Borneo
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The Impact of Oil Palm in Borneo

By Rhett A. Butler

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Indonesia's national airline to start using palm oil biofuel
(08/28/2014) Indonesia's national airline, Garuda Indonesia, says it will start mixing palm oil-based biofuel with its jet fuel as part of an initiative to "reduce" carbon emissions, reports The Jakarta Post.


Meeting an Illegal Logger
(08/27/2014) 'I make six times the amount of money logging as I would working my small plot of land or even working legally in a pulp and paper or palm oil plantation.' An illegal logger explains the economic conditions in South Sumatra. Mongabay Special Reporting Fellow Robert S. Eshelman interviews an illegal logger in Indonesia on the topic of cleaning up commodity supply chains.


What lies within, we may never know: deforestation threatening Sulawesi’s unique wildlife
(08/26/2014) For 10 million years the Indonesian island of Sulawesi has been disconnected from other landforms, almost inviting evolution to color outside the lines. Despite a growing population and limited space, Sulawesi has managed to provide a safe haven to hundreds of unique species as they evolved over millennia. But that haven may soon be lost to uncontrolled extraction of forest products from Sulawesi’s many pristine ecosystems.


Indonesia's forests so damaged they burn whether or not there's drought
(08/21/2014) Air pollution caused by fires set for land-clearing on Sumatra has become a regularly occurrence in Southeast Asia. While these fires are often termed forest fires, the reality is much of the area that burns each year has already been deforested and today mostly consists of grass, scrub, and remnants of what was once forest. But the impacts are nonetheless very substantial, finds a new study published in the journal Scientific Reports.


ConAgra adopts greener palm oil policy
(08/14/2014) U.S. food giant ConAgra has adopted a new sourcing policy that will exclude palm oil produced at the expense of rainforests and peatlands.


Elephant poaching soars as Sumatran forests turn into plantations
(08/14/2014) There has been a spike in elephant deaths in Sumatra this year, and conversion of rainforest to plantations is one of the main causes. The number of Sumatran elephants poached in the province of Riau so far this year is staggering, with 22 reported kills in the first six months of 2014 compared to 14 for the entirety of 2013.


Indonesia cracks down on illegal burning, investigates more suspect companies
(08/14/2014) Every year, thousands of hectares of Indonesian forest are illegally burned by development companies. However, Indonesia’s Minister of Environment, Balthasar Kambuaya, is optimistic that legal charges over such fires can be completed – even though he has just three months left in office.


Big palm oil companies move forward on carbon study
(08/14/2014) Seven palm oil giants have agreed to fund a study that will define what constitutes "High Carbon Stock" (HCS) forest, a move that will potentially determine the fate of ecosystems around the world as more companies commit to "zero-deforestation" policies based on the amount of carbon stored in vegetation.


Forgotten species: the exotic squirrel with a super tail
(08/13/2014) With among the world's largest tails compared to body-size, the tufted ground squirrel just might be the most exotic squirrel species on the planet. Found only on the island of Borneo, this threatened species is also surrounded by wild tales, including the tenacity to take down a deer for dinner. New research explores the squirrel's monster tail and whether other tales about it may be true.


Indonesia's children see ravaged environment in their future
(08/11/2014) A generation ago, Borneo was one of the wildest places on the planet. But decades of logging and oil palm plantations has changed the landscape of Borneo forever: in fact a recent study found that the island has lost 30 percent of its total forest cover since 1973. In the face of this large-scale environmental destruction, a new study finds that Indonesian Borneo's children have a pessimistic view of their future.


THE SOCIAL IMPACT OF OIL PALM IN BORNEO

For most of its history Borneo was scarcely populated by humans. The unforgiving climate and dense rainforest kept populations small and scattered. In the past half century this has all changed. The influx of more than half a million transmigrants into Borneo over the past thirty years has doubled the island's population and created tremendous demand for jobs. Initially the rubber and logging industries provided employment, but when this collapsed in the mid- (Malaysia) to late-1990s (Kalimantan), work opportunities dried up for most of the local population. Despite this, hundreds of new arrivals continued to show up in Borneo on a weekly basis.

