The impact of continuing rainforest transformation on hydrological functioning and other ecosystem functions in South East Asia remains uncertain. The vast majority of the local residents in our study area believe that the expansion of oil palm reduced the flow regulation function of a watershed causing more frequent flooding in the rainy season and water scarcity problems during the dry season. The research aimed to characterize surface runoff as an indicator of water flow regulation and simulate effectiveness of different mitigation options for surface runoff management in a watershed with rapid expansion of oil palm plantations. Our study started with plot experiments to characterize surface runoff used to adapt curve number (CN) values of the different land-use types required for SWAT modeling. Further, we carried out small watershed experiments to adapt the CN values of different mitigation options. The SWAT model performance was in satisfactory agreement with the Nash–Sutcliff efficiency values of 0.88 and 0.82 for calibration and validation, respectively. After successful model calibration and validation, we simulated the effectiveness of the following mitigation options: (a) frond pile management, and (b) frond pile management and silt pit treatment with a density of 20 units per ha. Both options were chosen for their simple construction enhancing their adoption and sustainable application. Frond pile management and the combination of frond pile and silt pit treatment reduced total surface runoff in a watershed scale from 151 mm to 141 mm (10%) and from 151 mm to 109 mm (31%), respectively. The mitigation options which were evaluated in this study were ecologically effective in regulating water flow through reduction of surface runoff. They were also economically viable, because the mitigation options increased the availability of water which can increase oil palm production while the implementation costs are low due to the simple design using frond leaves residues abundantly available onsite. Due to the fulfillment of at least two sustainability pillars, these mitigation options should be adopted as one evaluation criterion in the certification process carried out by Indonesian certification body for sustainable palm oil (ISPO). Further research is still needed to study optimal design criteria for mitigation options including their dimension, density and spatial distribution in a watershed.
