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The Kalimantan/Malaysia border extends roughly 1,800 km between West and East Kalimantan, Sarawak and Sabah, occupying segments of eight Indonesian districts. The borderlands are characterized by competing land uses and problems of smuggling and security. In the past decade massive amounts of both labour and illegal timber have moved from Kalimantan to wealthier Malaysia.
Much of the border region has global environmental significance, with high levels of biodiversity and endemism. The 'Heart of Borneo' project, initiated in April 2005, is a trans-boundary three-country endeavour (Indonesia, Malaysia and Brunei) assisted by the Worldwide Fund for Nature (WWF) and other NGOs. Three major Indonesian national parks straddle the border and others are planned, with cross-border parks in Sarawak and Sabah. While the terrain is largely hilly to mountainous, there are also significant wetlands. In May 2005, President Yudhoyono announced the construction of an 'oil palm corridor' along the border, using largely Chinese funding. It was argued that increased oil palm cultivation, providing thousands of jobs to mainly transmigrant workers, would reduce cross-border migration to Malaysia. The border region, a 'no man's land' of lawlessness and illegal logging, would be controlled by a stronger army presence. Government estates in July 2005 calculated that a mega-project of 1.8 million hectares through a 10km wide corridor would form 'the world's largest oil palm plantation'. An accompanying map, subsequently rejected by the central government, showed oil palm traversing the national parks, regardless of their protected status or suitability for cultivation. These activities caused alarm among environmentalists, especially WWF, which joined international research institutes, NGOs and some local communities in campaigning against the plan.
However, the corridor had strong supporters among provincial and district governments, which had long sought improvements in border economies and infrastructure. In 2000 the Governor of East Kalimantan had suggested a 'safety belt' of a million hectares of oil palm along the border, to absorb ex-illegal workers expelled from Malaysia. In Nunukan district, which shares the border with Sabah, some of these workers (mainly Bugis) have indeed been settled as new transmigrants on oil palm estates, while a proposed wetland national park (Sebuku-Sembakung) has been quashed.
In a major back down, the Minister of Agriculture announced in May 2006 that in fact only 180,000 ha of the borderlands were found to be suitable for oil palm. The protected areas of the 'Heart of Borneo' would not be touched, that initiative having been officially ratified two months earlier by the governments concerned. Unanswered questions about the aborted 'mega-project' concern its rationale, especially the potential roles of the Chinese (recipients of large amounts of Indonesian timber) and of the army, eager to station 'battalions' along the border.
WATCHPOINT: Despite this apparent 'win' for conservationists, further contests are likely in the Kalimantan/Malaysia borderlands, as pressure continues for oil palm expansion, control of illegal logging and increased military surveillance.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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