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Dodgy science and corporate concessions in Indonesia’s bid for clean palm oil

A palm plantation in North Sumatra. Image by Ayat S. Karokaro/Mongabay-Indonesia.

  • Environmental activists and experts have questioned a new initiative by the Indonesian government to clean up the reputation of the country’s palm oil, which they warn could lead to an even less sustainable industry than at present.
  • The plan risks permitting the legitimization of illegal plantations inside forests, effectively rewarding environmental violators.
  • It also seeks to count palm oil-based biodiesel as a green offset to fossil fuels, despite overwhelming evidence showing that the production of the fuel will lead to greater deforestation and a net increase in carbon emissions.
  • The plan also gives mining and other extractives companies an easy way out of their obligation to rehabilitate their degraded concessions, by permitting these areas to be planted with oil palms instead of being reforested.

JAKARTA — Indonesia has launched a campaign that government officials say should boost the reputation of the country’s palm oil industry, even as activists and experts warn it could make the industry even less sustainable.

President Joko Widodo signed off on the initiative last month, roping in more than a dozen ministers and top officials to coordinate the campaign. The plan is to improve data management within the palm oil industry, boost the capacity of farmers, resolve conflicts over farmland, and push for international recognition of the country’s homegrown sustainability certification standard.

The initiative is the latest move by the government to shore up the palm oil industry in the world’s biggest producer of the commodity, which faces a growing global backlash from consumers and, increasingly, companies and other governments.

In particular, the government has condemned what it calls a “negative campaign” to keep palm oil-based biodiesel out of the European renewable fuel market. The European Union is currently the No. 2 export market for Indonesian palm oil, but the bloc plans to phase out palm biofuel as a renewable energy source by 2030, on concerns that its production contributes to deforestation.

Musdhalifah Machmud, the deputy for agriculture to Indonesia’s chief economics minister, acknowledged that the campaign was aimed at tackling negative perceptions of palm oil. She added that the effort was part of a wider move toward greater sustainability of the industry.

A worker takes a chainsaw to an oil palm on an illegal plantation in Tenggulun. Image by Junaidi Hanafiah for Mongabay.

Legitimizing illegal plantations

Environmental activists have welcomed the notion of imposing stricter standards on palm oil producers, but say this new initiative threatens to do the opposite.

One of the prominent points in the order signed by the president is a provision that could effectively legitimize illegal plantations on deforested land, said Zenzi Suhadi from the Indonesian Forum for the Environment (Walhi).

The provision specifically calls on the environment ministry to “finalize the land status of palm oil plantations indicated to be within forest areas and in peat ecosystems.” It’s illegal for oil palms to be cultivated in these areas, and the term “finalize” is sufficiently ambiguous that it could be read to mean granting legal status to such illegal plantations, Zenzi said.

“The word is dangerous because it can be interpreted as an instruction for the ministry to pardon crimes,” Zenzi said. “Because it’s clear in our forestry and conservation laws that palm oil plantations inside forest areas is a crime.”

Lack of monitoring and enforcement has resulted in the widespread proliferation of illegal plantations. In Sumatra’s Riau province alone, investigators have identified 10,000 square kilometers (about 3,900 square miles) of illegal oil palm plantations.

The environment minister, Siti Nurbaya Bakar, declined to comment on how that provision should be interpreted.

Zenzi said that as an instruction from the president, it should have been worded more clearly as an instruction for the minister to crack down on illegal plantations in forest areas.

Instead, the next provision in the order calls on the land minister to legalize forest-based plantations that have been “finished” or processed by the environment ministry. Zenzi said this instruction clearly indicated that these illegal plantations would eventually be legitimized.

“It means the land minister is obligated to issue plantation permits to illegal plantations that have been pardoned by the forestry minister,” he said.

A more detailed instruction in the presidential order actually identifies the legalization of illegal plantations as part of the president’s land reform program, which aims to give local communities greater control over land through the issuance of formal titles.

Land planted with oil palms by PT Megakarya Jaya Raya, near where the Digul River snakes through the landscape. Image by Nanang Sujana for The Gecko Project and Mongabay.

Oil palms as carbon sinks

Another highlight of the new initiative is how it plans to incorporate oil palm plantations, many of them established by clearing primary forests and releasing large volumes of carbon dioxide, into Indonesia’s emissions reduction target.

One of those ways is through the government’s ongoing program to boost domestic consumption of palm oil-based biodiesel — the same fuel the European Union considers not a renewable energy source. This program, Musdhalifah said, will help offset emissions from the burning of fossil fuels.

Deputy parliamentary speaker Muhaimin Iskandar, part of the official Indonesian delegation to last week’s U.N. climate summit in Madrid, also used that opportunity to promote the biodiesel program, claiming the fuel as an environmentally friendly source of energy. He said accusations that Indonesia’s palm oil industry was a net contributor to climate change, through deforestation, were false.

