing that the conflict is resolved and closed as witnessed by DSF (Ms Fina Sugriani).

They further agreed that:

  1. BAS will continue to manage the APL land and the Biru Maju village supports this fully.
  2. Biru Maju relinquishes all claims upon BAS in this matter.
  3. BAS will help Biru Maju and Sebabi villagers develop plasma plantations under the BAS plasma cooperative as per government regulations and land availability.
  4. Biru Maju will support the preparation and plasma development through the BAS cooperative.
  5. Aside from plasma development, each Biru Maju and Sebabi village will be facilitated in developing a six hectare community plantation according to regulations and land plot allocation by respective villages.
  6. BAS and Biru Maju agree to continue engagement to develop community empowerment programmes in line with policies and requirements of BAS.
  7. BAS and Biru Maju agree that if subsequent matters arise which have not been included in the Agreement, then these matters will be jointly discussed and upon agreement, included as addendum(s).

The Agreement has been shared with the RSPO.

July 2016 RSPO informed GAR that the Complaints Panel has agreed that the case has been resolved by bilateral engagement and recommends that it be closed.

Last updated 04 July 2016

Karang Mendapo (Karmen)

No. Desc. Period Events Status
2 Disagreement over village boundaries between Karang Mendapo (Karmen) and Batu Ampar, Sarolangun, Jambi Feb 2013 As detailed in our Sustainability Reports, collaboration with The Forest Trust (TFT) has been ongoing to reach a peaceful resolution of a case in the village of Karmen, Jambi. The case involves SMART subsidiary PT Kresna Duta Agroindo (KDA), which, in partnership with the Koperasi Tiga Serumpun (KTS), manages the plasma plantations of farmers of eight villages under the cooperative credit scheme, Koperasi Kredit Primer Anggota (KKPA).

Central to this dispute are land and estate management issues. Under the KKPA, smallholders in the KTS cooperative entrusted their land to KDA, which manages the plantations. A bank loan was granted to KTS with KDA as guarantor as per national banking regulations. As part of the plasma partnership, KTS is contractually obliged to sell the fresh fruit bunches (FFB) harvested to KDA. The proceeds would then be used to repay the loan and interest.

In Sep 2008, a group of villagers from Karmen began to manage the disputed plantations in Karmen and Batu Ampar, a neighbouring village. The group sold the FFB harvested to other mills instead of KDA. As a result, loan and interest payments from the disputed areas was discontinued. Meanwhile, KDA, being the guarantor of the credit facility, continued to service the bank loan and interest. The conflict escalated in Jan 2011 when a clash between the group of villagers from Karmen and the local police resulted in injuries.

To resolve the conflict amicably, SMART engaged TFT to assist in mediation.

Following a series of seminars and consultations facilitated by TFT to ensure a common understanding between the parties, the Karmen leadership, KTS and KDA signed a resolution on 14 Oct 2011 with an action plan for mutual cooperation.

The 12 points of the agreement included a commitment that all FFB harvested in Karmen would be delivered to KDA, and that a proportion of the revenue received would be used to repay the loan and interest.

The various parties were working on implementing the agreed action plan until 19 Feb 2013, when Karmen stopped delivering FFB to KDA. The bank loan repayment came to a halt as a result.

Apr 2013 On 3 Apr 2013, TFT gathered the key parties concerned to review the implementation of the resolution and action plan that was signed in 2011. The meeting was attended by representatives from SMART, KDA, KTS, the Village Representative Board (Badan Perwakilan Desa or BPD) and leaders of Karmen, leaders of Batu Ampar village and local NGOs. The meeting concluded with a commitment expressed by each party to keep the engagement process going and resolve any issues that could hinder the process.
May 2013 Field verifications of the village boundary between Karmen and Batu Ampar were completed with support from TFT. The District Head or Bupati of Sarolangun made the boundary official, recording it in an official letter. TFT then arranged a meeting involving leaders from Karmen and Batu Ampar to discuss the implementation of the boundary as stated in the letter.
Oct 2013 The BPD resumed bank loan repayments and negotiated to deduct a proportion of the gross revenue from FFB sales from Karmen to offset production costs since Oct 2013.
May 2014 To move forward on the 12-point agreement that was signed in Oct 2011, TFT gathered key stakeholders from SMART, KDA, KTS, BPD, Karmen, Batu Ampar, four local NGOs, RSPO and the Sub-District Head or Camat of Pauh for a meeting.

