Residents of Palawan Island in the Philippines have united to take on the companies that they say have grabbed their land.

Palawan is a large island-province of the Philippines that lies midway between the rest of the archipelago and Borneo.

The great beauty and biological value of the island was validated in 1990 when the United Nations Educational, Scientific and Cultural Organization (UNESCO) conferred the status of ‘Man and Biosphere Reserve’ on this tropical paradise.

Palawan’s pristine coastline gives way to coconut palms and then lush, rolling, forested hills, speckled with tribal houses. The municipality of Quezon in central Palawan is the domain of the Indigenous Tagbanua people.

In recent years, however, there has been an onslaught from mining and agribusiness keen to exploit its natural resources.

Particularly pernicious is that in 2002 the Philippine government decided to expand palm oil cultivation in the archipelago to reduce imports and to fulfil the country’s rapidly growing domestic consumption.

Attracted by promises of increased incomes, many residents acceded and signed over a proportion of their private farmland for palm oil cultivation. But the farmers say they’ve yet to receive any payment, and are even being held responsible for the plantations’ set-up and loan costs.

As a consequence, residents of Palawan Island in the Philippines have united to take on the companies that they say have grabbed their land. Seventeen indigenous communities on this island province are campaigning for justice from the companies that have grown palm oil on their farms.

Government backs two major companies in mass expansion of palm oil

In 2002 the Philippine government decided to expand palm oil cultivation in the archipelago to reduce imports and to fulfill the country’s rapidly growing domestic consumption.

That same year, the Department of Agriculture calculated that annual palm-oil production was at 54,333 metric tons, with consumption running at 94,400 metric tons a year. In addition, growing demand was expected to have reached 171,700 tons by 2015.

The Philippine Palm Oil Development Council Inc. (PPDCI) published an ambitious roadmap for expansion in the Sunstar newspaper in the Philippines on 27th August 2015. It reported that the PPDCI “is eyeing another 300,000 hectares to expand oil palm plantation in a bid to make the country self-sufficient in palm oil products. The council hopes to achieve its expansion target, under its palm oil industry roadmap, within the eight years from 2015 to 2023.”

Two major palm oil companies operate in Palawan: Palawan Palm & Vegetable Oil Mills, Incorporated (PPVOMI) and Agumil Philippines, Incorporated (AGPI). PPVOMI is 60% Singapore-owned and 40% Filipino, whereas AGPI is 75% Filipino-owned and 25% Malaysian.

The parent company of AGPI is Malaysian-registered Agusan Plantations Incorporated. Other smaller companies are also joining in the ‘golden oil’ rush. AGPI has established a palm-oil mill in the Municipality of Brooke’s Point in South East Palawan for the processing of plantation harvests. As such, it buys 100% of the PPVOMI production.

With 70% of processed oil due to be exported to Singapore, China and Malaysia, the original rationale to supply domestic production appears to have been contradicted.

Tricked into handing over land for palm plantations

In deals struck with palm-oil companies, different communities in central and southern Palawan agreed to lease areas of their farm and forest land in return for a share of the income from the palm oil profits.

In other cases, local people leased parcels of land under their customary native titles to palm oil companies at low rents.

“We wanted to plant palm oil because the conditions were good – the conditions offered by the companies. But up until now, it has been six years and we have not received any benefits”, said Graciano Muniz, tribal farmer from Aramaywan community [Baringay], in the municipality of Quezon in central Palawan.

In the seven years since the first leases began, none of the participating cooperatives have reportedly received a single payment, despite four years of harvest since the plants reached production maturity at around three years.

“The landowners were fooled by this company. To the extent that prior to that they had lands to till, they had lands to plant the crops for their living”, said Rodiar Carlio, a member of the Coalition against Land Grabbing (CALG), an NGO galvanizing resistance to the palm oil companies in Aramaywan and neighboring communities. He is negotiating with AGPI for a solution to the dispute.

