Forest community development: illegal activity, human right or matter of corporate responsibility?

Indonesia

Forest community development: illegal activity, human right or matter of corporate responsibility?

Limited rights and access to natural resources and declining forest resources leave local communities few other livelihood options but to engage in activities that yield immediate economic gain, particularly illegal logging activities, and convert forest lands for other purposes (e.g. oil palm) that can provide quick cash income. This, in turn, leads to further degradation of natural resources, resulting in the erosion of the support basis for sustainable livelihoods.

A number of alternatives, more sustainable livelihood initiatives exist and are promoted by the government, but effective implementation on site requires assistance, tools and guidelines. Community Plantation Forest (Hutan Tanaman Rakyat - HTR), Social Forestry (Hutan Kemasyarakatan) and Community Forest (Hutan Rakyat) are recent initiatives launched by the Ministry of Forestry to create the basic conditions for sustainable livelihoods. Another recent development is the introduction of corporate social responsibility (CSR) for companies involved in natural resources extraction - changing CSR activity from voluntary into mandatory - which will provide communities with possible support from companies operating in their proximity.

In Indonesia, the issuance of the CSR legislation has caused conflict between business actors and the government. In the eyes of the corporate world, this legislation appeared to transfer responsibility for improving rural people’s welfare from the government to private companies -- or to direct that corporations set aside some of their profits for society.

A PhD research was developed to gain insight in company – community relationships under partnership arrangements in the South Kalimantan Province. The research study was collaboratively organised under a project between the Forestry Research and Development Agency (FORDA – Indonesian Ministry of Forestry), Charles Sturt University (Australia), and Lambung Mangkurat University (Indonesia) and Tropenbos International Indonesia.

The project was developed in the South Kalimantan Province because it has a number of forest concessionaires and mining companies that significantly contribute to the local people’s livelihood; and also features company–community relationships through the practice of several types of CSR. Moreover, this province is severely affected by forest degradation, caused by companies extracting natural resources in their lines of businesses. Such activity has direct negative implications for forest dependent communities.

Some key findings from this research are:

  • Several inter-linked factors contribute to a forestry company’s approach to CSR, i.e. maintaining business profitability, securing future resource supplies, maintaining a cooperative relationship with local communities that surround the companies’ operations, as well as building and maintaining a positive media image.
  • Corporations are often perceived to have larger personnel capacity and financial resources than local communities, so are often expected to lead and guide CSR. However, with support from NGOs and perhaps other entities (e.g. local government), local communities could also develop their understandings about what approach to CSR is most preferred in order to negotiate their preferred ‘operating environment’ with corporations and government.
  • It is important to avoid seeing CSR as a formulaic procedure or a fixed recipe, but instead seeing CSR as a concept that should be nuanced and interpreted within a local setting and adapted over time (e.g. contractual partnerships should be periodically reviewed and updated). Also, CSR should be viewed beyond just a profit/loss arrangement, and be used to encourage local communities to develop their enterprise capacity and improve their livelihoods.

Duration

2008-2014

Objective

Government and corporate community forestry initiatives contribute to improved forest-based livelihoods and the conservation of forest resources.