It was agreed that the BPD would set up an institution to manage plasma plantations for the communities in Karmen and ensure continual and, eventually, full delivery of FFB to KDA as committed in the plasma partnership between KTS and KDA.

Aug 2014 Full delivery of FBB from Karmen to KDA resumed. Bank loan repayments resumed.
Dec 2014 Following the decree by the Regent of Sarolangun which defined the boundary between Karmen and Batu Ampar, both communities agreed to accept the official decision.

Village heads of Karmen and Batu Ampar agreed to socialise the official decision.

It was also agreed that the border between the two villages would be defined by a canal.

Jun 2015 SMART established a team to close this conflict case with the RSPO.
Aug 2015 SMART decided to organise a Focus Group discussion (FGD) on progress on the 12-point agreement. The FGD would involve PT KDA, KTS and Village Heads of Karmen and Batu Ampar.

The Village Head of Batu Ampar would also be invited for further discussion on the border delineation between the two villages.

Oct 2015 A meeting was held on 16 Oct on the status of the implementation of the 12-point agreement between PT. KDA, KTS and Karmen Village.

Discussion topics included:

  1. Willingness of parties to continue the conflict resolution processes
  2. Agreement on the 12 points and acceptance of the agreement by all parties
  3. New leadership in the village

Outcomes and recommended solutions:
Long-term: within 1 year
To establish a local agency that is inclusive, transparent and accountable which would represent the village . This agency would manage plantation-related work and all issues in the village

Mid-term: within 4 – 6 months
To foster dialogue amongst all stakeholders and to support the new leadership of the village as the focal point

Short-term: within 3 months
To hold a meeting to review of the 12-point agreement and prior to the meeting to work on facilitating close dialogue amongst stakeholders.

Nov 2015 At the Dispute Facility Settlement (DSF) Advisory Group meeting at the RSPO Roundtable, the DSF reported that all stakeholders had agreed to DSF recommendations, including the recruitment of a consultant as a facilitator and/or mediator.

DSF would engage a consultant and prepare for the review meeting together with the consultant following the appointment of the new Village Head of Karmen.

Feb 2016 DSF facilitated a review meeting involving all relevant parties.
Jun 2016 The RSPO Complaints Panel noted in a letter to GAR dated 7 June 2016, that it was satisfied that KDA has carried out its obligations in the 12-point agreement and continues implementation of ongoing actions in Karmen. As such the Panel agreed that the case has been resolved through bilateral engagement and that it should be considered closed.

Last updated: 16 June 2016

Silat Hulu

No. Desc. Period Events Status
3 Land tenure conflict between Silat Hulu and PT Bangun Nusa Mandiri (BNM) Jun 2013 In 1978-79, the boundaries of Silat Hulu and Bayam villages were officially redrawn.

In 2009, the Silat Hulu community claimed that land which BNM had procured from the community of the Bayam village, was their customary land. In an attempt to stop further land clearance, the community seized BNM machinery. They demanded respect for their customary land rights and compensation.

BNM requested assistance from the District Plantation Development Team which consists of various government agencies and is known locally as TP3K, to mediate on:

  1. the border dispute between the hamlets of Silat Hulu and Bayam,
  2. the return of seized equipment

TP3K conducted an extensive survey of the disputed area, including a re-examination of the border between the two villages and an extensive audit of existing official documentation. They concluded:

  1. That evidentiary documents providing proof of ownership clearly stated that the plots of lands were owned by members of the Bayam village communities, prior to being acquired by BNM.
  2. That the letter of decree issued by the office of the Regent of Ketapang, as the rightful authority overseeing the area, had clearly delineated the boundaries between the two hamlets, and the letter clearly showed that the disputed plots of lands were part of the Bayam Village.
  3. That the re-examinationof the boundaries also showed a clearly delineated boundary between the two villages.
  4. That the Free, Prior and Informed Consent (FPIC) process, which was conducted by the Company, had been approved by the relevant village communities before land development began.

In Jun 2013, The Regent of Ketapang renewed the Location Permit for BNM per decree no. 313/PEM/2013.

As the Silat Hulu community had decided against palm oil development in their area, the Regent excluded it area from the Location Permit.

