New World Growth report contains 'false and misleading' information

Rhett A. Butler, mongabay.com
March 31, 2011

Palm oil mill in Sumatra
Palm oil mill in Sumatra.

A new report from World Growth International, a lobby group for industrial forestry interests, contains "false and misleading" information on the economic impact of reducing Indonesia's deforestation rate, says an Indonesian environmental group.

The report, released today, claims that reducing deforestation in Indonesia will cost the country 3.5 million jobs annually by slowing growth of the forestry sector.

"This would cost the Indonesian economy up to 3.5 million jobs annually, cut growth to industries that make up 15 per cent of the economy, and cut revenues to the Indonesian government, hampering its ability to sustainably manage Indonesia’s forest areas and continue poverty alleviation efforts," said Alan Oxley, a lobbyist who heads World Growth International.

Healthy forest and an oil palm plantation. The difference is bigger than it looks: oil palm plantations store less carbon, house less biodiversity, and are more prone to erosion than natural forests.
But Oxley's claims were quickly countered by Elfian Effendi, Director of Greenomics-Indonesia.

"The World Growth report is misleading," Effendi told mongabay.cm via email. "Greenomics sees the employment calculation as false and totally baseless."

Effendi said that Indonesian government data shows that over the last ten years, each point of economic growth created 305,000 jobs. The rate has accelerated to 400,000 jobs per percentage point during the past three years. Thus the 6.1 percent growth in 2010 should have generated some 2.4 million jobs across all economic sectors, including forest-related industries.

"Greenomics is confident World Growth's claim that stopping expansion of forest-related industries would cost the Indonesian economy 3.5 million jobs annually is a misleading figure," he said, noting that forest-related industries account for only 5 percent of Indonesia's economy, according to state data.

"The Indonesian forestry sector (0.75%), paper and other printing products industry (1.02%), wood-based products and other forest products (1.25%), and plantations (2.11%) amount to 5.13% of 2010 GDP," Effendi explained. "If we include mining sector, excluding oil and gas, the total contribution of forest-related industries stood at 11.79%."

"Based on the above figures, it means that forest-related industries (including mining) created 288,000 jobs."

Oil palm and logged over rainforest in Sabah, Malaysia. Photo by Rhett A. Butler 2008.

World Growth International's report also downplays expansion that could occur on non-forest land. The Indonesian government has said tens of millions of hectares of degraded lands could be brought into production should the country move to slow conversion of natural forests under its proposed billion dollar forest conservation agreement with Norway. World Growth International assumes that efforts to limit deforestation and forest degradation would stop all growth of the forestry sector. But last week Indonesia's Deputy Minister of Agriculture said that yield improvements and other productivity gains could boost palm oil production in Indonesia by 2 million tonnes a year without the need to clear more land.

World Growth International's report comes just days after Indonesia's largest palm oil producer Golden Agri Resources (GAR) said its new forest policy, which prohibits conversion of high conservation value and high carbon stock forests and peatlands, will not impact its economic growth.

Expansion of the oil palm estate and natural forest loss in Indonesia and Malaysia, 1990-2008. Click image to enlarge
In a March 10 newsletter, World Growth International asserted GAR's agreement "could severely hamper the company's growth" by limiting where it can establish new plantations and implied that GAR may renege on its sustainability commitment. But GAR's subsequent response directly contradicted World Growth's claims.

"The additional cost of this policy will not be material," Peter Heng, Managing Director, Communications and Sustainability at GAR told mongabay.com in response to World Growth International's mailing. "Based on initial field work, we think that the land to be earmarked as high carbon stock is not significant as GAR's concessions are on degraded land."

The rebuke from GAR was notable because Oxley was hired last year by the Sinar Mas group, which controls GAR, to cast doubt on environmental complaints lodged by Greenpeace, which had been campaigning against GAR's subsidiary PT Sinar Mas Agro Resources & Technology (PT SMART). Heng told mongabay.com that GAR is not engaging Oxley.

Palm oil is used widely in processed foods, cosmetics, and soaps. It is also increasingly used as a biofuel. But palm oil's emergence as a economic juggernaut in Indonesia and Malaysia has come at a cost. By some estimates, more than half of oil palm expansion since 1990 occurred at the expense of forests, spurring criticism from environmentalists concerned about greenhouse gas emissions and loss of habitat for endangered wildlife—including orangutans, pygmy elephants, Sumatran rhinos and tigers. Oil palm plantation development has also at times exacerbated conflicts over land.
The response from GAR and criticism by Greenomics are not the first time Oxley and World Growth International have been castigated for questionable claims. The group, which portrays itself as a humanitarian organization, yet consistently pushes policies that favor industrial forestry interests over communities, has falsely claimed that oil palm plantations sequester more carbon than rainforests and that the leading cause of deforestation in Asia is subsistence agriculture, rather than enterprise-driven activities. In two of its reports, World Growth International misattributed views to Frances Seymour, the Director General of CIFOR, a forest policy research institution. World Growth International said Seymour, when speaking at a U.N. Food and Agriculture Organization event in 2009, blamed subsistence farmers for most deforestation, but a review of the transcript from her talk does not support this interpretation. Speaking with mongabay.com, Seymour flatly denied the notion that the poor are primarily to blame for deforestation today. World Growth International did not respond to requests for comment from mongabay.com.

World Growth International reports have also dismissed other important environmental concerns, including emissions from conversion of peatlands for plantations and loss of habitat for threatened species including orangutans and Sumatran tigers. Its missives have claimed oil palm is generally not suited for peatlands and that rights' groups typically do not apply the concept of free, prior informed consent to local communities.

Palm oil is now found in up to half of packaged processed foods, including Girl Scout cookies. By virtue of its high yield, palm oil is a cheaper substitute than other vegetable oils. In an effort to reduce costs, some candy makers are using palm oil in place of cocoa butter in their milk chocolate products. Photo by Rhett A. Butler
Its positions—and conduct—have produced many critics. In December 2010, Agus Purnomo, Indonesian President Susilo Bambang Yudhoyono's special assistant on climate change, said Oxley was misrepresenting the objectives of Indonesia's proposed moratorium on new concessions in primary forest areas and peatlands. Last November, the group run by Wangari Maathai, the 2004 Nobel Peace Prize winner for her tree-planting campaign in Africa, blasted World Growth International's Oxley for using her name to imply that she supports the large-scale conversion of tropical forests for industrial plantations. And in October, a group of prominent scientists castigated Oxley. In an open letter the scientists identify World Growth International and ITS Global as front groups for the palm oil, timber, and wood-pulp industries.

"A number of the key arguments of World Growth International, ITS Global, and Alan Oxley, represent significant distortions, misrepresentations, or misinterpretations of fact," wrote the scientists, led by William F. Laurance, a researcher at James Cook University.

"In other cases, the arguments they have presented amount to a 'muddying of the waters' which we argue is designed to defend the credibility of the corporations we believe are directly or indirectly supporting them financially. As such, World Growth International and ITS Global should be treated as lobbying or advocacy groups, not as independent think-tanks, and their arguments weighted accordingly."

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Rhett A. Butler, mongabay.com (March 31, 2011).

New World Growth report contains 'false and misleading' information.