Between 1990 and 2002 the global planted oil palm area increased by 43%. Most of this growth occurred in Indonesia and Malaysia. In Indonesia, between 1990-2000, the total area planted with oil palm almost tripled from 1.1 to 3 Mha (million hectares). In 2002, overcoming the 1997-1999 financial crisis, the total mature oil palm plantation area reached 3.5 Mha. Assuming recent planting rates, the total area of oil palm plantations in Indonesia is set to increase to 11.2 Mha in 2020.
The total area set aside for oil palm is an expansion target rather than a ceiling to expansion (in the early 1990s, a similar target of 5.5 Mha was set, which was dropped and replaced by 9.13 Mha). It is highly likely that the Indonesian government, either at national or local level, will bow to the massive interest of the private sector to engage in the oil palm business as well as to the ambitions of local governments who, along with decentralisation policies, were empowered with great land use decision making powers in 2001.
The original habitat in most areas suitable for oil palm is lowland evergreen tropical rainforest. According to the latest revisions of permanent forestlands, not officially published, the area of convertible forestland has increased from 8 Mha in 2000 to 14 million in 2002. Indonesian Palm Oil Research Institute (IOPRI) estimates that 3% of all oil palm plantations are established in primary forests and 63% in secondary forest and bush. So, according to industry data, 66% of all currently productive oil palm plantations involved forest conversion.
However, actual planting rates in Indonesia lag well behind allocations by the government. Of the 7.2 Mha released during the 1990s, only 530,000 ha (7.5%) were actually planted in 2002. This is in part because of the monetary crisis of 1997-2002, during which time few companies could afford to obtain credit to commence their planting programs. Another factor is that many "oil palm" companies are interested in the timber stands rather than in implementing their plantation projects. Around 70-80% of the new oil palm projects are allocated in production forests with a high forest stocking which provides a pre-start up bonus in the form of sale proceeds from the timber stands. After taking the timber stand, many companies abandon the project altogether. In the province of Jambi around 800,000 hectares of forest cleared to set up oil plantations was abandoned. In Landak district, West Kalimantan some 300,000 hectares have been neglected.
Field observations indicate that many oil palm plantations in Indonesia are planted in areas that were clearly forested immediately prior to conversion to plantation.
In Sembuluh, Central Kalimantan, PT Kerry Sawit Indonesia (subsidiaries of the Sabah based plantation company Perlis Palm Oils Berhad) is about to start field operations to plant 17,200 hectares of land. Within the area, there is still some 7,500 hectares of forest and forest gardens that local community members desperately wish to see protected against conversion. The forest area is one of the last in the area of Lake Sembuluh that is completely surrounded by oil palm estates.
In Muara Wahau, East Kalimantan, a PT SMART (Sinar Mas) subsidiary converted some 2,500 hectares of primary forest into oil palm plantations. The lowland forest in the PT Matrasawit area used to provide habitat for the orangutan, an endangered and protected species in Indonesia.
In Riau, Sumatra, a subsidiary of the Indonesian Indofood Sukses Makmur group (PT Gunung Mas Raya) is in the process of clearing peat-swamp forest, part of which may be outside the concession boundaries. If this is the case, it will be in contravention of the risk policy of one of the group's main investors, ING from the Netherlands, which has a policy of not financing illegal forest conversion.
Satellite map analysis undertaken by the Indonesian NGOs Sawit Watch and Friends of the Earth Indonesia (Walhi) found that around Lake Sentarum National Park in West Kalimantan, the oil palm plantation area grew from 3,000 hectares in 1994 to 94,000 hectares in 2000. Meanwhile, according to newspaper reports, the total forest area decreased from 528,300 hectares to 323,000 hectares.
Around Mount Meratus in South Kalimantan, some 43,000 hectares of forest have been converted into plantations since 1994, enlarging the total area of plantation from 86,000 hectares to 129,000 hectares. The forest areas surrounding Mt. Meratus meanwhile shrunk from 1,337,000 to 987,000 hectares.
Map and anecdotal evidence strongly suggests oil palm plantations have been developed within a number of other national park buffer (low intensity use) zones as well including Tanjung Puting National Park, Bukit Tiga Puluh National Park and Gunung Leuser National Park.
Apart from rampant deforestation, oil palm plantations have resulted in the death of dozens of people that have been killed in land tenure and labour related conflicts, while hundreds of deaths can be attributed to the environmental impacts of oil palm expansion.
This expansion destroys ecosystems and wildlife in one the worlds' most biodiverse regions. It also destroys indigenous peoples' way of life, self-determination and culture.
Plantation labour is generally poorly paid, highly dependent on the employer in all aspects of life and regularly exposed to danger and unhealthy working practices. Inequities between various types of labour (day labour vs. permanent workers, men vs. women) are widely reported. Pesticide use poses a real health risk to (predominantly female) plantation workers all over the region. The plantation sector is the most conflict ridden economic sector in Indonesia. Most conflicts result from land tenure issues and the weak legal protection afforded to local communities.
In sum, oil palm plantations in Indonesia have extremely high social and ecological costs. These costs, which are often hard to express in hard currency terms, include tropical forest destruction, biodiversity losses, illegal practises, land rights conflicts and human rights violations, labour disputes, unfair treatment of smallholders, the collapse of indigenous cultural practises and exposure of vulnerable local economies to capricious global market forces.
Excerpted from: “Greasy Palms. The social and ecological impacts of large-scale oil palm plantation development in Southeast Asia”, March 2004, Eric Wakker, AIDEnvironment, in collaboration with Sawit Watch Indonesia and Joanna de Rozario for FOE, http://www.foe.co.uk/resource/reports/greasy_palms_impacts.pdf
