Palm Oil Production in Indonesia - Unsustainable, Unethical, Unproductive

Indonesia, located in Southeast Asia, is the world’s top producer of palm oil, with millions of hectares of land occupied by palm oil plantations (Petrenko et al., I). The expansion of palm oil is a relatively new case, yet the production of this commodity has already had impacts on great areas of tropical rainforests, air and water quality, involved farmers and workers, indigenous populations, and more. Palm oil is widely used in our daily lives, from food uses to cosmetic products to biodiesel, but the impacts that the production of this commodity creates are detrimental to the environment and to the human population. The depth of conflict and consequences that palm oil production has on the country of Indonesia is immense. The production of palm oil in Indonesia is harmful to the environment and to certain involved human populations, and increased regulation and alternatives would be beneficial in combatting many aspects of this harm.

Palm oil has been used and produced for thousands of years. This commodity is produced from the fruit of the oil palm tree. The origin of palm oil production began in Africa, but in a relatively recent phenomenon, production has shifted to South East Asia, particularly Malaysia and Indonesia. Indonesia has surpassed Malaysia in production in recent years, specifically around 2008, and production in this country has exponentially increased since (Shigetomi et al., 1). This sector has become a large contributor to Indonesia’s economy as demand for palm oil increases. After this shift, the Indonesian State justified palm oil production and its natural resource exploitation because its original aim was to develop the economy and combat poverty (Varkkey 3). The original objectives of this industry were to benefit the State, but after its exponential growth, exploitation of natural resources and human populations became apparent.

In 2017, Indonesia was responsible for almost 50% of global palm oil production and is now the “world’s largest producer” (Shigetomi et al., 1). The demand for palm oil is the driving force behind this exponential increase in production, due to its versatility, as well as its high yield per hectare of land used. This crop yields “nine times as much oil as soybean, 7.5 times as rapeseed, and six times as sunflower per hectare” (Kadarusman and Pramudya 901). Because palm oil uses less land to produce a larger amount of oil, it results in a higher income, which makes palm oil the preferred vegetable oil for companies to cultivate and produce. Palm oil has many uses, such as its inclusion in food and cooking practices, its use in cosmetic products, soaps and detergents, printer ink, and biodiesel production (Shigetomi et al., 1). The uses of palm oil expand far beyond just cooking and consumption and is used in a multitude of products, making it an appealing commodity to produce and buy. While palm oil is seemingly a superior choice in vegetable oil and seems to have many benefits, these benefits are outweighed by the environmental and human harm that the production of this crop causes.

The biggest consumers of palm oil globally are India, China, and the European Union. With the rapid expansion of palm oil production, it has become apparent that buyers and importers of the Global South have more of an impact and could be considered to be more important than buyers and importers of the Global North and the European Union. This idea is shown in the article by Kadarusman and Pramudya, who state that in 2017, “export of Indonesian palm oil to India (7.63 million tonnes) has surpassed that of the EU (5.03 million tonnes)” (Kadarusman and Pramudya 899). Palm oil is a major source of exports from Indonesia, especially to China and India, which is a major reason as to why the production of palm oil is such a large aspect of Indonesia’s economy. The demand for palm oil all from over the world, especially China and India, is what drives this business.

The high demand for palm oil and capital gain from this industry may lead to “maximizing economic gains” through the use of natural resources to produce this commodity at the “cost of environmental degradation” (Kadarusman and Pramudya 900). The reward for corporations and businesses producing and selling palm oil is put first before the conservation and protection of the environment (Kadarusman and Pramudya 900). Large private companies, small-holders, and state-owned companies contribute the most to production, and thus, have the most impact (Kadarusman and Pramudya 902). These businesses often overlook the environmental consequences of their production practices, as well as the exploitation and disregard of human rights of indigenous peoples inhabiting these tropical forests, palm farmers, and plantation workers.

