Last updated August 2008

Section: Indonesia > South Sumatra > Introduction



Partnership between communities and acacia pulp plantation in South Sumatra



Musi Hutan Persada is an Acacia Mangium plantation company situated in South Sumatra. MHP is a joint venture among a state owned company Inhutani II and private companies. The total extent of the plantation is 296.400 hectare positioned in three disjoint forest groups in six different districts. The biggest area is located in district Muara Enim which covers up to 70% of the total area. MHP supplies 2.5 million m3 pulp wood to Tanjung Enim Lestari (TEL) pulp mill every year. The area of MHP is planted with fast growing trees as the main product, i.e. Acacia mangium (95%).

Indonesia’s pulp & paper

Since early 1990’s, the Indonesian’s pulp & paper industry expanded very rapidly. Expansion was temporarily held in 1997 due to the economic crisis. However, by 2000, several projects were reinstated and completed. The capacity of the TEL mill, which is specially made in 2000, has a pulp production capacity of 450,000 Air Dry tons/year.


Disputes over lands between local and customary communities and forest companies during Soeharto era were very much restricted. The local army and government suppressed the disputes. Soeharto’s resignation in May 1998, constituted the beginning of the customary community movement to demand the re-run of their customary rights including communal land rights. The conflicts between the local communities and the companies occurred over (1) the land appropriation process; (2) environmental impacts; and (3) recruitment of employees.
The forest plantations are located on state land. Some of these areas were previously used by local communities to grow rubber trees as their primary source of income. The villages surrounding the plantation asked for more benefits from MHP, especially during the crisis years.

The community

The communities surrounding MHP are mostly traditional farmers. The others are MHP workers, traders and local government officials. The farmers grow rubber plantation, field rice and Acacia mangium plantation in collaboration with MHP. The local people are used to have ‘Marga’ concept to organize the resources among themselves. ‘Marga’ is a traditional institution with land rules and is led by a trusted leader coming from the bloodline of the previous leader. Since 1982, this system was replaced by the concept of ‘Desa’, which is a line structure of local government that consists of several ‘Dusun’, and each ‘Dusun’ comprises of several ‘Talang’. Currently, ‘Desa’ is a formal system of village organization, but ‘Marga’ still exists informally.

Partnership schemes

As a result of the conflicts, MHP developed two partnership schemes with the local communities in 1998 to resolve land use issues and secure the MHP concession. These partnerships are:

  • MHBM; Mengelola Hutan Bersama Masyarakat; Managing Forest with Community regarding the concession lands.
  • MHR; Mengelola Hutan Rakyat; People Forest Management; regarding the communities’ traditional lands.

MHBM area amounts to 80,000 hectare and MHR area to 5,000. MHBM was set up when it was already planted to avoid conflicts. While, the MHR was set up when there was no plantation yet. It is based on the proposal of an individual person to MHP to plant trees in his/her land, regardless the land status. It can be seen as an extension of MHP plantation, since MHR area located outside MHP’s concession area.

The problems that have been identified regarding MHBM and MHR are:

  1. How to maintain the MHBM and MHR in the long term giving the complexity and dynamic of the cooperation?
  2. How to improve the welfare of the stakeholders, particularly the communities?
  3. How to settle the land status to give more certainty for long term cooperation?


The communities don’t think the partnership schemes are fair, because a power imbalance between them and MHP. Conflicting interests among community members also weaken local institutions and threaten to cause livelihood problems related to employment and the fair sharing of benefits among community members. These livelihood problems sometimes lead to local communities fighting MHP for the right to grow rubber or oil palm on their traditional land.

MHP has been known up till now as an example of a well-planned Indonesian forest plantation, so its failure or its success might influence the future development of wood industries in Indonesia. TEL is the only pulp mill in Indonesia which uses 100% plantation wood. MHP and TEL provide an example of good management in timber production and processing, but they need to improve their operation with regard to social and environmental issues.


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