Indonesia and its palm problem

Progress in the fight against global warming may hinge on the future of one tiny fruit in Southeast Asia.

Produced from the dark red fruit of the African oil palm, palm oil is the leading engine behind deforestation and peatland destruction in Indonesia and Malaysia.

Chopped down trees release carbon into the atmosphere as they decompose, while setting fire to peat soils to clear the forests generates yet more climate warming gases. Add that together and deforestation in Indonesia causes far more climate pollution than all of the country's cars and power plants combined.

The global demand for palm oil is behind the widespread environmental damage in Indonesia, where the expansion of plantation land has been linked to the destruction of ecologically rich rainforests and annual forest fires that this year alone burned through an estimated two million hectares of forested area in the span of five months — turning a forest roughly the size of the US state of New Jersey into ash and cinder.

At their height, the forest fires produced more greenhouse gas than the average daily emissions of the entire US economy, according to an analysis by the World Resources Institute.

This year’s forest fires were among the world’s worst. Experts now wonder whether the industry and the government are ready to adopt the serious reforms needed for the environmentally sustainable production of palm oil.

Demand drives expansion

“Within the Indonesian landscape, two of the main drivers of deforestation are the expansion of pulp and palm plantations,” said Gemma Tillack, agribusiness campaign director at the Rainforest Action Network, a US-based NGO that tracks the impact of so-called “conflict palm oil” on the environment and workers’ rights.

“So it is clear for us that any global climate deal needs to tackle the expansion of both palm and pulp and paper, and to change the way that it is expanding so that it no longer is leading to the destruction of rainforest and peatland.”

Palm oil is a little-known ingredient found in nearly half of all supermarket goods, from brand-name foods like Doritos and Coca-Cola to products like lipstick and cake mix. 

Indonesia is the world’s largest supplier, producing more than 30 million tonnes a year as demand for this cheap edible oil continues to drive the expansion of plantations in regions like Sumatra and Kalimantan. 

Indonesian farmers have historically relied on slash-and-burn techniques to clear their land, torching grass and underbrush in the months leading up to the rainy season, the start of the county’s main growing period. This year’s forest fires spread with alarming speed, blanketing cities like Palangkaraya under a thick layer of acrid smoke as the haze spread to affect countries as far-flung as the Philippines and Thailand. 

“I had to use a mask, even in our hotel room,” said Teguh Surya, a campaigner with Greenpeace who flew to Palangkaraya at the height of the haze crisis. “If we wanted to sleep, we had to seal all the windows and the door to avoid letting the haze come in the room. I saw a huge area that was burned and some of the area was already prepared to plant palm oil.”

Big players respond

The industry has taken steps towards adopting sustainability measures in recent years that ban outright the use of slash-and-burn clearing techniques. 

Wilmar International, the world’s largest palm oil trading company, adopted a sweeping “no deforestation, no peatland destruction” pledge in late 2013, promising sustainability measures that went well beyond the protections required by Indonesian law.

Similar measures have also been adopted by members of the industry-led Roundtable on Sustainable Palm Oil (RSPO) and the signatories of the Indonesian Palm Oil Pledge (IPOP), which now include the five largest palm oil companies operating in the region. 

“[In order to] comply with each company’s sustainable policies, every IPOP member is committed to no-burn practices throughout their business chain,” said a spokesman for the IPOP management team. “By signing the pledge, there is a strong collective commitment to ensure each member can work together and share best practices to solve common problems on the ground as well as to push their third-party suppliers to follow in their footsteps.”

But the RSPO says these companies are still in the process of discovering what issues exist within the operations of the small-scale farmers in their supply chains. The palm oil industry relies on a highly fragmented ecosystem of smallholders who together are responsible for as much as 40 percent of the global palm oil supply. 

Smallholders can't afford to change

The palm oil sector is rife with issues at the smallholder level, where thousands of growers run farms less than 25 hectares in size on razor-thin margins. Smallholders are allegedly responsible for much of the destructive practices still associated with the industry, including the use of slash-and-burn land clearing and the ongoing encroachment of new plantation land into carbon-rich primary forests.

The Indonesian government’s own issues compound the problem. The country lacks a single map that clearly defines which communities or individuals own which plots of land. Meanwhile, a lack of communication between individual ministries within the central government and corruption among local officials have resulted in numerous instances of overlapping land concessions that make it difficult to determine who is ultimately responsible for setting fire to scrubland. 

“I think the problem that still exists is that the scale of action that is being taken by the traders is falling short of what’s needed,” Tillack told IRIN. “Forests are still falling, peatlands are still burning, and we see that the forest fires are still causing haze like they did this year. The problem is getting worse. The real question is are they going to be able to actually reach the operators and can they contend with the system of corruption and failed governance in Indonesia?”

 

The ministry of agriculture is now working with the United Nations Development Programme (UNDP) on a national initiative called the Indonesia Palm Oil Platform (InPop), which aims to tackle these issues by enforcing sustainable practices under Indonesian law, and including smallholders in its ambit. UNDP also supports the government's own mandatory certification program - Indonesia Sustainable Palm Oil, or ISPO. 

UNDP's Asia manager for its Green Commodities Programme, Tomoyuki Uno, said that the industry's RSPO certification scheme – supposed to show which producers are using sustainable practices – has failed to address the underlying problems. Smallholders get little return and can't afford to be picky about how they operate, while some 80 percent of the product is sold on the local market to consumers who remain uninterested in sustainable palm oil certifications.

“At the moment, it is almost like there is a state of paralysis where no one is willing to take on the task of dealing with deforestation outside their own plantations,” Uno said. “Big global supply chains don’t want to tackle the problem. It’s massive. It is like 80 percent of the market. The instinct is ‘no, let’s lock down our supply chain’.”

UNDP is currently working with the Indonesian government to figure out how to engage smallholders and offer incentives to push them toward adopting sustainable practices. The ministry of agriculture initially planned on having all of the country’s palm oil growers certified by 2013, but progress has been slow. To date, only 10 percent of Indonesia’s palm oil farmers are certified under ISPO. “It’s still early days,” said Uno, explaining that the ministry now needs to draw on wider support in the central government to achieve its goal. 

“I am being optimistic definitely,” he said. “I am not saying it is going to be a silver bullet. It is putting down a framework. If you look at where the fires are starting and listen to what the companies are saying then it points to this unregulated informal sector. It’s not that they are evil. I don’t think so. They are very poor. They need to put their children through school. It’s for economic [reasons].”

Mixed signals

As the Indonesian economy struggles, some government figures have recently begun to lash out at sustainability commitments like the IPOP pledge for overstepping national regulations and putting smallholders out of business by cutting them out of supply chains.

And plantation companies also complain that government ministries have tried to take back land set aside for conservation by classifying it as “abandoned” in order to reallocate it as new palm oil concessions. The ministry of the environment and forestry is trying to convince other wings of the central government to recognise the conservation commitments of these companies.

Indonesian President Joko Widodo is expected to sign a landmark regulation ordering the rehabilitation and conservation of more than two million hectares of degraded peatland at the Paris climate summit.

The president, popularly known as Jokowi, has already said the country will ban all future peatland development in light of this year’s haze crisis. His administration has also committed to reducing carbon emissions by 29 percent by the year 2030, setting aside an additional 12.7 hectares of forest for conservation and promising to boost renewable energy sources in order to reach that goal.

“I think there is an opportunity for Jokowi and the country to get some real support from the global community about deforestation issues,” Uno said. 
“Indonesia is tired of being blamed and their argument is: of course developed countries have already cut down their forests and you need to support us to get out of this."

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