Everyone is involved

Palm oil has increasingly entered the world’s food supply chain in the past 20 years and is now found in a multitude of consumer items from biscuits to shampoo. Viewed by food companies as a wonder crop, the prolific harvests of palm fruit are rich in saturated oil.

However, palm crops have courted controversy wherever they have been grown. Huge swathes of the great tropical forests on the island of Borneo were felled to make space for oil palm plantations. Since then, cultivation has continued to spread throughout Southeast Asia – and even into Africa (where the wild oil palm originates) and South America – to feed an insatiable demand for the golden oil.

When sales teams from AGPI originally came knocking seven years ago, some tribal and farm communities were attracted to the high incomes the company promised relative to what they received for their dominant cash crop of coconut palm, which is still widely cultivated. So many signed over a proportion of their private farmland for palm oil cultivation.

Roberto Bardolassa is one of these farmers. He moved to Palawan in 2007 from Rizal Island to cultivate his wife’s land. “At that time the company was organizing and looking for landowners to cooperate with their company … so we decided to be their partner”, Bardolassa said.

Lies lead to land grabbing

Bardolassa and his wife leased three hectares to AGPI, but have since regretted it. “I think that what has happened here is indirectly land-grabbing”, he said. “If not why can’t we till our own land? The rights of the poor people here – especially the farmers in Palawan, are being exploited by that crocodile Agumil.”

Some elderly farmers told Mongabay that they found the scheme especially attractive because the company promised to arrange the plantation maintenance labor and provide a steady income that would ensure pensions.

“The original agreement – based on the conditions of the landowners and the co-op officials-meant there was a good possibility that we could improve our standard of living”, said farmer Graciano Muniz. “However, we have not received those benefits.”

Pasteur Motalib Kemil, tribal leader of the Tagbanua tribe in the municipality of Quezon, is Chairman of CALG. He told Mongabay that the 25-year contract was written in English, which the vast majority of farmers did not understand. He explained that officials from the tribal cooperatives often signed up on behalf of participating farmers and the title deeds for the land were handed over to the company for safekeeping.

Kemil says he is not alone in suspecting that the company has passed the farmers’ land title deeds to the Land Bank of the Philippines (a government lender) as collateral to secure the loans used to set up the plantations.

Boy Soda, elected representative of the Palawan Tribe from Baringay Salogunin in Brooks Point told Mongabay: “We haven’t received a single payment for rental of our farmland – it has all gone to the Land Bank that provided the loan. These farmers provided their land titles as collateral to the Land Bank and it takes 25 years to pay before they receive their share of the profits from the harvest.”

Arcane contracts charge all costs to landowners – plus 14% interest

Land clearance and planting of the young palm-oil saplings was then billed to the farmers as a loan incurring 14 percent interest annually. Farmers complain that many of the contractual details were kept hidden from them.

Rodiar Carlio explained: “To our surprise even the officers of the cooperative had entered into a contract, they called it PTME, the Production Technical Marketing Agreement, and they initiated the management services agreement. But the signing of PTME was concealed before the general assembly. Even the officers who signed that contract had no total knowledge of what they were signing.”

The farmers had expected that their income would begin once the palm oil trees had matured to harvest stage, around three years. They had not expected to have to pay the set-up costs and the onerous rates of interest from the Land Bank, and they claim they were deceived throughout the contractual negotiations.

“We are paying the company for the equity, for the services that they are giving the cooperative”, Carlio said. “In our cooperative alone we owe the Landbank about 11 million pesos (US$237,000). Right now the interest is almost as much as the principal loan – another 11 million. With that 11 million plus another 11 million that is 22 million and then that is compounded annually at 14%.

“Under the contract the cooperative is required to pay all the debts for six years from the start of the harvest. But the cooperative, as we analyze, under the management of the company cannot pay its debts to the Landbank.”

Motalib Kemil shares Carlio’s opinion that once all costs are deducted from income accrued from the harvest, the farmers are unlikely to receive anything over the 25-year period, even if the company intended to make payments, which it shows no sign of doing.