The Indonesian State promotes this palm oil industry, and the state-led development makes it difficult to shift focus to more sustainable and ethical practices. Indonesia is one South-East Asian country that “developed policies towards forestry and agriculture that moved beyond micro level and sector-specific concerns and took steps to ensure that the overall macro policy environment was conducive to the growth of the agricultural sector” (Than 1998, as stated in Varkkey 2). The Indonesian State recognized that the agricultural sector of this industry was a driving force for economic growth (Varkkey 2). This fact is another reason as to why the palm oil industry in Indonesia is so prevalent despite its negative impacts and plays such a significant part in the Indonesian economy, because it is encouraged and developed by the State.

One of the most substantial environmental impacts of palm oil production in Indonesia is deforestation, specifically of tropical rainforests, due to its rapid expansion and the resultant need for agricultural space. Indonesia is home to one of the “largest remaining tropical rainforests in the world,” Sumatra, but has also experienced hastened deforestation, with a “13% loss of forests since 2000” (Austin et al., 2017). Deforestation is one of the most impactful outcomes of palm oil production in Southeast Asia, and especially in Indonesia specifically. The practice of deforestation, especially in these tropical forests that contain high levels of biodiversity and act as homes to indigenous populations, leads to a multitude of environmental and human impacts. The production of this crop tends to be placed higher in importance over the forests that cover the land of Indonesia by private companies and farmers that own palm oil plantations.

Deforestation tends to arise when the supply of farmland from areas previously forested meets the demand for new agricultural land, increasing the need for more land available for agriculture (Cisneros et al., 2021). Cisneros continues this statement by stating that “population growth, economic development, and changing consumption patterns” are some of the driving forces for deforestation (Cisneros et al., 2021). Due to the great demand for palm oil, more land is needed for cultivation, and therefore, more deforestation occurs. As Indonesia and Malaysia are the top producers of palm oil, they have seen the most land and forest converted to palm oil plantations. In fact, “plantations nearly quadrupled in extent between 1990 and 2010, from 3.5 to 12.9 million hectares" (Gunarso et al., 2013, as stated in Austin et al., 2017). This puts into perspective the large amount of land that the cultivation of palm oil has taken over, much of which is converted from forests.

The expansion of agricultural land needed for palm oil plantations contributes to a multitude of other environmental impacts. Land-use change has been proven to contribute to global climate change through the emission of greenhouse gasses, specifically carbon. Global climate change is an ever-growing and evolving environmental issue that our world is faced with, and industry and the production of goods by private companies and large corporations contribute to a great deal of the greenhouse gases that cause this change. Deforestation, as well as peat degradation in Indonesia, contributed “1 to 4% of the global anthropogenic greenhouse gas emissions in the years 2000 to 2010” (Busch et al., 2015, as stated in Lam et. al., 2019).

The production and cultivation of a single crop in a single country contribute to over a percent of global greenhouse gas emissions. Land-use change in the South-eastern tropics accounts for “10-20% of total global greenhouse gas emissions making it the second largest GHG source in the world” (Petrenko et al., i). The palm oil industry contributes to this percentage, showing how unsustainable the cultivation of this crop is. Carbon emissions from the palm oil industry can be attributed to both deforestation, as well as the processing of palm oil (Petrenko et al., I).

A large contributor to these carbon emissions, and to other environmental and human impacts, is forest fires. Forest fires for land clearing are a practice used in Indonesia in order to deforest the land for palm oil cultivation, which contributes to the release of greenhouse gasses, and harms the living organisms in these rainforests. These fires can cause damage if they escape the allotted portion of land that is meant to be deforested, and harm important land such as primary forest (Cattau et al., 2016). These fires are also a major cause of “smog and particulate matter pollution, habitat loss and degradation, and economic costs” (Cattau et al., 2016). The burning of forests contributes to the emission of carbon, and harms the local flora and fauna. With the exponentially growing business of palm oil production, it is detrimental that these practices are minimized, so as to ensure the safety of the environment and of the people affected.

