End of Moratorium Raises Environmental Concerns in Indonesia

Indonesia’s three-year moratorium on new palm plantations ended in 19 September 2021 and so far, the government has yet to indicate whether the freeze will be extended. Without clear regulations, environmentalists are understandably worried about the possible spikes in deforestation rates. There are also concerns that the issues identified during the implementation of the moratorium, such as the 3.4 million hectares of illegal plantations, have not been fully addressed.

Experts and activists are thus calling for a renewal of the moratorium, citing that verbal assurances from the officials that no new permit applications will be entertained are not sufficient.

A photo of a palm oil plantation in the Jambi province. Credit: Antara Foto/Wahdi Septiawan/via REUTERS/CNA

Instead of the moratorium, it would seem that the government will now rely on the infamous Omnibus Law to address the problem of oil palm concessions within forest areas. In an interview with Reuters, President Joko Widodo stated that he has “ordered for this to be inserted in the law so that we don't have to renew it every time it expires... So when (the country's) leadership changes, there is no change in policy.” While it does not prohibit new plantation permits, the 2020 regulations did stipulate that new palm oil concessions are capped at 100,000 hectares, although there is notably no limit to the number of plantations allowed annually.

MOSTA: Prospects of IR 4.0 and Enabling Technologies for Oil Palm Industry

Last Tuesday, the Malaysian Oil Scientists’ & Technologists’ Association (MOSTA) held its annual conference where experts and companies share their scientific progress in the oils and fats field. This year, the one-day event focused on oil palm plantations and was split into three IR 4.0-related themes:

1. Precision agriculture: This system was touted as a way for more efficient agricultural practices, allowing for better science-based decision making, e.g. assessing land suitability. At least one panelist mentioned climate change as a reason for data-driven precision agriculture practices.

2. Farming technologies: There is a notable highlight on drones. Sime Darby claimed that its multi-drone operations will be perfected in the next three years for better parallel spraying and opined that smaller plantations may soon have access to drones-as-a-service as the usage increases throughout the industry.

3. Milling technologies: Panelists were emphasising on the importance of digitising milling practices. Some of the opportunities for growth in this regard include incorporating big cloud computing in the Continuous Emission Monitoring Systems (CAMS) and adopting real-time mobile platforms for mill supervision and inspections.

Source: Chen Zi Yan/Applied Agricultural Resources (AAR; 2021). Mr Chen Zi Yan of AAR presented his team’s assessment of the potential economic costs involved in three different insecticide spraying processes at an 180 ha oil palm plantation.

An interesting observation during the concluding panel discussion: in stark contrast to the overall placid progress-updating event, several panelists voiced frustration over the fact that many of these advancements are apparently contained within corporations; researchers are still struggling to obtain adequate cooperation from the private sector to come up with new tech that would benefit the industry as a whole. Additionally, it was pointed out that there is a shortage of required experts, such as drone pilots and robotics engineers, which will become an increasingly significant concern as more and more plantations adopt newer technologies.

MPOC: Turning Conflict into Coexistence

Palm oil is the lifeline of Malaysia’s economy. It is what puts the food on the table for many Malaysians, living in rural areas. Palm oil is versatile in its usage and it is found in many of the daily products we consume including confectioneries, biscuits, cosmetics, and detergents. However, the expansion of the palm oil industry, especially in Southeast Asia, has come under scrutiny because of its link with degradation of tropical forests as land is cleared for the development of plantations. It has been questioned on its contribution to climate change among other predicaments. 

Therefore, it should come as no surprise that there is negative perception of palm oil in the European Union, Malaysia’s third largest importer of palm oil. Brussels is set to enforce a biofuel restriction, to take effect in 2020. This relates to the EU's renewable transport target, which uses palm oil as one of the feedstocks for biofuel, and seeks to remove deforestation impact. Unfortunately, there is worry about the livelihood of smallholders in the rural areas in Malaysia reliant on the export of palm oil. Some experts have also pointed out that the EU restriction (often confusing cited as a ban) may lead to the expanded cultivation of other (less efficient) vegetable oils. This could harm the environment in a manner comparable to worries about the cultivation of palm oil, if not, worse.

