http://asiasentinel.com/index.php?option=com_content&task=view&id=1562&Itemid=226
Palm Oil's Environmental Cost
Written by Ben Bland
Monday, 24 November 2008
Palm plantation, IndonesiaDespite endorsement by a tame certifier,
Southeast Asia's miracle oil faces trouble
Just outside Danau Sentarum National Park, a large and diverse wetland
area in West Kalimantan on the Indonesian side of Borneo, lumberjacks working
for an Indonesia plantation company are busy felling trees and clearing the
tropical forest. On the other side of the world, in London, a child is
unwrapping and preparing to eat a chocolate bar. The connection between these
two seemingly unrelated occurrences is simple: palm oil.
Demand for the versatile vegetable oil, which is used in everything from
chocolate to soap and is even now deployed as a biofuel, is increasing steeply
even despite falling commodity prices. However, as the plantations have
encroached ever deeper into the jungles of Malaysia and Indonesia - which
between them produce more than 85 percent of the world's palm oil - concerns
about the environmental and social consequences have grown.
The industry's main response was to set up the Roundtable on Sustainable
Palm Oil (RSPO) in 2004. But while this grouping managed to bring together palm
oil producers, purchasers and some NGOs, environmental lobbyists such as
Greenpeace and Friends of the Earth are now turning on the organization,
accusing it of operating as a smokescreen for expanding plantation companies
with little interest in preserving precious rainforests and peat lands.
The main charge from groups such as Greenpeace, which recently sent its
ship Esperanza on a seven-week tour to Indonesia to document deforestation,
disrupt shipments of palm oil and raise public awareness, is that the
destruction of forests and peat lands is contributing to climate change.
About a fifth of global greenhouse gas emissions are caused by
deforestation. Forests and peat land, in particular, store large amounts of
carbon and their destruction causes this to be released into the atmosphere.
Indonesia is already the third-biggest emitter of greenhouse gases in the
world, according to a report released last year by the World Bank and the
British government, with around 85 percentof its emissions coming from forest
clearing and forest fires.
However, despite calls for a moratorium on deforestation by Greenpeace -
which claims that Indonesia's forests are being cleared at a rate of almost 2
million hectares a year - the Indonesian government signaled at the RSPO annual
meeting in Bali last week that it had no intention of halting the long-term
expansion of palm oil plantations. Agriculture minister Anton Apriyantono said
that economic needs should trump any drive for sustainability given the
worsening state of the world economy.
At the heart of the debate between the environmentalists and the palm oil
companies lies the inescapable challenge that faces every developing country in
Asia and around the world: how is it possible to pursue economic growth without
damaging the environment and contributing to climate change.
The question becomes even more pressing in tough financial times like these,
when governments need to do everything possible to stoke their flagging
economies - especially governments that are facing sustained political pressure
such as in Indonesia (where presidential elections are to be held next year)
and Malaysia (where the incumbent Barisan Nasional coalition is being squeezed
by a renewed opposition).
The latest gross domestic product figures revealed that Indonesia's
once-booming economy is starting to feel the pain of the global slowdown.
Growth in the third quarter eased to the slowest rate in a year-and-a-half,
down to 6.1 percent per annum from 6.4 percent in the preceding quarter.
Palm oil, which brought in $7.9 billion of foreign currency last year,
accounting for around 7 percent of Indonesia's total exports, is a vital part
of the country's economy. However, palm oil prices have slumped by around
two-thirds since peaking in March, as the global economic outlook has
deteriorated.
This collapse in prices, and the fear that global demand for products that
contain palm oil could weaken further as the worldwide slump deepens, has
driven Indonesia and Malaysia to cut production in the short-term. By
replanting palm oil-producing trees that are more than 25 years old, they hope
to reduce short-term supply while ensuring that production will be ramped back
up in three-four years' time, when these new trees bear harvestable fruit.
So, as long as the growth of the palm oil industry remains so important to
Indonesia's growth, it seems extremely unlikely that the government will seek
to rein it for environmental reasons. Since its inception, the RSPO has claimed
to offer a way out of the growth versus environment dilemma by emphasizing the
possibility of developing sustainable palm oil, which does not destroy precious
ecosystems or stir up social conflict.
However, after documenting evidence of the renewed destruction of tropical
forests and peat lands by operations such as Indonesian conglomerate Sinar Mas
by RSPO members on its recent trip, Greenpeace has argued that the RSPO is
failing in its mission.
"'Sustainable palm oil' continues to be a farce while RSPO stands exposed as a
weak and ineffectual industry body." said Bustar Maitar, Greenpeace's Southeast
Asia forest campaigner. "The rapid loss of forests in Indonesia and the current
climate crisis needs strong leadership from the global business community.
However the RSPO has failed dismally to take up the challenge."
While the first shipment of officially-vetted sustainable palm oil made its way
from Malaysia to the UK earlier this month, most RSPO members - including those
criticized by Greenpeace - are still to have their plantations certified. Until
that happens, the RSPO will not be required to pass judgment on the methods
employed by companies such as Sinar Mas and Duta Palma, which have come under
question from environmental groups.
Despite their strongly-worded criticism of the industry, environmental
campaigners claim that it is possible to produce sustainable palm oil and meet
consumer demand by focusing on improving existing crop yields, rather than
clearing forest for new plantations.
However, while demand for products containing palm oil continues to rise, it
appears highly unlikely that developing economies such as Indonesia and
Malaysia will feel they have the luxury of holding back on expansion. Some in
Europe and America may be willing to pay over the odds to buy products made
from sustainable palm oil but it is doubtful that less well-off consumers in
India and China - which are the world's biggest importers of palm oil - will be
so happy to do so.
And, so long as consumers do not insist that their palm oil comes from
sustainable sources, Indonesia and Malaysia will continue deforestation to meet
demand and drive their economies forward. The fear voiced by environmentalists
is that by the time consumers eventually become concerned about the damage to
the climate wrought by this expansion, it may well be too late to do anything
about it.
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