Can large scale land acquisition for agro-development in Indonesia be managed sustainably?

Abstract

This paper explores the impacts of large scale land acquisition for agro-development by analyzing the Merauke Integrated Food and Energy Estate (MIFEE) in Indonesia. It also examines the potential for MIFEE to meet sustainability requirements under RSPO, ISPO, and FSC. The plantation development plans are characterized by a lack of reliable official data and limited public disclosure. The available information paints a skewed picture of expected outcomes, where short-term economic benefits from forest clearing dominate and environmental impacts and social implications appear to be underestimated. Our analysis indicates that oil palm concessions under MIFEE can be RSPO compliant if they resist the short term windfall profits from conversion timber. ISPO certification is possible without any major overhaul. On the other hand, FSC certification for timber concessions is not possible. Because MIFEE plantation program is dominated by timber plantations, they weigh heavily on the program's poor sustainability prospects. In order to meet the Indonesian government's own objectives and improve the project's sustainability, the government needs to push for the implementation of oil palm certification and timber legality verification systems, reduce the size of plantations, target non-forestland, prioritize food crops, and secure local acceptance of plantation investments.