The Malaysian government, in an effort to bolster its palm oil economy (amid this uncertainty), has launched (in phases) the B20 biodiesel programme. It considers this a green fuel programme, and blends 20% palm methyl esters and 80% petroleum (up from the previous B7 blend), thus “increasing the country's palm oil consumption for domestic biodiesel industry rise to about 1.3 million tonnes annually”. The expanded local demand is meant to safeguard the sector and its stakeholders, especially its smallholders.

The cultivation of palm oil is going more sustainable, with research on best practices in the management of its estates and smallholdings, but misunderstandings still arise on conservation efforts - for the wildlife displaced when developing the forest to cultivate palm oil. On its website, The Malaysian Palm Oil Council (MPOC) appears to record palm oil’s (its) wildlife support activities under its Science Of Malaysian Palm Oil section. It initiated the Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF) in 2006 (with a 1:1 top up offer for independent donor funds) to manage the various conservation projects in protecting and rescuing the animals that lost their homes to palm oil plantations. Its website (accessed 5th Nov 2020) lists 10 projects, but details about donor funds, project spending and impacts are not included.

The latest project is the Sabah Wildlife Conservation Colloquium 2012, and there appear to be two ongoing projects:

1. The Jungle Patrol Unit with Sabah Forestry Department to safeguard wildlife and deter poaching, 2007-ongoing; and

2. The Wildlife Rescue Centre with Sabah Wildlife Dept/ShangriLa Rasa Ria for Rescue & translocation of endangered wildlife found in oil palm landscapes, 2010-ongoing.

However, the latest reported Malaysia palm oil efforts, which is not listed on the MPOC’s wildlife page, includes the One Million Forestry Species Tree Planting Project in the Ulu Segama Malua Forest Reserve located in Lahad Datu, Sabah, a project announced in mid-2019.

Palm oil impacts on biodiversity by IUCN (2018)

In other news, the rise of green diesel in Indonesia, i.e. biofuel made entirely from palm oil worries, are not without its concerns; higher demand for green diesel means higher demand for palm oil, which for some experts translates to more environmental problems including loss of biodiversity and forest areas.

Additionally, then-Primary Industries Minister Teresa Kok also stated that the additional RM1 cess per tonne of palm oil produced would be collected and funnelled into a fund for green initiatives, which will then be utilised for wildlife conservation purposes and green initiatives, particularly for forest replanting.

MPOC has hosted talks, conferences and seminars about the sustainability of palm oil. Recently, it held a webinar on the 12th August 2020 in conjunction with World Elephant’s Day, with an overarching theme of ‘Human and Wildlife Co-existence: Turning Conflict into Co-existence’ focusing on human-wildlife coexistence within palm oil plantations and the conservation efforts in protecting the animals who have lost their homes. The panels consisted of Mr. Erik Meijaard (Chair of the IUCN Palm Oil Task Force), Mr. Vivek Menon (CEO of Wildlife Trust India), Dr. Senthilvel Nathan (Sabah Wildlife Department), and Mr. Izham Mustaffa (FELDA).

Aerial view of the Kinabatangan area in Sabah showing oil palm and partial river corridors. Full forest connectivity is crucial to allow wildlife to move through these multifunctional landscapes. Photo and caption credit by Marc Ancrenaz/Mongabay.

Mr. Meijaard discussed biodiversity conservation in oil palm landscapes and commented that it could be better. He explained that palm oil concession companies should set aside 60% of its landholdings for conservation efforts as done by PT KAL (in Indonesia); interestingly, he talked about conservation for orangutans as they are more likely to inhabit palm oil plantations, thereby substantiating the need for a conservation area to allow a ‘cohabitation’. He also questioned the effectiveness of translocating orangutans which involves rescuing, rehabilitating and releasing them back into the wild. What is needed is an effective biodiversity management.

Mr. Vivek Menon and Dr. Senthilvel Nathan approached human-wildlife coexistence, specifically between humans and elephants. Mr. Menon has put forth several strategies for coexistence between humans and elephants, including: (1) addressing habitat shrinkage and fragmentation by securing elephant corridors; (2) addressing and reducing human-elephant conflict through efforts such as voluntary relocation of families and smart infrastructure; and (3) raising the people’s tolerance for elephants.

