REA’s ability to operate is dependent on establishing and maintaining good relationships with the communities that live near the group’s operations. To achieve this, the group aims to:
  • ensure that all formal and customary community land use rights are respected and transferred to the group with the FPIC of the rights-holders
  • assist the communities which are affected by REA’s operations to become socio-economically self-sufficient by implementing community development programmes and smallholder schemes

In 2019, as part of a general restructuring of departments throughout the group in order to achieve efficiencies, the communities and smallholder teams were merged to better align their goals and activities.  The merged community and smallholder teams work with the local communities to develop good relations with the group, to support the livelihood of these communities and to address any potential negative impacts of the group’s activities.  As well as supporting smallholder farmers growing oil palm, the group also encourages the local communities to diversify their food production, by marketing other agricultural products, such as corn, vegetables and rice, and provides support in the development of fishponds, irrigation of rice fields, and with the distribution of seeds.

Land use rights

Land tenure in Indonesia is complex, with distinct legal and customary systems for allocating land use rights administered by numerous authorities that operate at the national down to the sub-village level. This frequently results in overlapping claims to a particular area of land between companies and local communities as well as between villages and individuals. Consequently, an area of land leased to a company by the government for the purpose of oil palm cultivation will, almost without exception, be encumbered with an array of formal and informal land use rights.

REA's Responsible Development policy and Human Rights policy demonstrate the group’s commitment to indigenous and local communities' rights, and the rights of any person affected by its operations, in accordance with applicable Indonesian regulations and the International Bill of Human Rights, the core conventions of the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work, the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and ILO Indigenous and Tribal Peoples Convention (no. 169).

The Responsible Development policy applies to all land developed by REA that will be either owned by REA or its associated smallholder cooperatives and independent smallholders. REA ensures that any third party contractors involved in the development of land also adhere to this policy.

The Human Rights policy applies to any person affected by the operations of any company within REA, including employees at any level, all contractors, suppliers and local communities.

The Free, Prior & Informed Consent (FPIC) of local communities is obtained prior to development: REA endeavours to ensure that everyone with legal, customary (or traditional) land tenure and/or ownership and/or access/use rights to the land is identified and fully understands the positive and negative implications of the proposed land development. REA respects the right of local communities to give or withhold consent to oil palm cultivation on land to which they have legal, customary (or traditional) land tenure and/or ownership and/or access/use rights. REA engages in negotiations and provides fair compensation to those with such legitimate rights to the land. During these negotiations communities can choose to be represented by their own cultural, social and political institutional bodies.

Going beyond essential FPIC, the group also engages in regular discussions with village members and with the (customary) head of village. In carrying out activities in the villages that surround the group’s estates, the Community Development team seeks to always involve community representatives from the relevant village, so that the ensuing activity is the result of a joint discussion between the community and the company. This also means that when determining the area of farmers' land, participatory mapping is conducted together with the management of the cooperative and the landowner.

Community relations

Good relations and mutual respect between the group and the communities impacted by its operations are of fundamental importance to the living conditions of the local communities and to the group’s ability to operate sustainably and efficiently. Developing and maintaining these relationships has not always been easy. With over 60,000 people inhabiting villages adjacent to our concessions and a population of over 10,000 employees and their families living in housing within our concessions, there are a wide variety of ethnicities, personalities and priorities that need to cohabit in harmony. Regular meetings take place between members of the experienced in-house teams from the village affairs department and REA Kon and the representatives of these communities to establish, maintain and improve relationships, offering the opportunity to discuss and resolve concerns that may arise relating to the group’s operations. Our village ambassadors hold formal and informal meetings with village and religious leaders, work with local farmers, fishermen and women’s groups and run education programmes in collaboration with the local schools. Our security teams work closely with local police and army personnel to uphold the law, safeguarding our operations, employees and local communities from criminal activities. Interacting with every faction of the surrounding population allows local people to learn more about how our business operates and provide feedback to help us overcome any negative impacts together. By creating opportunities for dialogue with these stakeholders, we reduce the frequency and severity of disagreements.

