NGOs should use palm oil to drive conservation
Rhett A. Butler,
August 29, 2007

Environmentalists view the expansion of oil palm plantations in southeast Asia as one of the greatest threats to the region's forests and biodiversity. Campaigners say oil palm is driving the conversion of tens of thousands of hectares of peatlands and lowland forest in Indonesia and Malaysia, putting wildlife at risk, increasing the vulnerability of the forests to fires, and triggering large emissions of greenhouse gases. Pressure from these groups have in recent months convinced European policymakers to reconsider sourcing energy crop production to the region.

Palm oil producers are fighting back, accusing the West of hypocrisy for criticizing their production while overlooking environmental harm caused by biofuel production in other parts of the world, including Amazonia (soy biodiesel and sugar cane ethanol), Europe (rapeseed), and the United States (corn ethanol).

Now a new paper calls for a truce, proposing that conservationists work with palm oil producers to protect particularly important areas of biodiversity.

Chart showing annual palm oil production by Malaysia and Indonesia from 1964-2006. Click to enlarge.

Writing in Nature, Lian Pin Koh and David S. Wilcove from Princeton University, argue that the high yield and high prices that make oil palm so attractive "could be turned to a biodiversity advantage." They suggest that green groups could buy small tracts of existing oil palm plantations and use the revenue they generate to acquire land to establish a network of privately-owned nature reserves for biodiversity conservation.

"A typical mature oil-palm plantation in Sabah, Malaysia, generates an annual net profit of roughly $2,000 per hectare," write the authors. "Based on the current price of $12,500 per hectare for oil palm-cultivated land, the capital investment could be recovered in just 6 years. After this initial period, a 5,000-hectare oil palm plantation could generate annual profits amounting to some $10 million, which could be used to acquire 1,800 hectares of forested land annually to be set aside as private nature reserves."

Koh and Wilcove say the scheme would require collaboration between "large conservation donor groups to fund the initial investments and with local oil-palm companies for their expertise in running the plantations," but that the relationship could be a "win-win partnership... because NGOs would be able to protect forests using the oil palm revenue and the companies would be able to enhance their corporate image to satisfy environmentally-conscious consumers."

Forest cover versus palm oil production in Indonesia.
"We think NGOs can participate in such joint ventures without losing their integrity if they go into it with the appropriate level of caution. Afterall, there have been many examples of successful collaborations between environmental groups and industry leaders in the USA and elsewhere," Koh told via email. "Having said that, we certainly do not want all of the NGOs to embrace our idea, because we feel that some should remain well outside the partnership, serving as much-needed critical voices to pressure governments and oil palm companies to avoid further losses of pristine habitats."

Koh and Wilcove believe that the development of a premium market could help entice producers into working with conservationists.

"Because such oil-palm plantations would be motivated mainly by conservation objectives, they could provide the industry with leadership for the sustainable production of palm oil through environmentally-friendly management practices," they write. "This could also drive the development of a premium market for sustainable oil-palm products and thereby generate economic incentives for more palm-oil producers to adopt sustainable practices."

Koh and Wilcove appear to be optimistic that this price premium, as well as the "green" marketing benefits, can overcome the inherent conflict of interest between the two groups. After all, why would producers want to help set up direct competitors and fund opposition to oil palm expansion unless they were sure to get something tangible in return?

CITATION: Lian Pin Koh and David S. Wilcove (2007). Cashing in palm oil for conservation. Nature Vol 448|30 August 2007

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Rhett A. Butler, (August 29, 2007).

NGOs should use palm oil to drive conservation.