Rising unemployment was a serious concern in Borneo in the late 1990s and early 2000s and ethnic conflict raged in parts of Kalimantan during this time. The sudden rise of the oil palm in the late 1990s and early 2000s was seen as a welcome opportunity for many residents and local governments. Observers are only now seeing the full-cost of rapid growth in the sector.

Environmental Impacts

Beyond the obvious deforestation that results from clearing lowland rainforest for plantations (86 percent of deforestation in Malaysia from 1995-2000 was for oil palm plantations), there are other environmental impacts of oil palm cultivation. Several studies have found a significant reduction (on the order of 80 percent for plants and 80-90 percent for mammals, birds, and reptiles) in biological diversity following forest conversion to oil palm plantation. Further, many animals will not move through plantations while others, like orangutans, become crop pests putting them at risk of defensive poaching by plantation managers. The use of herbicides and pesticides can also impact species composition and pollute local waterways. Drainage systems required for plantations (oil palm plantations in Borneo are often established in swamp forest) may lower water tables, affecting neighboring forest areas. Further, destruction of peat lands increases the risk of flooding and fire. Land-clearing fires set by large oil palm plantation owners were the single largest cause of the massive 1997-1998 fires in Borneo.

For more see Why is oil palm replacing tropical rainforests?

Social Impacts

The social impacts of oil palm plantations are just beginning to be understood, in a large part thanks to the work of Dr. Lisa Curran. While there is no doubt that oil palm plantations provide much needed employment opportunities in Borneo there are questions on the fairness of the existing system which appears to sometimes lock small plantation owners into conditions akin to slavery.

Given the scarcity of timber in parts of Borneo, much of its population has few economic options at present. Oil palm seems to be the best alternative for communities that are just eking a living off rubber cultivation, subsistence rice farming, and fruit gardens. When a large agricultural firm enters an area, some community members are often eager to become part of an oil palm plantation. Lacking legal title to their land, deals are often structured so that members of the community acquire 2-3 hectares (508 acres) of land for oil palm cultivation. They typically borrow some $3,000-6,000 (at 30 percent interest per year) from the parent firm for the seedlings, fertilizers, and other supplies. Because oil palm takes 3-4 years to bear fruit, they work as day laborers at $2.50 per day on mature plantations. In the meantime their plot generates no income but requires fertilizers and pesticides, which are purchased from the oil palm company. Once their plantation becomes productive, the average income for a 2 hectare allotment is $682-900 per month. In the past, rubber and wood generated $350-1000 month, according to Curran. The low level of income combined with large start-up costs and relatively high interest payments virtually ensures that small holders will be perpetually indebted to the oil palm company.

Curran said this debt, combined with almost total dependence on entities they barely trust, has a psychological impact on communities. Because there are no ways to contest actions by the company, conflicts invariably arise within communities, especially when a large part of the community (Dayaks often oppose oil palm schemes) has opposed the plantation. At times under-the-table means are used to sway a community. For example, a gift of a motorbike can win over influential community leaders. Once the oil palm firm gets the approval, it may negotiate on a one-on-one basis with each household, eliminating any sort of bargaining power of the greater community.

Surveys by Curran suggest that communities in West Kalimantan are deeply concerned about flooding after the establishment of oil palm plantations. They also worry about loss of forest resources and culture -- older community members don't always like the idea of women and children working on plantations. Oil palm cultivation also makes local people more dependent on agricultural firms since they no longer grow their own food. Finally, some communities have expressed dissatisfaction for working for Malaysians. They would rather be working independently, according to Curran. While they have a litany of complaints, few see other alternatives.

Meanwhile oil palm firms are making a fortune. By Curran's calculations, some firms in West Kalimantan are seeing a 26 percent annual internal rate of return over a 25-year period, an astounding number. Because of booming demand for biofuels, they have little downside risk.

"Firms are making a lot of money without a lot of accountability," said Curran, speaking at Stanford University in January 2007.

For more see Oil Palm




PICTURES OF OIL PALM IN BORNEO  






REFERENCES  


  • Lisa Curran, personal communication
  • WWF Germany, Borneo: Treasure Island at Risk, June 2005 [pdf, 773 KB]
  • mongabay.com


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    Copyright Rhett Butler 2013