Logging kingpin linked to kidnapping, violent assault seeks legitimacy via IPO
(12/11/2013) A businessman whose company kidnapped and violently assaulted environmentalists investigating illegal logging in a national park is set to earn millions of dollars from Thursday's initial public offering of Sawit Sumbermas Sarana, a palm oil company with holdings in Indonesian Borneo. Environmentalists are warning responsible investors to steer clear of the IPO.
Environmentalists call for recognition of orangutan, rhino habitat as heritage site
(12/11/2013) Environmentalists in Indonesia's Aceh Province are calling upon the local governor to nominate the Leuser Ecosystem as a UNESCO World Heritage Site to help protect the area — one of the last places where rhinos, elephants, tigers, and orangutans share the same habitat — from new legislation that would grant large blocks of forest for logging concessions, mining, and industrial plantations.
Top 10 Environmental Stories of 2013
(12/10/2013) 1. Carbon concentrations hit 400ppm while the IPCC sets global carbon budget: For the first time since our appearance on Earth, carbon concentrations in the atmosphere hit 400 parts per million. The last time concentrations were this high for a sustained period was 4-5 million years ago when temperatures were 10 degrees Celsius higher. Meanwhile, in the slow-moving effort to curb carbon emissions, the Intergovernmental Panel on Climate Change (IPCC) crafted a global carbon budget showing that most of the world's fossil fuel reserves must be left untouched if we are to avoid catastrophic climate change.
Palm oil IPO presents environmental, financial risks
(12/10/2013) An Indonesian palm oil company has failed to disclose all the financial and environmental risks to investors ahead of its December 12 initial public offering (IPO), alleges a new report from environmental groups. PT Sawit Sumbermas Sarana (SSMS), a palm oil company that operates plantations in Indonesian Borneo, aims to raise a trillion ($88 million) in this week's IPO.
World's biggest palm oil company makes zero deforestation commitment
(12/05/2013) Wilmar, the world's largest palm oil trader and a long-time target of environmentalists, has signed a landmark policy that commits the company to eliminate deforestation from its supply chain. The deal, if fully implemented, has the potential to transform the palm oil industry, which has emerged over the past decade as one of the world's most important drivers of tropical forest destruction.
Green investors urge companies to clean up palm oil industry
(12/04/2013) A coalition of investors and asset managers is urging stakeholders in the palm oil industry to adopt policies that exclude deforestation and human rights violations from their supply chains. The call, coordinated by Green Century Capital Management, was issued in the form of letters sent to 40 major palm oil producers, financiers and buyers.
Plantations used as cover for destruction of old-growth forests in Myanmar
(12/02/2013) As Wild Burma: Nature's Lost Kingdom airs on the BBC, the forests documented in the series are increasingly being cut down, according to a new report by U.S. NGO Forest Trends. The report alleges that wide swathes of forest are being cleared in ethnic minority areas of Myanmar (also known as Burma), ostensibly for palm oil and rubber plantations. However after the lucrative timber is extracted, the report finds little evidence that the companies involved are serious about establishing plantations.
New project works to raise the profile of the world's littlest bear
(12/02/2013) The world's least-known bear also happens to be the smallest: sun bears (Helarctos malayanus), so called for the yellowish horseshoe mark on its chest, are found across Southeast Asia. But despite their telltale markings, super-long tongues, and endearing cuteness, sun bears remain little-studied and little-known compared to many of the region's other large mammals. Now, a new project is working to raise the profile of the sun bears of Borneo—Survival of the Sun Bears—which are a smaller subspecies of the mainland animals.
Palm oil company Bumitama under fire for clearing rainforest, endangering orangutans
(12/02/2013) Bumitama Agri, an Indonesian palm oil producer, is breaking the law by clearing forests and developing plantations without the proper licenses, a coalition of NGOs said in a report released on Nov. 21. The groups have called on financiers to either force Bumitama to shape up or cut ties with the company and with global palm oil traders such as Wilmar and IOI that do business with Bumitama.
Controversial palm oil project approved in Cameroon rainforest
(11/26/2013) A controversial palm oil project set in the West African rainforest in Cameroon has won a three-year provisional lease to convert 20,000 hectares of land for plantations. The project, which is run by U.S.-based Herakles Farms, has been heavily opposed by environmental groups who say it will destroy blocks of wildlife-rich forest.
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.
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?
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
Lisa Curran, personal communication
WWF Germany, Borneo: Treasure Island at Risk, June 2005 [pdf, 773 KB]