Establishing an oil palm plantation in Indonesia can involve various land claims by communities as a result of overlaps between plantation land allocations and land customarily used by the communities.  Not all land claims lodged by villagers are found to be legitimate and the village affairs department works to resolve any such claims effectively and transparently.  Land rights claims against the group have decreased in recent years, from 70 in 2016 to 27 in 2017, three claims in 2018 and nine claims in 2019.  The nine claims lodged in 2019 related to some 917 hectares, of which six claims in respect of 909 hectares proved legitimate.  Four land claims were fully resolved in 2019, two of which originated from 2018.

The group’s process for resolving land conflicts, if any arise, is shown below:

Procedure for the resolution of land rights claims

Resolution of land rights claims

Over the last 20 years, the group has invested considerable time and effort to ensure that its operations do not negatively impact local communities but rather contribute to their livelihoods. Whilst this was more of a philanthropic approach in the early years of the group’s operations, it has evolved into established schemes designed to ensure that local communities share in the benefits generated by the group’s operations without being dependent upon them. Initiatives developed to achieve this include maximising employment opportunities for local people, supporting and improving local businesses, expanding smallholder schemes and investing in infrastructure projects that will catalyse further development. Training and support is provided for these projects to encourage independence in recognition of the importance for local villages to have control over the management and maintenance of their own resources.

In 2013, REA adopted a new vision for its community development programme: to become a leading partner in helping the community to become socio-economically self-reliant. This vison is underpinned by a community development strategy which aims to have long term positive impacts on both the group’s relationship with the local villages and their welfare. The key elements of this strategy are:

  • To prioritise investment in infrastructure projects, particularly access to electricity, clean water and roads. REA will consider supporting other infrastructure projects proposed by local communities as long as they will benefit the village as a whole
  • To provide education and training that will assist members of the local communities to enter employment or establish their own business
  • To involve local government and neighbouring companies in designing and implementing community development programmes wherever possible.

Clean water

Water treatment facilities installed by the group provide 17 local villages with access to clean drinking water. Once constructed, responsibility for managing the water treatment plants is handed over to the respective villages. The village operators are provided with the training necessary to manage the plant and REA works with the village government to ensure that all operating costs are covered by their annual budget.

Food security

The company is committed to ensuring food security in the local communities by maximising local sourcing and assisting with crop diversification, access to food and markets. In addition, the company focusses on providing groups of farmers and villagers in the local communities with support and the provision of agricultural inputs such as vegetable and rice seeds, fertilisers and land preparation. The community development team has provided training to villagers in rearing and selling catfish as a source of fresh meat and protein for local villagers, as well as training and marketing support to vegetable and livestock farmers enabling them to access new markets for their produce and helping secure local food sources for the community. Company support for a rice growing enterprise run by a local agricultural group has enabled rice yields to be significantly increased and thus meet the requirements for the entire village, replacing rice imports and allowing the profits to be reinvested in further agricultural enterprises.

Green electricity

Since April 2015, villages in the vicinity of REA’s operations have been supplied with renewable electricity generated by the group’s methane capture facilities as a result of a pioneering collaboration between the group and the Indonesian national electricity company, PLN. REA has invested in the installation of the three gas engines needed to generate an additional three megawatts of power, in addition to the four generators providing power for the group’s own use; PLN has installed the infrastructure necessary to connect 26 villages (comprising some 7,000 households) to this supply of renewable energy. This includes 15 villages that were not already connected to PLN’s existing transmission line in the area, which previously supplied electricity produced from diesel powered generators. There is potential for the supply of electricity from the group’s methane capture facilities to surrounding villages to be increased from three to eight megawatts in future.

This collaboration brings material long term benefits for the local population, the planet and the group’s business. PLN, which controls all sales of electricity in Indonesia, purchases from REA the electricity utilised by the local communities. Communities who choose to have electricity meters installed have access to a reliable source of electricity, which should act as a catalyst for socio-economic development. Since many of these villages previously relied on diesel powered generators, switching their supply to electricity from a renewable source reduces diesel consumption and consequently GHG emissions.

Other support

In the past 2 years, the community development team has supported communities with the provision of materials for constructing community meeting houses, places of worship (mosques and churches), repairing sports facilities and public roads, supporting arts and cultural activities (such as the Erau Festival, Mecaq Undat), with supplementary nutrition for toddlers, and with support for educational activities.