Dr. Senthilvel Nathan spoke on the human-elephant conflict in Sabah. He noted that elephant deaths in Sabah are attributed to mainly hunting (ivory), accidental deaths (elephants falling into mud pools), and diseases (tuberculosis). There are wildlife management issues, lack of resources and poor coordination between NGOs, industry stakeholders, corporations, and the government; and a lack of general awareness, and poor understanding of several key scientific facts. He pointed to the Sabah State Bornean Elephant Action Plan (2020-2029) that was planned by the Sabah State government through the Elephant Task Force.

Bornean elephants feeding in an oil palm plantation. Photo and caption credit: Nurzahafarina Othman/Mongabay.

The last speaker, Mr. Izham Mustaffa spoke of human-wildlife coexistence from the industry’s perspective. He explained the effects of human-wildlife conflicts: plantations are damaged, palm oil trees were mostly uprooted or broken down. He referred to elephants wandering into the plantations looking for food, leading to standoffs between humans and elephants. The preventive actions taken by FELDA include electric fencing at the borders and translocations to forest-reserves. Mr. Izham suggested a few ways to coexist between humans and elephants: (1) increase awareness among stakeholders and settlers; (2) enriching wildlife habitat; (3) increase food availability in the forest reserve; and (4) establishment of wildlife corridors.

In a nutshell, the webinar was mainly about the conservation of biodiversity in palm oil plantations, which would be possible if all relevant stakeholders have a strong political and public willpower when managing palm oil plantations.

For more on the arguments put forth by the panelists about the importance of biodiversity conservation, just click here.

By Cyrene PERERA, Segi Enam intern, 17 Nov 2020 | LinkedIn

Edited by KHOR Yu Leng and Nadirah SHARIF

Smallholders in the Palm Oil Sector

The importance of smallholders in the palm oil sector is often misunderstood or overlooked, especially when it comes to their role in improving the sustainability of the industry. Sustainability criteria, including the ESG standards, are used by palm oil companies for complying to international requirements and increasing economic benefits, but the reported scores are rarely a reflection of the local reality (Moohan-Sidhu, 2018; Thoumi, 2018).

Smallholders, as defined by the RSPO, are farmers growing palm in small plantations with an area below 50 ha where the family provides most of the labor. These family farms manage 40% of the global palm oil production area, a percentage which will continue to expand due to companies facing increasing barriers for opening new large tracts of land (Jeezer et al., 2019). Independent smallholders, as opposed to those under a scheme, are the most neglected in the sector. They have more difficulty accessing financial resources and produce around 20% lower yields than company plantations (Jelsma et al., 2019). Independent farmers represent a large portion of all smallholder area—for example, in Indonesia more than half of these area, 2.54 million ha, corresponds to independent smallholders. 

A Lubuk Beringin villager, Rahimah, 70, harvests palm nuts for palm oil on her agroforestry farm at Lubuk Beringin village in Jambi province, Indonesia. Caption from: Hans Nicholas Jong/Mongabay. Photo by: Tri Saputro/CIFOR/Flickr.

Including smallholders in the palm oil supply chain and addressing their state of exclusion is crucial for attaining environmental and social results. Despite some attempts to promote the adoption of standards among small producers only a low number of independent smallholders have been certified (Sagar et al. 2019). In Indonesia, only 1% hold a RSPO or ISPO certification (WRI, 2018). Other efforts led by palm oil companies which claim sustainability objectives, such as the Indonesia Palm Oil Development for Smallholders program implemented by Musim Mas, are focused on improving the productivity and traceability of smallholders along the supply chain. However, these ultimately end up benefitting companies but having little environmental impact. These initiatives do not show clear results in terms of avoided deforestation nor accountability for the distribution of premia returns to local communities.

Including smallholders and reducing the barriers they face are crucial for attaining credible and measurable sustainability results at a significant scale. While increasing the equity of the palm oil supply chain will create its own set of challenges, such addressing the complex traceability, accessibility, and layered sourcing system, ultimately it is worth the effort.

