Communities

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 these communities to become less dependent on oil palm cultivation by developing other businesses to diversify their food production and income with agricultural products, such as corn, vegetables and rice, and supporting them with 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 and smallholders 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. Regular meetings take place between members of an experienced inhouse team and 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. Inevitably, Covid-19 impacted the implementation of some initiatives during 2020 but the constraints resulting from the pandemic were well understood by the communities.

As well as supporting smallholder farmers growing oil palm. the group also encourages these communities to become less dependent on oil palm cultivation by developing other businesses to diversify their food production and income with agricultural products, such as corn, vegetables and rice, and supporting them with the development of fish ponds, irrigation of rice fields, and distribution of seeds.

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 27 in 2017 to a handful of claims in each year since. Of the five claims lodged in 2020, together relating to some 246 hectares, two were new claims that proved legitimate and were fully resolved. The remaining three claims are carried over from previous years, are not considered to be legitimate and are in the process of being resolved.

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

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. This has evolved into schemes designed to ensure that local communities share in the benefits generated by the group’s operations without being dependent upon them. Initiatives 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. In supporting projects, the group recognises the importance of local villages having 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

Renewable energy generated by the group and distributed through the infrastructure of the Indonesian government’s energy company, PLN, is made available to 26 villages in the vicinity of the group’s operations. These villages comprise over 7,000 households that have so far opted to install the prepay meters supplied by PLN.

 

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

During 2020, the group started working with the local government and communities to develop a network of trained community groups to promote fire prevention and develop fire-fighting capabilities in, initially, eight neighbouring villages. The community groups are intended to encourage efforts to reduce the traditional reliance on fire for clearing village land and work in parallel with other group funded community development initiatives to promote forest and habitat conservation. This project will be extended into additional villages.

Under a recent government initiative, the group runs waste and recycling centres in the housing areas for each of its estates and mills. The centres collect waste from employees and their households and the waste is then collected by two local district bodies as part of the inorganic waste management programme sponsored by the regional Environment and Forestry Service. Households receive financial compensation based on the volume of waste deposited and the group benefits from the reduction in waste collected for landfill.