A loss of biodiversity is also a large impact due to land-use change, as deforestation, especially from forest fires, destroys habitats and resources for Indonesia’s plants and animals. Biodiversity is important to any region as it provides environmental, cultural, and economic benefits. The article, “ Ecological Impacts of Palm Oil Expansion in Indonesia” explains how biodiversity is beneficial as it maintains other ecosystem services, such as water filtration (Petrenko et al., 3). Biodiversity helps contribute to cleaner air and water, increases the ability of regions such as these tropical rainforests to supply oxygen, promotes pollination, and more. Biodiverse areas also support “human lifestyles and recreation” (Petrenko et al., 3), providing shade and aesthetically-pleasing space for a multitude of activities and aspects of life. The tropical forests in Southeast Asia are areas of high biodiversity. Over 200 plant species are contained in just one hectare of tropical rainforest in Indonesia (Petrenko et al., i), and destroying these forests directly harms these plants. Some animal populations in these forest regions are declining as well, such as the orangutan, which is only found in Sumatra and Borneo (Petrenko et al., 3).

Populations of fish species are also declining from habitat degradation as well (Petrenko et al., i). The destruction of these plants and habitats also destructs the benefits that they provide and takes away the natural balance of the ecosystem and its services. High levels of biodiversity have been linked to “increased ecosystem health, such as better soil formation, nutrient storage, pollution breakdown, and the ability to recover from natural disasters” (St. Clair and Conklin 51). Biodiversity is important for ecological connections and systems, and the destruction of forests causes the destruction of these important connections and systems, reducing the environmental quality and functionality of these areas.

The production of palm oil and the destruction of tropical forests in Indonesia for the production of palm oil has harmful environmental impacts, but it also has harmful human impacts as well. The rights of indigenous peoples who inhabit the land are often overlooked or worked around due to weak governance. The Indonesian State focuses on income and making a profit, and tends to shift focus from the rights of indigenous peoples to the business that comes from palm oil production. According to Astuti, “Drawing on market rationalities such as profit maximisation, Indonesia’s neoliberal policies have opened the path for the issuance of forest concessions to private companies, often at the expense of local and indigenous communities” (Gellert 2005, as stated in Astuti 2021). Private companies involved in palm oil production, in a way, have more control over the land that they use for production than the Indonesian government. The Indonesian government places little emphasis on recognizing the rights of indigenous people, so that emphasis can be placed on the production of palm oil and a high profit can be made. There are many negative results to this kind of control that private companies have on indigenous people and traditional workers that live on and rely on this land for survival. Traditional landowners tend to see “restrictions on land-use rights and land losses” (Obidzinski et al., 2021, as stated in Petrenko et al., 12). Native customary rights, which set up land ownership, are “often ignored when plantations are established” (Marti 2008, as stated in Petrenko et al., 12), and there are “countless reports of indigenous peoples not being notified of or consulted about impending deforestation” (Petrenko et al., 12). The unjust treatment of indigenous peoples on this land is due in part to the fact that land that first belonged to indigenous populations was not originally formally recognized by the government (Varkkey 2).

Regulations and procedures are proving unequal to the exponentially increasing demand for palm oil, which leads to the increasing demand for agricultural land. Most of the people who own this land, and who owned the land before this exponential increase are indigenous populations, and these laws are not effective when it comes to protecting and recognizing the rights of these people (Colchester 3). Many indigenous peoples and farmers who originally owned the land are not seeing their rights being met, which reduces their quality of life, and makes small-scale farming on their own land difficult.

Traditional farmers and customary land users tend to be the most negatively affected by deforestation and land-use change (Petrenko et al., 12). They often have to travel farther for forest resources, and may even be forced to change professions when these resources are depleted (Obidzinski et al., 2012, as stated in Petrenko et al., 12). The people who originally inhabited these areas and rely on tropical rainforests for profit are looked over, and their rights are not respected by private companies that use the land for palm oil production. These local farmers and communities “suffer a loss of livelihood” when the land that they own is converted to plantations because they can “no longer cultivate crops on the land” (Ayompe et al., 2021). These local farmers originally cultivated the land, and rely on this land for survival and for a decent quality of life. Palm oil companies take over this land and push aside the rights of these local farmers, making it difficult for them to sustain a good quality of life and to survive.

