Previous PageTable Of ContentsNext Page


Chapter 9

Syamsul Fikar13


Integrated HTI14 schemes or "Model HTI-pulp terpadu" have been established since 1995. Some of the initial concepts have been modified, but the principles have remained, and the schemes have been running quite well. The partnership scheme was initiated to establish pulp wood plantation (Acacia species) under individual long-term agreements of 45 years with many villages, according to rules determined by the rights and duties of both the company and the community. The company provides cash incentives as the means for respecting the local, traditional value of community lands, calculated on the basis of the proportion of planted area. Included in the agreement are incentives for: land and infrastructure; establishing high yielding rubber plantation on 7.5 percent of the Acacia plantation; developing the local species plantation on 10 percent of Acacia planted (for example, if the Acacia plantation realization is 100 ha, the company will establish 10 ha of local species); working opportunities; revenues from royalties on the 10 percent of Acacia wood production in every rotation; and community development activities. Cooperation or partnership might face obstructions in the future from the landownership status. There is an increasing preference for the land to become individually owned, even though the scheme was designed for a partnership with a group of community. Indeed, this scheme was designed only for partnerships between the company and the village communities as a group, but the company has to consider that the partnership scheme also needs to accommodate the individual contracts/agreements.


PT Finnantara Intiga is a company located in two districts in the same province of West Kalimantan Province, in Sintang and Sanggau. According to the Ministry of Forestry Decree No. 750/Kpts-II/1996, Finnantara Intiga was granted 299,700 ha concession areas. This area will be reduced to an effective 187,000 ha owing to overlapping land use management (the proposal now under process). Since 1996, the realization of Acacia plantation has been 30,000 ha. The company already made an agreement with 130 villages on land use management with local people (7,500 householders and about 30,000 inhabitants inside the concession area).

The ethnic groups that live in Finnantara concession areas include the Dayak, Malay and transmigration families who came from the island of Java. Most of the people are Catholic. According to a CIFOR study done in 2001, the average income per capita of the local people in the Finnantara area is Rs 477,894 per year (US$48). Livelihood strategies are mostly farming, and shifting cultivation is still commonly practised in the area.

The shareholders of PT Finnantara Intiga are Nordic Forest Development Holding Pte. Ltd (NFDH) and PT Inhutani III. (Prior to June 2000, PT Gudang Garam, an Indonesian cigarette company, also held shares.) NFDH is a subsidiary company of Stora Enso, one of the biggest pulp and paper industries in the world. Since January 2002, 67 percent of the shares were held by NFDH and the remaining 33 percent by Inhutani III.

According to its company mission, the purpose of PT Finnantara Intiga is to establish and operate a timber estate in Indonesia. PT Finnantara Intiga envisions a professionally managed timber estate, with a minimum net plantation area of 50,000 ha by June 2003, operating on the basis of economic, environment and social sustainability. It is to produce wood at a minimum of 1,000,000 m3/ha to be used as raw material and marketed in Indonesia or elsewhere. PT Finnantara Intiga plans to obtain ISO 9001, Quality Management System certification during 2002; ISO 14001 and SMK3 (Health and safety management system) certifications are also expected.

This paper only describes company activity during 1995-2002 in developing the cooperation scheme of "Model HTI-pulp terpadu", which is also called the Integrated Timber Plantation Model. This scheme was aimed to establish Acacia forest plantation together with the community in PT Finnantara Intiga's concession area.

The Integrated HTI Cooperation Scheme or "Model HTI-pulp terpadu" -
PT Finnantara Intiga

The Integrated HTI scheme or "Model HTI-pulp terpadu" aims to develop the Acacia plantation, and concurrently to implement community development programmes, so that joint plantations can be managed sustainably in the long term.

In establishing the Integrated HTI Scheme, PT Finnantara Intiga considered the following aspects:

Based on the above conditions, PT Finnantara Intiga created a model for establishing a partnership with the local community for pulp wood plantation. Such a partnership would guarantee the plantation to be sustainable in the long term. The partnership scheme is described as follows:

The development of the agreement process with the local community

Cooperation between the community and the company is developed by following certain closely linked procedures and steps. The company starts with land use planning, followed by field orientation, social preparation, integrated extension programmes, land measuring and mapping, negotiation, and finally, development of an agreement. The implementation of the agreement should be included in the process of plantation establishment.


Planning activities are supported by digital aerial imagery (DAI) to identify the potential land. The company can identify land cover of the area in more detail, based on these DAI photos.

Field orientation

Field orientation is needed to assess the field condition that was already identified from DAI, and provides information about social conditions and accessibility of the areas.

Social preparation

The company arranges with all community members who represent villagers or community leaders to inform them about the HTI pulp wood plantation that would be established in their areas. The meeting can be arranged formally or informally, especially if it informs the community leader. After providing information, the company lets the community members decide whether they would like to continue the process or not.