By Sandra CHIRI, 16 Nov 2020

Consequences of Oil Palm Expansions - read of an academic article

A recent study on the environment, economic, and social consequences of oil palm plantations has been published in May 2020 by Matin Qaim et al. The article is useful—it collates research findings from other studies and paints a good overview of the issues with regards to oil palm expansions.

Some of the more interesting points in the article are as follows:

1. Total deforestation attributed to oil palm expansions across the world varies between countries. During the last 40 years, oil palm accounts for 47% of total deforestation in Malaysia and 16% in Indonesia. In Nigeria between 2005 and 2015, only 3% of total deforestation was due to oil palm expansion. Globally, approximately half of existing oil palm areas have contributed toward forest loss.

2. Oil palm plantations have strong adverse effects on local and regional air and water quality, especially if the land was establish using fire (and exacerbated by weather events such as the El Niño). Oil palm plantations have also been found to emit volatile organic compounds, promoting the production of haze and aerosol, as well as lowering regional water quality via the excess use of fertilisers.

3. Oil palm plantations have contributed significantly to rural economic development, generating income for farmers, labourers, and those involved in the oil palm supply chains. Generally, farm households across the world do economically better compared to farmers not involved in the cultivation of oil palm. Likewise, rural non-farm households also benefit, mainly in the form of additional employment opportunities due to the labour intensive nature of the industry.

4. There are legitimate concerns regarding unequal distribution of the economic benefits mentioned in the previous point, i.e. some farm households may have better access to capital and hence are able to adopt oil palm much easier than others. Social and human rights issues, including forced and child labour, are also a source of great concern.

5. The article highlights the difficulties faced in the oil palm discourse—it acknowledges that while banning the use of oil palm may help solve the environmental issues the crop brings in the short run, doing so now will result in a large economic loss, which in turn may lead to even larger environmental problems, since farmers will simply replace oil palm with another vegetable oil with higher land requirements per unit of output.

Gender Issues: Women in Palm Oil Plantations

For women, there’s a bit of good news on the international front: Harvey Weinstein is finally found guilty. In global news headlines, concerns surrounding women at the workplace, attention is on the Weinstein case as well as Michael Bloomberg’s offer to release female employees from three non-disclosure agreements.

These appalling situations have come to light under the #MeToo movement. They highlight a shift in public opinion and there is hope the law changes the way it addresses gender discrimination and sexual allegations. Wall Street Journal’s Laura Kusisto (referring specifically to the Weinstein verdict) explains that factors which would have jeopardised a conviction before (such as the victims having to maintain cordial relationships with Weinstein even after his attacks), no longer hold the same currency today; the courts and the people in general are beginning to acknowledge that such complications do not invalidate the fact that misconduct occurred.

These issues turned our minds towards gender issues in the palm oil sector and its plantations. While rather distant and very different from the elements present above, there is concern about systemic issues and the discriminatory treatment of women at work. Our preliminary research into the matter revealed some issues at the estate and farm level:

1. Women have been largely hired as temporary workers and casual day labourers. Lacking permanent employment status, many female workers do not have pensions and other benefits including maternity leave, and they are vulnerable to sudden termination.

2. Field work is still largely gender segregated, especially since a fresh fruit bunch of palm oil can weight 20-30kg and mechanisation is limited. Women are generally given less physically demanding tasks: spreading fertilisers and spraying pesticides. Many female workers are exposed to harmful chemicals and there is concern about the adequacy of personal protection equipment and use compliance.

3. Many women (and occasionally even their children, but this should only be in their spare time after school), help their husbands, who are plantation workers tasked with collecting fruit bunches, to reach their husbands’ daily collection targets and bonuses. The work that these women may be largely unpaid (an example otherwise is the ‘Mama card’ in PNG where women earn on loose fruits collection).

Many key plantation companies have taken major steps to address these problems. (Ask us if you’d like to know more about the move to estate level gender committees and more). The position of women in palm oil is similar to the situation faced by women in other agriculture segments. There are systemic issues, but this is no longer an acceptable excuse. Only time will tell when more women workers gain more equitable outcomes in terms of permanent work status, job risks, pay and pensions.