An argument that has been addressed that supports the production of palm oil in Indonesia is that this business provides employment opportunities. While this fact may be the case for some, these employment opportunities tend to be harmful to Indigenous peoples and many of the workers and farmers involved. The quality of their life as a result of working for these palm oil companies is lower compared to other employment opportunities. Indigenous Indonesians in this field tend to lack “land, clean water, and livelihood options,” and these employment opportunities lead to the “destruction of culture and tradition” (Petrenko et al., 12). These populations’ land is taken and converted by large corporations and private companies, and the employment opportunities that are made available provide little benefits and overlook the rights and necessities of these people.

Beyond just indigenous populations, farmers, and workers that work on these palm oil plantations tend to see inequality and exploitation. While the palm oil industry brings adequate economic returns, the cultivation of palm oil leads to economic inequality among farmers (Shigetomi et al., 8). With the exponential boom that the palm oil industry experienced, came an increase in income, but that income was limited to farmers who owned their own farmland (Shigetomi et al., 8). As mentioned previously, farmers see little benefits from working on plantations, and are “often paid less than the minimum wage and are frequently exposed to dangerous chemical processes” (Shigetomi et al., 8), which are direct examples of exploitation of these workers. Hired farmers are not paid enough to live a decent quality life, and are put in potentially dangerous situations, resulting in diseases from production practices and harmful effects of dangerous chemical processes.

These environmental and human impacts of palm oil production in Indonesia make it apparent that change in this industry is necessary. Efforts have been put in place to make this industry more sustainable, and to reduce the exploitation of workers and farmers. One main effort that has been made is the creation of a non-profit organization called the Roundtable of Sustainable Palm Oil. The RSPO was initiated in 2004, and “developed a certification process in which palm oil plantations are assessed for compliance with a set of eight principles” (Myzabella et al., 2019). For a company to be certified by the RSPO, it must comply with the environmental and social criteria determined by the organization (Gabor et al., 192). Some of the criteria that companies have to meet include biodiversity protection, the reduction of pesticide use, control of fires, and a “fair attitude towards workers and the local community” (Gabor et al., 192). The RSPO is one of the most important and positively impactful non-profit organizations that work to promote sustainable practices and environmental protection within the palm oil production industry in Indonesia.

Efforts implemented by the Indonesian State are the most pressing and would promote the most change in the palm oil industry. It is clear that “enhanced regulation and stricter law enforcement are needed to protect biodiversity and limit deforestation and pollution” (Petrenko et al., 13). A specific regulation that would increase the protection of the environment and promote sustainability is the diversion of new development for plantations from primary and secondary forests, and deforested regions should be left to regenerate (Petrenko et al., 13). Building plantations on non-forested lands would decrease the contribution to biodiversity destruction and greenhouse gas emissions that deforestation induces. Enhanced regulation is also necessary for the protection of indigenous populations and to combat the exploitation of workers.

The “assessment of management plans and the evaluation of proposed plantation land before a plantation can be erected” would encourage more sustainable production, as negative impacts of a plantation would have to be considered and addressed (Petrenko et al., 13). Other measures such as the implementation of organic rather than chemical fertilizers would help to combat the pollution that this palm oil production creates. There are a multitude of efforts that could be implemented by the government through increased regulation to combat the negative effects of palm oil production, especially because of the amount of control that the Indonesian State has on this industry. While some efforts have been made to combat the negative effects of this industry, especially by non-governmental organizations, more efforts should be implemented by the State in order to bring about the most change.

The exponential production of palm oil in Indonesia is harmful to the environment and to indigenous peoples, farmers, and workers, and the adoption of stricter laws, as well as alternatives to the production practices used, are crucial to combating harm that is caused by the industry. The Indonesian State, which has the most control over this industry, encourages the production of palm oil in order to make a profit but puts emphasis on this business rather than the environmental and human impacts that the industry causes. The biggest issues that arise from this industry are deforestation, which causes a chain reaction of other environmental issues, as well as the lack of attention given to indigenous peoples and farmers. The rights of these people are overlooked and ignored by the State. The multitude of environmental and human impacts that have arisen due to palm oil production make it clear that change needs to be made, and the most impactful change needs to come from the Indonesian government.

References

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