Integrated extension

If the local community provides its positive feedback of the HTI Integrated Schemes, the step will be continued in other meetings involving MUSPIKA15 or even the district (bupati) head, depending on the situation. In each meeting, the company may learn of the villagers' overall opinions as to whether they will accept or not, or if there is still any confusion on the information provided.

Measuring and mapping

If HTI activities are acceptable to the villagers, the company will proceed with the activities to measure the areas provided by them. However, the villagers may decide not hand over the total areas as agreed, depending on the land status. Rather, they may decide to hand over just 30-50 percent of the areas initially provided.


Negotiations can be held after land measurements and after the big portions of the areas have been cleared, since incentives and/or compensation are calculated according to HTI plantation areas that can be planted. In this step, the land use plan in the subdistrict level could also be discussed to design the location of HTI plantation, the rubber plantation, and local species areas.

Signing the cooperation agreement

Before each agreement with each village is signed, the company arranges one meeting with the community and explains the draft of the agreement to the villagers, who will sign afterwards. In the meeting, the company will clarify the contents of agreement and the details of cooperation, including the rights and duties of both parties. After everything is clear, a meeting will be held for the signing of the agreement, and attended to by the entire village community, company representatives and MUSPIKA.


Before plantation establishment activities start or land preparation is conducted, there is a community tradition called Ngudas. The Dayak people believe this tradition has to be observed in order to prevent something from going wrong, and also to indicate that the cooperation can be continued. All community members have to obey of the tradition of adat law.

Implementing cooperation means following all of the contents of the agreement that have already been agreed upon by both parties. The establishment of plantation will be the main activity, and the community development programme will be implemented along with it.

Challenges in implementing the "Model HTI-pulp terpadu" scheme

During seven years of implementation from 1995, the schemes have been running smoothly. The first implementation year was not totally successful: obstacles occurred because the local community did not clearly understand the nature of the Integrated HTI schemes activities; some of them had bad initial experiences under the same project, such as Reboisasi Project and PT Inhutani III HTI Project. Moreover, the community has always compared the benefits of HTI schemes with the oil palm plantation that they already knew so well.

The model started running and became accepted in 1997 after the company modified some approaches by involving local government (Musyawarah Pimpinan Kecamatan [MUSPIKA]) in the integrated extension programmes for the local community. During 2000-2002, PT Finnantara Intiga modified some components of the schemes, such as increasing the amount of compensation/incentives. They increased land and infrastructure incentives so that rubber plantation became 7.5 percent of the area planted, and modified the policy of local species development. The most effective modification occurred when the company decided to shift from mechanical to manual land preparation, a simplification of the plantation establishment, thereby increasing the community's income.

Some challenges in implementing the entire agreement can be explained as follows:

Conflict in implementing the Integrated HTI Scheme or "Model HTI-pulp terpadu"

Some conflicts have been occurring during seven years of scheme implementation, most of which were not related to the schemes arrangement it self. Some were caused by personal interests of individual community members, and some were stimulated externally. The conflicts arose in when the company's (temporary) camp was burned down and when company assets, such as cars, tractors, motorbikes, etc., were hijacked. There were also a few cases of the plantation being set on fire owing to personal conflict among community members.

The company should handle conflicts by deliberation (bermusyawarah) with the community. A few cases deemed criminal were solved through the courts. MUSPIKA always acted as a facilitator in conflicts with the local community.

From 1995 to 2002, the biggest case of conflict was caused by land status. Land status may be problem because there is no clear boundary between two individual landowners or between community group landowners from two different villages. The negative impact of the conflict could be overcome by a land agreement, or the landowner can be made to withdraw from the cooperation/partnership. According to tribunal law in the past, the land always belonged to the community group, but today there are increasing preferences for individual-owned lands. This is due to the increased value of the land because of the development of large-scale activities by some companies like oil palm and HTI.

Preferences of individual land status will become a challenge for future HTI plantation establishment, because the company established the scheme with the community as a group and the agreement was prepared accordingly. If the company prepares agreements with individual landowners, it should arrange that all technical aspects are handled in the agreements one at a time, making for a vast number of different land agreements.


The partnership scheme needs the full commitment of both parties (the community and company), as well as government support. The schemes could be implemented better if both parties benefited from HTI activities. From the company itself, a full commitment from top management down to the field staff level is required; they should all share the same views so that none of the parties misses any information. The field staff should keep implementing the schemes according to the objectives.

Transparency and open communication are essential to establish mutual agreement between the company and community. The company staff in the field occupy an important position because they closely communicate with the community on a daily basis to run field activities, as field staff become representatives of the company.

13 The Land Use Manager of PT Finnantara Intiga, Sanggau (7 May 2002).

14 Hutan Taman Industri (HTI) is forest plantation established to increase the potential and quality of forest production area with intensive silviculture to meet the forestry industry's need for raw materials (Ministry of Forestry Decree No. 70/Kpts-II/95).

15 MUSPIKA is the Subdistrict Board consisting of a head, a police chief, and a military chief.

Previous PageTable Of ContentsNext Page