Jul 2013

Jul 2014
BNM continued to monitor the situation and provide updates to NGOs.
Aug 2015 SMART held a meeting with The Forest Trust (TFT) and Sawit Watch (SW) and agreed on an Action Plan for closing the conflict.
Oct 2015 SMART designated the Silat Hulu conflict as a Latent Conflict and noted that the community had decided against palm oil development. Conflict resolution efforts would continue.

  1. SMART and TFT would meet with SW after the local elections in December.
  2. TFT would plan a meeting for key stakeholders in early 2016 to discuss conflict resolution efforts

Last updated: 4 Feb 2016

Padang Halaban





No. Desc. Period Events Status
4 Land tenure conflict involving three villages and PT SMART (SMART) in Padang Halaban, Labuhan Batu, North Sumatra 2014 SMART acquired PT Maskapai Perkebunan Sumcana Padang in 1983 which was previously owned by Plantagen AG.

In 2000, a group of Padang Halaban community members formed the Farmers Group of Padang Halaban and Surroundings (KTPHS). They eventually laid claim to 3,000 hectares of land.

Their claim was based on:

  1. A Land Registration and Occupation document (KTPPT) which had been issued in 1956
  2. Their familial relationships to the original plantation workers on PT Maskapai Perkebunan Sumcana
  3. The allegation that the land had been seized by Plantagen AG.

The Land Dispute Settlement Team of Labuhan Batu Regency concluded that the claim of KTPHS was invalid. They concluded that the community claim was not based on the right of land, as stipulated in Law No. 5 of 1960 (UUPA).

KTPHS did not accept the conclusions of the Dispute Settlement Team.

In 2007, KTPHS became a formal organisation, consisting of 2,040 Families in 11 villages.

In 2009, 200 members of KTPHS built structures and planted fruit trees on the disputed land.

The illegal land occupation was reported to the local and regional police. They consulted the Head of Legal Division of the Regional Secretariat of Labuhan Batu Regency; the Head of the Land Affairs Office of Labuhan Batu; the Binkum of North Sumatera Police; the Head of Police Operations and Kanit Tipiter over the matter.

The officials concluded that the Land Use License of SMART was valid and in accordance with the law and the KTPHS claim was rejected.

The Labuhan Batu Police ordered KTPHS to vacate the disputed land.

From 2009-2012, KTPHS brought the case to the courts seeking to revoke the transfer of land rights from Plantagen AG to SMART.  The Supreme Court finally ruled against KTPHS in 2012.

Following the Supreme Court ruling, government officials tried to reach out to KTPHS to discuss eviction and compensation in accordance with the ruling.  KTPHS did not meet the officials and asked for negotiations with SMART instead.

Subsequently, SMART filed a lawsuit against KTPHS and the court in Rantau Prapat ruled that KTPHS must dismantle the structures, remove their plants and vacate the land. In May 2014, the District Court in Rantau Prapat ruled in favour of SMART.

Apr 2015 The court in Medan upheld the ruling of the District Court that KTPHS vacate and leave the land.

SMART then met local NGOs and the National Commission of Human Rights (KOMNAS HAM) to discuss how the Supreme Court ruling would be carried out.

The Governor and KOMNAS HAM recommended that SMART release 87 hectares to KTPHS. SMART did not agree with this recommendation as the Supreme Court had already ruled against KTPHS and this would set a precedent of contempt of the rules and regulations of the Indonesian legal system. However, the company said it was willing to sponsor plasma development for KTPHS members on land allocated by the local government.

Jun 2015 SMART formed a team to close the case with the Roundtable on Sustainable Palm Oil (RSPO).
The District Court also decided to set up a team to carry out the Supreme Court’s decision to remove the KTPHS’ structures upon SMART’s request.
Nov 2015 SMART and TFT began work on socialising the Supreme Court’s decision. This would involve consultations with stakeholders, KTPHS members and local government to find a win-win solution.

One of the proposed solutions is to move ahead with plans for plasma development for KTPHS and the community, subject to land availability from local government.

Feb 2016 SMART and TFT planned to conduct socialisation and discussions with the newly-elected Governor of Labuhan Batu Regency.
Jun 2016 The meeting facilitated by TFT discussed the options (including compensation) to relocate to another approved APL area around the concession. No decision was made.


SMART continues discussion with KTPHS in 2017 to leave SMART concession peacefully and will assist KTPHS in vacating the area.

SMART is waiting for the warrant from the Supreme Court to implement its Nov 2015 decision.

This concludes the reporting of the Padang Halaban case.

Last updated 1 Feb 2017