This document summarizes a political economy study of fires and haze in Riau Province, Indonesia. The study found that fires are often used to clear land for oil palm plantations, which is a major driver of the local and national economy. Multiple actors benefit from the fires, including village heads, land claimants, farmer groups, and marketing teams. However, the environmental costs of fires are not internalized. Reducing demand for illegal land clearing and enforcing spatial plans could help address the issue. Transparency and engaging civil society may weaken patronage networks that hinder effective policymaking. Regional cooperation is also needed given Singapore and Malaysia benefit economically from Indonesian palm oil.

1. THINKING beyond the canopy
Political Economy of Fire and Haze
Herry Purnomo, Bayuni Shantiko and Haris Gunawan
Kementerian Lingkungan Hidup dan Kehutanan
September 28th , 2015

2. THINKING beyond the canopy
El Nino and Cost of Haze
▪ Riau - $ 2 billion
▪ Singapore - $1.5
billion
▪ ASEAN - $10 billion
▪ Who gets benefits
from fire?

3. THINKING beyond the canopy
Indonesia and Oil Palm
▪ Fires are often used to clear land for agriculture
because it is cheap and easy.
▪ Demand for land in Indonesia is mostly driven by a
global demand for palm oil.
▪ Indonesia already provides 52% of the world’s oil
palm supply in 2014 but with investment support
from Malaysia and Singapore
▪ 11 million ha of oil palm plantations - owned by
Indonesian, Malaysian and Singaporean companies
- are exporting 33 million tons of palm oil, reaping
revenues of US$18.4 billion in 2014.
▪ Oil palm is clearly a major driver of local, national
and regional economic growth.

4. THINKING beyond the canopy
Political Economy Study
▪ Funded by DfID-UK (January-December
2015) – Extended to 2017
▪ Aims to better inform decision makers with
an understanding of the on-the-ground
dynamics (economic, social, and political)
that are resulting in fire.

5. THINKING beyond the canopy
Sites and Methods
▪ Riau Province
▪ 11 sites represent clearly
identifiable fire ignition points
▪ Part of the largest fire events in
2013, 2014 and 2015
▪ Methods
• Mapping, surveys, policy
reviews, FGDs, CBA and
network analysis.

6. THINKING beyond the canopy

7. No Site name District Characteristic
1 Ayu Junaidi Dumai Fire occurred in community land (2014)
2 Giam Siak Bengkalis Fire occurred in state land (2013, 2014)
3 Pulau Rupat Bengkalis Fire occurred in village proliferation area
(2013, 2014).
4 Rokan Adi Karya Rokan hulu Fire occurred in APL (area penggunaan
lain/land for other land use) and private HGU
(hak guna usaha/land cultivation right) (2013)
5 Satria Perkasa
Agung (SPA)
Dumai Fire in state land and far from
village/settlement area (2014)
6 Sumatra Lestari (SL) Rokan Hilir Fire in community land (2013)
7 Suntara Gaja Pati
(SGP)
Dumai Fire in private HGU land (2013, 2014)
8 Torganda Rokan Hilir Fire occurred in village proliferation area
9 Tumpuan Bengkalis Fire in private HGU land (2010)
10 Buruk Bakul Bengkalis Fire in land ex-managed by cooperative
(2014, 2015)
11 Kampung Jawa Bengkalis Fire in community land (2015)

8. THINKING beyond the canopy
Findings
▪ The situation on the ground is really complex
▪ Caused by multiple actors
• Government, private actors, local community and
non-state actors
▪ Multiple land types
• State forest area, corporation concession,
private/community lands
• Peat and mineral soil
▪ Multiple drivers
• Economy, politic, social and climate/weather

9. There are policies but not effective…..WHY?
Laws and regulations
Law 41 (1999) on Forestry
Government Regulation 4 (2001)
on Forest and Land Fires

12. Who gets what: Slash
and clearing cut
Village head & officers
$88 (13%)
Land claimant,
$29 (4%)
Farmers group member, tree
cutting $77(12%)
Farmers group member,
slashing $96 (14%)
Marketing team
$38 (6%)
Total Benefit
Slash & cut
$665/ha
Farmers group organizer $338 (51%)
Economy of Fire

13. Who gets what:
Burning land
(ready to plant)
Village head & officers $88
(10%)
Land claimant,
$38 (4%)
Farmer group member,
tree cutting $77 (9%)
Farmer group member,
slashing $96 (11%)
Marketing team,
$54 (6%)
Total
Benefit
$856/ha
Farmer group organizer $486 (57%)
Farmer group member,
burning $15 (2%)
Farmer group member, cheap/free
land $2 (0.2%)

14. Village head & officers
$88 (3%)
Land claimant,
$38 (1%)
Farmer group member, tree cutting
$77 (3%)
Farmer group member, slashing
$96 (3%)
Marketing team,
$54 (2%)
Total
Benefit
$3,077/ha
Farmer group organizer
$1567 (51%)
Farmer group
member, burning
$15 (1%)
Farmer Group
member, cheap/free
land $2 (0.1%)
OP development
$992 (32%)
Farmer group member, OP
maintenance wage
$147 (5%)
Who gets what:
Three-year oil
palm

15. Network of Actors
Degree Centrality: The most influential actors in land
transaction causing fire

16. THINKING beyond the canopy
Between-ness centrality: The most influential actors in
brokering land transaction

17. THINKING beyond the canopy
Corporate actors connected to their groups and elites at
local and national level

18. THINKING beyond the canopy
Fire Fighting VS Fire Prevention
▪ Many government agencies prioritize fire fighting
(e.g. water bombing, rain-making) over fire
prevention (e.g. canal blocking, community-
based water management, conflict resolution,
spatial planning)
• Visible and creates many new income streams
through jobs, equipment and other payments
• Budget politic
▪ Needs to shift to fire prevention for long-term solution

19. THINKING beyond the canopy
Key points
▪ Many players benefit enormously from fire.
▪ The scale of these financial benefits means
livelihoods alternatives need to be significant.
▪ These players (elites or cukong) wear multiple hats
e.g. farmers, politicians, businessmen, government
officers and academician.
▪ Company staff and sub-contractors may be
undermining their companies' corporate
commitments
▪ Actors who get benefit are not those who suffer
from fire

20. THINKING beyond the canopy
Key points: Patronage Network
▪ These actors exchange information and form
complex social networks. Elites can influence
decision making processes at district and
national levels.
▪ Medium and large scale companies place former
high-ranking officers and eminent individuals as
commissionaires and advisors to liaise with
governments.
▪ These elites form protective patronage networks
that hinder the government’s capacity.

21. THINKING beyond the canopy
Key Actions
1. Market demand for illegal land for plantations must be
reduced and eliminated.
2. Clear spatial plans must be developed and enforced 🡺
giving them incentives to manage their land in a
sustainable way.
3. The environmental costs of fire and haze must be
internalized.
4. Patronage networks must be reduced through
transparency, civil society engagement, anti-corruption
measures and an efficient government bureaucracy
5. Singapore and Malaysia need to share responsibility of
fire and haze as they share the profits from oil palm.

22. THINKING beyond the canopy
Thank You
Prof. Dr. Herry Purnomo
• Scientist at Center for International Forestry Research
(CIFOR)
• Professor of Forest Management and Governance,
Bogor Agricultural University (IPB)
• Email: h.purnomo@cgiar.org
• Skype: herry.purnomo77
• Cell: 62-811-9500641