Rogue Palm Oil Companies and Ecological Damage to Indigenous Communities in Kalimantan

 

Rogue Palm Oil Companies and Ecological Damage to Indigenous Communities in Kalimantan by GrokAI.

Introduction

The palm oil industry is a major economic driver for Indonesia, producing over 34.5 million tons of palm oil in 2016, with 96% coming from Kalimantan and Sumatra (IDN Times, 2019). However, the rapid expansion of palm oil plantations has led to severe environmental degradation and violations of indigenous rights. In Kalimantan, "rogue" palm oil companies—those operating irresponsibly—have caused deforestation, pollution, and land conflicts, devastating ecosystems and indigenous livelihoods. This article explores the ecological and social impacts of these practices in Kalimantan, drawing on verified data from credible sources like NGOs, academic reports, and trusted media.

Ecological Impacts of Palm Oil Plantations

The expansion of palm oil plantations in Kalimantan has caused significant environmental harm. A primary issue is deforestation. According to a 2025 Mongabay report, PT E.S.R., a subsidiary of a larger group, began clearing land in critical orangutan habitats in West Kalimantan, threatening up to 10,000 hectares of rainforest home to endangered species like the Kalimantan orangutan (Pongo pygmaeus). This activity is deemed "highly concerning" as it undermines Indonesia’s sustainability commitments and biodiversity conservation efforts (Mongabay, 2025).

Another major issue is water pollution. Research by the Ecology and Wetland Conservation Institute (Ecoton) from 2019 to 2021 found that the Sambas and Kapuas rivers in West Kalimantan were contaminated by waste from plantations and processing mills owned by two subsidiaries of W.I., namely PT A.I. and PT B.P.K. About 75% of 58 water samples from PT B.P.K.’s plantation ditches showed free chlorine levels exceeding regulatory standards, while 86% of 22 sampling points at PT A.I. had excessive phosphate levels (Mongabay, 2022). This pollution degrades river water quality, critical for local communities’ agriculture, fishing, and daily needs.

Peatland degradation is another pressing concern. A 2021 Human Rights Watch report highlighted PT S.R., a subsidiary of D.C. from South Korea, which established plantations on peatlands without meaningful consultation with local communities. Peatlands, vital for carbon storage and climate change mitigation, are damaged by drainage for plantations, leading to saltwater intrusion and increased soil salinity. This reduces crop yields for rice and vegetables, threatening local food security (Human Rights Watch, 2021).

Forest fires are also linked to palm oil land clearing. According to IDN Times (2019), burning forests to create plantations is a cheap and quick method but produces smog that damages the ozone layer and spreads to neighboring countries like Singapore and Malaysia. These fires also endanger endemic wildlife, such as orangutans, Sumatran tigers, and rhinos, by destroying their habitats (IDN Times, 2019).

Social Impacts on Indigenous Communities

Beyond environmental damage, rogue palm oil companies have sparked social conflicts with indigenous communities, particularly the Dayak and transmigrant populations. The transmigration program, which relocated people from Java to Kalimantan since the 1970s, often overlapped with indigenous lands, leading to land disputes. 

The Agrarian Reform Consortium (KPA, 2021) reported hundreds of agrarian conflicts due to the seizure of indigenous lands for palm oil plantations without fair consultation or compensation (Kompasiana, 2025). In Teluk Bakung village, West Kalimantan, smallholder farmers partnered with PT P.A.L.M. faced losses due to unfulfilled profit-sharing promises, leaving them with debts up to IDR 262 billion (BBC News Indonesia, 2022).

Indigenous communities also face intimidation and violence. Human Rights Watch (2021) documented that villagers protesting PT S.R.’s expansion faced harassment, intimidation, and legal action from police allegedly paid by the company. In 2019, about 47 residents, including children, fled to the West Kalimantan National Human Rights Commission office, fearing arrest after protests (Human Rights Watch, 2021). Similarly, in Teluk Bakung, farmers like Herkulanus Roby were imprisoned for demanding transparency from palm oil companies (BBC News Indonesia, 2022).

Social marginalization is another significant impact. Transmigration and palm oil expansion have widened gaps between indigenous communities and transmigrants. Kompasiana (2025) notes that a centralized development paradigm treating Kalimantan as Indonesia’s “backyard” has marginalized indigenous groups, stripping them of access to land and resources central to their culture and survival. The development of Nusantara, Indonesia’s new capital in East Kalimantan, raises concerns about further land grabs and migration waves, exacerbating these issues (New Naratif, 2022).

Responses and Efforts to Address Issues

Environmental and civil society organizations have taken steps to combat rogue palm oil practices. Ecoton has urged W.I. to address the Sambas and Kapuas river pollution by overseeing its subsidiaries and ensuring environmental protection (Mongabay, 2022). Environmental groups like Satya Bumi have called for halting PT E.S.R.’s land clearing and conducting comprehensive ecological audits to protect orangutan habitats (Mongabay, 2025). Human Rights Watch (2021) has also pressed the Indonesian government to enforce laws and protect indigenous land rights.

However, weak law enforcement remains a major challenge. Despite court rulings ordering PT S.R. to return land to communities (Human Rights Watch, 2021), implementation is often stalled. Policies like the Job Creation Law, which allows “legalization” of palm oil plantations in forest areas through administrative fines, are criticized for enabling rogue companies to evade accountability (BBC News Indonesia, 2023).

Conclusion

Palm oil plantations in Kalimantan contribute to Indonesia’s economy, but rogue companies like PT E.S.R., PT S.R., and W.I.’s subsidiaries have caused severe ecological and social harm. Deforestation, water pollution, peatland degradation, and forest fires threaten Kalimantan’s ecosystems, while land conflicts, intimidation, and social marginalization harm indigenous communities. The Indonesian government must strengthen law enforcement, ensure fair consultation with indigenous groups, and promote sustainable plantation practices to prevent further damage. Without decisive action, Kalimantan’s ecological and cultural heritage remains at risk.

-- Rangkaya Bada

Bibliography

• BBC News Indonesia. (2022, May 25). Palm Oil: Dayak Victory Against Palm Oil Company, ‘Lessons Learned from Prison.’ Retrieved from www.bbc.com.
• BBC News Indonesia. (2023, July 8). East Kalimantan: Hundreds of Thousands of Hectares of Forest Released for Palm Oil and Mining Benefiting Corporations. Retrieved from www.bbc.com.
• Human Rights Watch. (2021, June 3). “Why Our Land?”: Palm Oil Plantation Expansion in Indonesia Endangers Peatlands and Community Livelihoods. Retrieved from www.hrw.org.
• IDN Times. (2019, October 9). Potential to Destroy Forests: 7 Dangers of Palm Oil to the Environment. Retrieved from www.idntimes.com.
• Kompasiana. (2025, July 25). Transmigration to Kalimantan: A Failed State Project Leaving Social and Ecological Wounds. Retrieved from www.kompasiana.com.
• Mongabay. (2022, March 4). W.I.’s Palm Oil Plantations and Mills Allegedly Pollute Rivers in West Kalimantan. Retrieved from www.mongabay.co.id.
• Mongabay. (2025, May 13). Report: Orangutan Habitat Threatened by Palm Oil Company Clearing Kalimantan Forests.