“In fact, palm oil is capable of absorbing carbon dioxide very well,” he said. “And the energy that’s produced [from palm oil] is green energy that becomes a replacement for depleting fossil fuel.”

It’s an argument the Indonesian government and palm oil lobby have made for years: that oil palm plantations sequester and store many times the amount of carbon dioxide as natural forests, and that therefore razing those forests and planting oil palms is a positive way to fight climate change.

That’s a misguided notion because it fails to account for the CO2 released throughout the entire process of producing and transporting biofuel, said Teguh Surya, the executive director of environmental NGO Madani.

“If we take into account the supply chain, then it’s clear that palm oil plantations create emissions through deforestation and the use of pesticide,” he said. “And its use in biodiesel is even more controversial because we can say it’s environmentally friendly if we count the emissions only when the biodiesel is burned as fuel.”

Khalisah Khalid, the head of policy at Walhi, said the U.N.’s Intergovernmental Panel on Climate Change (IPCC) has already warned against the danger of betting on biofuels as a solution to climate change. According to the IPCC special report on climate change and land, published earlier this year, creating vast plantations for crops simply to make fuel could jeopardize food production, water supplies, and land rights for poor farmers, given how limited land is.

“The Indonesian government should have referred to the IPCC report,” Khalisah said. “Because the report already recommended against the use of biodiesel because it will increase competition for land.”

Indonesia’s biodiesel program already runs the risk of driving greater emissions by incentivizing oil palm growers to clear even more land for new plantations. A study by the World Resources Institute (WRI) projects that the program could lead to an increase in palm oil demand to 57 million tons annually by 2025, which in turn would encourage the clearing of an additional 7.2 million ha (17.8 million acres) of land if plantation productivity stays the same — an area the size of Ireland.

A palm oil plantation in Sabah, Malaysia. Plantations frequently fail to sequester as much carbon as native forests and they devastate biodiversity. Despite those facts, plantations have long been included under the UN’s definition of the word “forest.” Image by Rhett A. Butler / Mongabay.

Plantations over reforestation

Another contentious point in the new initiative is the possibility that land currently designated as critical could be converted to oil palm plantations. This constitutes areas that have previously been heavily damaged through mining, farming, logging, or other human activities.

For the mining sector specifically, companies are required by law to rehabilitate any critical land within their concessions to their former condition. In most cases this is forest. But the new provision means miners can forgo this costly process and simply turn over the land to oil palm plantations, according to Zenzi from Walhi.

“I’m worried that this action plan is opening a new opportunity for companies to transform from mining firms into plantation firms,” he said. “I’ve found a lot of cases like that in Bengkulu and South Kalimantan provinces. So companies’ mistakes can be pardoned by giving them new chances. These mining companies that fail to rehabilitate their concessions should instead be punished.”

Zenzi also cautioned that permitting this would put the government in contravention of prevailing laws.

“The president himself will be in violation [of the law] if the action plan is used as a basis for mining companies to convert their former concessions into plantations, because the environmental law says rehabilitation means returning the landscape of a land into its original state,” he said.

Critical lands span 14 million ha (34.6 million acres) — an area the size of England — making Indonesia one of the world’s largest reforestation hotspots by size. And reforestation is already one of the government’s key tools for achieving its self-imposed carbon emissions reduction target of 29 percent by 2030 (or 41 percent with assistance from other countries).

However, activists say there’s a concern that the reforestation efforts rely largely on establishing monoculture tree plantations, including oil palms. Monocultures have been shown to provide limited ecosystem benefits, and don’t last long enough to make a significant impact. That’s why the government must focus the reforestation program on rehabilitating critical lands into actual forests, Khalisah said. “That’s a far better solution to reducing emissions.”

Madani’s Teguh said the government should give priority to local communities to manage critical lands, under its existing land reform program, because they have been proven to be sound land managers with a positive impact on reducing carbon emissions.

He cited a study by Madani and the Climate and Society Foundation analyzing changes in the deforestation and emission rates in three areas where local communities managed critical lands in West Sumatra’s Bukit Barisan forests.

The study found an 84% decline in the deforestation rate, translating into an emissions reduction of 484,000 tons of CO2 per year.

“After getting their social forestry permits, the people shifted to non-timber commodities and ecotourism,” Teguh said.

Khalisah agreed that this was a solution the government had long overlooked in its administration of the land reform program.

“The government only looks at the social forestry program in the context of poverty alleviation,” she said. “They should look at it as one of the solutions to climate change.”


Banner image: A palm plantation in North Sumatra. Image by Ayat S. Karokaro/Mongabay-Indonesia.


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