Southeast Asia’s palm oil bonanza has been dealt with a blow with new scrutiny over its environmental impact and apparent support of sustainability goals in the current global climate change regime.
Accounting for 85 per cent of the world's supply of crude palm oil, and an average revenue stream of more than US$6 billion a year, the region’s palm oil giants, Malaysia and Indonesia are eagerly pumping in billion-dollar investments to convert palm oil as biofuel and as an alternative to trans fats to serve the green and nutritional needs of the United States and European markets.
Last year for example, Malaysian exports of palm oil – already the world's largest – grew to a record RM31.8 billion ($14 billion), which is 5 per cent higher than the 2004 record. Elsewhere, Indonesia’s biofuel production rate and land-use expansion for palm oil cultivation – a total of 5.06 million hectares in 13 provinces – are touted to boost the country’s status as the world's largest producer of palm oil to overtake Malaysia.
Yet, recent media reports as well as those of environmentalists are questioning the environmental sustainability of the biofuel production process. In an article published last January, the Herald Tribune said that rising demand for palm oil in Europe had brought about massive deforestation and the overuse of chemical fertilisers in Southeast Asia. Furthermore, the expansion of palm plantations was extended to the draining and burning of peatland, which created huge amounts of carbon emissions into the atmosphere.
According to the 2005 report by Friends of the Earth, 87 percent of the deforestation in Malaysia between 1985 and 2000 was caused by new oil-palm plantations, while Indonesia witnessed the amount of land devoted to oil palm increasing by 118 percent in the past eight years. “If forest destruction continues at the same scale and speed, the orang utans will be lost within 12 years," the report added.
Malaysia has denied the claims, saying that forests are no longer cleared for plantations. Indonesia’s biofuel drive also remains undeterred, as the director of the Energy and Mineral Resources Ministry's research and development unit, Nenny Sri Utami, said that the plan to turn more than five million hectares over to growing the feedstock for the biofuel plants would go ahead as planned.
Utami also said the allegations made by the environmentalists were groundless, citing a 2006 presidential decree on the development of the biofuel sector where only idle or critical land can be used for the development of biofuel-feedstock plantations. According to Deka Mardiko of the Forestry Ministry, “none of [the biofuel development] areas are located in protected forests." Mardiko further assured that "we are working together with the National Land Agency, Agriculture Ministry and Home Ministry to check whether the areas are located in forests or not…If anyone is caught clearing land in a protected area, even if he wants to grow biofuel feedstock, he will be charged with illegal logging."
On the issue of illegal logging, Forestry Minister MS Kaban took a more serious stance at the Country Leaders Initiative (CLI) meeting of the UN Forestry Forum (UNFF) in Bali on February 13, when he revealed that “President Susilo Bambang Yudhoyono has even personally called for serious attention to illegal logging due to its adverse impacts." Minister Kaban also called on all countries to address the problem, since the impact of forest degradation could be felt world-wide. A day before the meeting, Indonesia also forged a landmark 'Heart of Borneo' agreement with Malaysia and Brunei, to conserve about 220,000 sq km of equatorial rainforest covering about a third of the island.
According to the WWF, the agreement also ended plans to create the world's largest palm oil plantation in Kalimantan, along Indonesia's border with Malaysia. 'The scheme - supported by Chinese investments - was expected to cover an area of 1.8 million hectares and would have had long-lasting, damaging consequences to the 'Heart of Borneo',' it said.
While Indonesia appears to score on the forest conservation front to avert bad publicity for its biofuel drive, the country’s woes in other environmental disasters remain. The mud volcano problem in East Java since May last year has reached a new peak in the social response to the widespread economic and environmental damages, as the Indonesian environmental watchdog, WALHI, filed a suit on February 12 against PT Lapindo and President SBY.
As Chalid Muhammad, the chairman of WALHI, explains, "we are taking them to court because the mud outflow caused by Lapindo has thoroughly damaged the environment in Sidoarjo." President SBY, the energy and environment ministers and local officials were named as defendants for failing to quickly contain the mud spill. (15 February 2007).
Massive Biofuel Program to Go Ahead Despite Int'l Concerns (Jakarta Post, 6 February 2007)
Environmental concerns grow as palm oil becomes popular energy source (TODAY, 12 February 2007)
Indonesia watchdog sues over 'mud volcano' (Channel News Asia, 12 February 2007)
RI asks all countries to participate in illegal logging eradication efforts (Antara, 13 February 2007)
3-nation accord to conserve Borneo rainforest (AFP/The Straits Times, 13 February 2007)