Palm oil plantations

Truck full of palm fruit, South Sumatra

Direct drivers – Palm oil plantations

The expansion of oil palm plantations is recognized as one of the biggest causes of deforestation in Indonesia, accounting for about a quarter of the country’s total forest loss. Over half of the oil palm plantations in Indonesia have replaced forests, and the provinces of North Sumatra, Riau and Jambi are most badly affected, along with central and south-west Kalimantan. In all, it is estimated that the expansion of oil palm plantations has been responsible for the destruction of around 10 million ha of lowland forest.

Palm oil is the world’s cheapest and most widely consumed vegetable oil, used globally as an ingredient in about half of all packaged products [more info – WWF] sold in supermarkets including foodstuffs, cosmetics and detergents, and increasingly as a component in biodiesel fuels. It is popular with producers because it has a higher yield than other vegetable oils, meaning that less land is needed to grow it, and attractive to the food industry because it is cheap and semisolid at room temperature. Malaysia and Indonesia account for 83 percent of global production, and 89 percent of global exports, worth US$40 billion annually.

Indonesia is the world’s largest producer (23.6 million tonnes in 2011) accounting for around half of global production, and output is expected to double by 2030. Palm oil currently contributes about 4.5 percent of Indonesia’s Gross Domestic Product, with Sumatra accounting for approximately 67 percent of the total planted oil palm area (9.2 million ha), and 74 percent of national production. In 2013 it was determined that Indonesia had become the world’s biggest palm oil consumer, using more than 8.5 million tonnes of crude palm oil and 1.9 million tonnes of palm kernel products. The domestic food industry accounted for 62 percent of consumption, and industry for 38 percent.

The expansion of the palm oil industry has been particularly damaging to forests and peatlands as some companies use permits issued to establish plantations as a means only to clear the land and extract the valuable timber. In West Kalimantan, for example, location permits covering 5.3 million ha of land for oil palm developments have been issued, while less than 1 million ha of land have actually been planted with oil palm. Clearing land for oil palm plantations is also widely associated with burning, which has significant environmental consequences, especially for peatlands.

Between 1967 and 2010, oil palm agriculture in Indonesia expanded spectacularly from approximately 100,000 ha to approximately 8.5 million ha. Between 2000 and 2010, new oil palm plantations accounted for the loss of around 5,000 ha of mangrove, 385,000 ha of peatland, and 290,000 ha of forest in Indonesia. As well as having significant impacts on forest cover, biodiversity, carbon emissions and carbon stocks, these encroachments – along with associated logging, fires and road building – fragment the rainforest, destroy animal habitats, hinder migration patterns, and make animals accessible to illegal hunting.

Plantations also pollute the soil and water with pesticides, attract pests such as rats, and cause soil erosion and increased sedimentation in rivers. Palm oil mills, which need to be established close to plantations as the fruit deteriorates rapidly after harvesting, often discharge untreated effluent into waterways. Halting the expansion of oil palm enterprises over peat swamp forests and lowland forests is crucial to reducing Indonesia’s carbon dioxide emissions, preserving biodiversity, and reducing economic losses in local communities.

As palm oil is so widely used across the world, and Indonesia is such a prominent producer, the country’s private sector producers have been subject to considerable scrutiny by national and international environmental groups. This has had significant success in encouraging some operators to develop mechanisms to trace the source of the palm oil in their supply chains, with the objective of ensuring that it comes from sustainable sources. Certification schemes, such as the Roundtable on Sustainable Palm Oil (RSPO), are also potentially valuable tools to monitor private sector operations, and ensure that their commitments are implemented. The RSPO requires that for palm oil to be certified, it must not have been planted on former forest land and should use previously cleared and/or degraded land. In time, it is hoped that moves such as these, along with concerted action by government and civil society groups towards improved land and forest governance, will reduce the detrimental impacts that palm oil production has had on Indonesia’s forests and peatlands.