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Indonesia is clearing less forest for palm oil, but it’s still not sustainable, activists say

New oil palm planting near a protected area in Indonesia. Image by Rhett A. Butler/Mongabay.

New oil palm planting near a protected area in Indonesia. Image by Rhett A. Butler/Mongabay.

  • Clearing of forests in Indonesia to make way for oil palm plantations has decreased in recent years, a new analysis shows.
  • It found that deforestation was associated with 3.1 million hectares (7.7 million acres) of plantations established since 2000, out of a total of 16.2 million hectares (40 million acres) planted as of 2019.
  • Auriga, the environmental NGO that carried out the analysis, says this gives the bulk of palm oil producers a case to make that their palm oil is deforestation-free and should be labeled as sustainable.
  • However, a Greenpeace campaigner says being deforestation-free is only one aspect of sustainability, and adds many oil palm companies remain far from socially sustainable, given the land conflicts in which they’re mired against local and Indigenous communities.

JAKARTA — Deforestation for new oil palm plantations in Indonesia has decreased over the past decade, strengthening the case that palm oil doesn’t have to be associated with the destruction of forests, according to a new analysis.

The findings from the environmental NGO Auriga came from comparing forest cover in 2000 with 2019 in areas licensed for oil palm cultivation, which totaled 16.2 million hectares (40 million acres) in 2019. It found that the bulk of existing plantations were established on land that wasn’t standing forest back in 2000; that is, there was no deforestation associated with these plantations during this period (although there may have been before 2000).

But there were still 3.1 million hectares (7.7 million acres) of plantations for which forests had been cleared in this time. The highest annual rate of deforestation for oil palm plantations since the start of the millennium was in 2012, when 314,937 hectares (778,226 acres) of forest were cleared, according to Auriga. From then on, the rate declined, falling to less than 150,000 hectares (371,000 acres) in 2015, and less than 100,000 hectares (247,000 acres) from 2016 onward, the analysis shows.

Dedy Sukmara, the data director at Auriga, attributed this trend to falling palm oil prices during this period.

“Some research that has been published indicates that the decline of palm oil deforestation since 2015 is caused by the [decline of] palm oil prices, which [slowed down] the expansion of plantations,” he said during an online webinar to release the findings of the analysis.

A study last year, not peer-reviewed, by researchers from technology company TheTreeMap and other institutions found that rates of both plantation expansion and forest loss correlated with palm oil prices.

According to the study, a price decline of 1% was associated with a 1.08% decrease in new plantations and a 0.68% decrease in forest loss. Like Auriga’s analysis, it shows both new plantation and deforestation rates slowing significantly from 2017-2019 from peaks in 2012.

Forest clearing for oil palm in Riau, Sumatra, Indonesia. Image by Rhett A. Butler/Mongabay.

‘We can’t generalize all plantations’

Indonesia is the world’s biggest producer of palm oil, a ubiquitous ingredient in a wide range of goods ranging from processed foods to cosmetics and biodiesel. But production of the commodity has long been associated with the wholesale clearing of tropical rainforestsburning of peatlands, destruction of endangered wildlife habitatland conflicts with Indigenous and traditional communities, and labor rights abuses.

These concerns have fueled consumer campaigns calling for boycotts of products containing palm oil, and for the European Union to no longer recognize palm-based biodiesel as a renewable fuel and plan to phase out its use as a biofuel by 2030.

According to Auriga’s Dedy, however, there’s a case to be made that a growing number of plantations aren’t associated with deforestation, and thus the palm oil they produce should be labeled accordingly.

This way, he said, they won’t be bundled together with plantations that are linked to deforestation, and could therefore be exempted from trade bans or barriers as well as consumer campaigns.

“The fact is that not all existing plantations come from [clearing of] natural forests,” Dedy said. “Plantations that were already plantations or non-forested lands [before 2000] could be advanced [so that] they’re not held hostage by issues of palm oil that come from deforestation.

“We can’t generalize all plantations, whether they’re all problematic or they’re all good,” he added.

Eddy Martono, the secretary-general of GAPKI, the national association of palm oil companies, declined to comment on the findings, saying he hadn’t read Auriga’s analysis. Musdalifah Machmud, the deputy for agriculture to Indonesia’s chief economics minister, didn’t respond to Mongabay’s request for comment.

New oil palm plantation established on peatland outside Palangkaraya, Central Kalimantan, Indonesia. Image by Rhett A. Butler/Mongabay.

Socially unsustainable

Syahrul Fitra, a forest campaigner at Greenpeace Indonesia, said that just because palm oil is produced from non-deforested lands doesn’t make it sustainable. He said other factors should be taken into account, including the social impacts of a plantation’s presence on local communities.

“You can’t just look at palm oil from its canopy. People live under that canopy, Indigenous peoples,” Syahrul told Mongabay.

Data from the NGO Consortium for Agrarian Reform (KPA) show that land conflicts with local communities in Indonesia’s plantation sector — dominated by palm oil but also including rubber and other commodity crops — involve mostly between palm oil companies. In 2021, the KPA recorded 74 conflicts in the plantation sector, with 59 of them involving palm oil companies.

These conflicts continue to fester in Indonesia because the country has no effective mechanism for resolving its epidemic of land conflicts between rural communities and palm oil companies, according to a recent study.

Syahrul said producers need to make sure that their plantations are truly sustainable by addressing all social and environmental problems, especially if they’ve adopted “no deforestation, no peat and no exploitation” (NDPE) policies and are committed to acquiring free, prior and informed consent (FPIC) from communities living in areas where they operate.

“We support palm oil to become more sustainable and responsible, but the plantations have to be clear [of all social and environmental issues],” Syahrul said.

Deforestation for oil palm. Courtesy of Greenpeace.
Deforestation for oil palm. Courtesy of Greenpeace.

Prospects for more expansion

The slowdown in recent years of forest clearing for oil palm plantations comes amid a general lull in plantation expansion across all kinds of landscapes. In 2020, there were 16.4 million hectares (40.5 million acres) of oil palm plantations in Indonesia, an increase of less than 2% from the 16.2 million hectares recorded by Auriga in 2019.

This expansion occurred at a time when a government-imposed moratorium on approving new oil palm plantations was still in effect. The policy was aimed at giving the industry an opportunity to address the problems of deforestation, land conflicts and labor abuses long associated with palm oil.

When the moratorium expired at the end of September 2021, the government chose not to renew the policy despite having the option to do so.

During the three years of the moratorium, Dedy said, plantation expansion still occurred, because the policy only mandated a freeze on new palm oil licenses; companies with existing licensed concessions before the moratorium was imposed could still expand within their concessions.

The end of the moratorium has spawned fears of a surge in deforestation as companies apply for licenses for new land; according to one analysis, rainforests spanning an area half the size of California, or 21 million hectares (52 million acres), are at risk of being cleared now that the moratorium is no longer in place.

But even without that prospect, there’s still a vast area of land that companies can cultivate right inside their existing concessions, Dedy said. He cited data from the Ministry of Agriculture showing that the government has issued licenses for 20 million hectares (49.4 million acres) of plantations, of which 16.4 million hectares have been planted.

“This means that there’s still a lot of concession area that hasn’t been planted,” Dedy said. “The moratorium didn’t limit the expansion of the crops. It only limited the issuance of permits. So there’s a possibility that these new plantations are established in old concessions that haven’t been cultivated yet.”


Banner image: New oil palm planting near a protected area in Indonesia. Image by Rhett A. Butler/Mongabay.


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