The threat of Indonesia’s palm oil rush

The Jakarta Globe: March 3, 2011: Akira Moretto

For those not familiar with images of a tropical forest being depleted, it is difficult to imagine the level of desperation faced by indigenous populations who have retained their customary rights to live and depend on the forest’s environment according to their traditional ways. Many of these people of the forest live by traditional hunting and gathering, relying on their environmental knowledge to secure food resources.

Yet among these ancient tropical forests, many do not resemble what they looked like even 20 years ago. Many forest areas around the world now show common features of depletion, such as rivers turning brown as a result of slash-and-burn practices. The changes are altering the land that nature has shaped over millions of years and life cycles.

One of the most extensive tropical forests in the world is the Indo-Malayan one, stretching across India, Sri Lanka, mainland Asia and Southeast Asia. It is reputed to be one of the oldest and richest in biodiversity. But despite rainforests often being labelled the “lungs of the world,” rainforests are increasingly becoming victims of land clearance, with their trees being replaced by palm trees.

In Indonesia and Malaysia alone, between 1990 and 2000 the amount of land devoted to palm oil production doubled in Malaysia and tripled in Indonesia, reaching almost seven million hectares together. Indonesia alone is planning to increase this amount to 11.2 million hectares by 2020.

Reasons for the increase in the production of palm trees are two-fold. First of all, as part of efforts to reduce heart diseases caused by diets high in trans-fats in vegetable oils, the worldwide demand for palm oil among food manufacturers is increasing. Yet palm oil creates health issues of its own, being high in saturated fats, and the World Health Organization has discouraged its consumption in favor of more heart-healthy alternatives such as olive oil.

The second reason for the increased production of palm trees is the fact that they contain the main component for ecological biofuels. Palm trees produce palm oil and palm kernel oil, edible plant oils derived from the fruits of palm trees. This oil is used to produce biofuel, and several energy companies are planting hundreds of thousands of these trees across Borneo, clear-cutting and destroying forests where for centuries tribal populations have lived.

This has been exacerbated because of the rise in demand for biofuels. One single hectare of palm oil is able to produce the equivalent of more than 6,000 liters of crude oil. With the growing demand for alternative fossil fuels, palm oil producers are looking at this business as a lucrative source of future profits. Governments and consumers are also paying attention, given that some palm oil producers are not being fully held accountable for environmental destruction or human rights abuses.

Palm oil has been labelled as the alternative to petrol and gas, with the intention of reducing CO2 emissions, which are enhancing the greenhouse effect. But after having replaced other species of plants which provide more generous returns to the environment, palm oil plants are taking much more out of the environment, releasing much less oxygen compared to the virgin forests they are now slowly replacing.

Furthermore, cultivation with pesticides and fertilizers is putting pressure on all the surrounding areas where palm oil is cultivated. Some of the most ordinary supermarket products contain palm oil, including products like shampoo or facial soaps. But what many do not realize is how palm oil plantations in Southeast Asia are causing the destruction of rainforests, destroying the livelihoods of indigenous people and changing the climate, locally and globally.

This is the other face of a world economy increasingly interested in satisfying business and consumer appetites for the new millennium. Businesses managed by multinational companies holding prestigious names, contributing to refilling supermarkets and fueling gas stations throughout the world, are increasingly causing environmental degradation as well.

But environmental grass-roots organizations, with Greenpeace perhaps as the top runner, are trying to raise awareness of the fact that areas like Borneo, Sumatra and Papua New Guinea are increasingly becoming monocultural. The new plants all look the same, still green, but a lot more lucrative.

However, a complicating factor for campaigners is that it is extremely difficult to reach some of the most remote destinations where palm oil is being planted. And the new “land owners” usually do not allow easy access to remote areas where tigers, elephants and orangutan were once living among trees 100 meters high. By foot, several days might be required to reach those areas.

It is also with the help of multinationals working on palm oil that logging companies are able to create lucrative businesses, logging the forests to make space for palm oil cultivation.

Many of the emerging economies in Asia are in fact stocking up with wood from the forests of Southeast Asia while Malaysia has slowly become the second-biggest worldwide exporter of palm oil after Indonesia. Indonesia produces 22 million metric tons of palm oil compared to Malaysia’s 17 million. Ominously, there seems to be evidence that more than half of the new palm oil plantations are coming about at the expense of tropical forests. Between 1990 and 2005 palm oil plantations in Malaysia have doubled and now cover 3.6 million hectares, of which almost half used to be tropical forest.

While acknowledging the existence of native forest people, states and industrial companies often view tropical forests purely as empty lands available for exploitation and for the expansion of economic development through plantations, logging, oil wells, pipelines and agro-businesses. As a consequence, the modern conception of economic development endangers both the preservation and protection of forests, as well as those who inhabit them. In this context of industrialization forest people are increasingly faced with the gradual elimination of their customary ways of living, their means of survival as well as a loss of identity and cultural collapse by being forced out of their forest homes.

After growing global environmental campaigns by grass-roots nongovernmental organizations and a number of scientific studies, there seems to be a growing awareness of the public relations damage for countries and multinationals exploiting forests. Some food multinationals even stopped buying palm oil not cultivated under sustainable principles. However, it remains to be seen whether this is enough. While these efforts are being made, logged wood and palm oil continue to be distributed on the market, with clients patiently waiting for their goods to be delivered.

This begs the question of why countries have not been doing more to curb the destruction of rainforests.

One of the enduring causes, which countries like Indonesia face, is the lack of economic diversification as a strong foundation for growth. Economic diversification would enable these countries to move into other, more environmentally friendly industries without harming growth prospects.

Still, economic diversification continues to be a significant problem for many developing countries, since their economies are generally characterized by a heavy reliance on the production of primary commodities. In the case of palm oil, economic growth seems to come at the expense of long-term goals of sustainable development, increasing countries’ vulnerability to environmental degradation.

Akira Moretto is an associate consultant at Strategic Asia, a Jakarta-based consultancy promoting cooperation among Asian nations. He can be contacted


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