Several years ago, energy reformers were sure that a “biofuel revolution” would be a key to stabilizing global climate while providing abundant, renewable energy. Along with corn, soybeans, and sugarcane, palm oil was supposed to be one of the main ingredients in the world’s shift to biofuels. The plans for palm oil biofuel were great news to Malaysian and Indonesian agribusinesses, which together produce 83 percent of the world’s palm oil, much of it from the island of Borneo. Palm oil conglomerates rushed to apply for permits to build biodiesel refineries and establish plantations to feed them.
J. Mayer, Borneo Project
But now palm oil promoters are on the defensive. Palm oil may be pricing itself out of the market as demand for renewable energy grows. At the same time, a growing chorus of conservation organizations, Indigenous people’s communities, and labor rights groups are pointing out the social and environmental impacts of increased palm oil production. They warn that palm oil plantations in Borneo — in the East Malaysian states of Sarawak and Sabah and the four Indonesian provinces of Kalimantan — recklessly destroy the island’s rainforests and wetlands, undermine community livelihoods and land rights, and will increase greenhouse gas emissions, not reduce them. Bulldozing forests and peat lands, it turns out, is no way to produce a “green fuel” to reduce global warming.
Since 1984, the area of Borneo planted in oil palm has increased ten-fold, and today covers some 4.2 million acres in Sarawak and Sabah and 3.2 million acres in Kalimantan. The Malaysian and Indonesian governments each plan to set aside about 6.6 million tons of crude palm oil (CPO) per year for biodiesel — about 40 percent of each country’s current CPO production. This would mean that about one-third of all palm oil worldwide will go toward biofuels. Much of it will come from new plantations in Borneo.
Deddy Ratih of the environmental group WALHI in South Kalimantan says that the Indonesian government’s plans to substitute biofuels for some of its domestic energy consumption will require almost 2 million acres of plantation land. Some of this area is currently agroforestry or farming land managed by small landholders; other parts are rainforest and peat wetlands. Ratih says that promoting palm oil diesel for domestic use “will threaten South Kalimantan’s forests, and the land which local people use for their livelihoods. The area now intended for yet more oil palm plantations is not abandoned or unproductive agricultural land … but rice fields, community plantations, and other village-based enterprises.”
Cutting down a rainforest to establish an oil palm plantation reduces the jungle’s role as a sink for CO2, releasing into the atmosphere carbon that was stored in vegetation and soils. Burning peat lands to make way for plantations is even worse, since the destruction of the peat releases greenhouse gases that have been locked in the soil for millennia. Plantation expansion for palm oil biodiesel could release up to 30 times more CO2 than the petro-diesel it is intended to replace over a 25-year oil palm life cycle, according to research led by German scientist Florian Siegert. Even without burning, palm biodiesel from peat lands could release some 20 times more CO2, as the drained peat oxidizes. A study commissioned by the Netherlands-based Wetlands International estimates overall greenhouse gas emissions to be lower: Intensive palm plantations will release 10 times more CO2 than using equivalent petro-diesel, according to that research.
Even in a “best case” scenario — in which biodiesel from “no burn” plantations replaces grassland or secondary forests — palm oil fuel would still release more greenhouse gas than using petro-diesel. Whether from peat lands or elsewhere, palm oil biodiesel is hardly a “carbon neutral” energy source. Its increased use is likely to fuel global warming, not reduce it.
Governments across Borneo extol palm oil as the backbone of regional development and a strategy for combating rural poverty. In 2006, Sarawak’s Ministry of Land Development declared: “Rural communities must not be left out of the mainstream of development…Landowners who are not prepared to change will be left behind; those who are left behind will remain poor forever. Large-scale plantation development is the most logical and perhaps the best option to bring them out of poverty.”
Local communities living in the Borneo forests aren’t so sure. Indigenous communities have occupied much of the island for generations, and regulate resource use and property rights through local customary law (adat). For many communities, the plantation boom sacrifices not only their land, but their way of life. “The wealth of Indigenous communities lies not in money or commodities, but in community, tradition, and a sense of belonging to a special place,” says Mutang Urud, a Kelabit community leader in Sarawak.
Palm oil companies gain control of vast expanses of land using a variety of tactics. Land laws in Indonesia and East Malaysia classify much of Borneo’s rainforest, former forest, and wetlands as state land, which the government may designate for plantation development by private and state-owned companies. (Human rights groups have contested these constitutional interpretations.) Governments have used a plethora of initiatives to convince Indigenous communities to provide land and labor to grow oil palm, and give them a stake in plantation success. “Smallholder” schemes attached to plantation concessions promise to share profits (and risks) with communities that release land to plantations. Indigenous farmers and migrants who join these arrangements face new lives as low-wage laborers and contract growers. Saddled with debt or compelled by contract, these “captive” growers sell their palm fruit to the company mills at low prices. Companies undermine local communities’ bargaining power by recruiting migrant labor, drawing Kalimantan youth across the border to Malaysia and attracting migrants from Indonesia’s heavily populated other islands.
In Ketapang, West Kalimantan, Malaysia’s Golden Hope (which recently merged with Sime Darby and Bakrie to form the world’s largest palm oil company) has developed or taken over a huge complex of oil palm plantations since the 1990s. Golden Hope cultivates a corporate image as the industry’s exemplary actor, pioneering “zero burning” to clear land, and leading the Roundtable on Sustainable Palm Oil (RSPO), which intends to begin certifying environmentally and socially sustainable palm oil products later this year. But according to a 2007 Oxfam report, farmers who provided land to Golden Hope under a smallholders’ scheme protested that they were given far less mature oil palm land than had been promised, and that previous landowners claimed even these plots.
Villagers in East Kalimantan complain that companies add insult to injury by using plantation permits to clear-cut vast forests, but delay planting oil palm for years, or never plant it at all. When villagers return to farm their traditional lands, the companies accuse them of illegal occupation, blaming them for spreading fire with shifting cultivation. “Actually, the company burns after it takes out all the good logs. Maybe it plants, maybe not,” says Adi Wahea Dayak, whose community agreed to join the plantation scheme that took over its land. “This is theft, not development.”
Not surprisingly, displacement has led to anger and protests. Environmental and community rights advocacy groups count hundreds of conflicts arising when palm oil companies renege on promises to communities whose land they use, destroy forests and croplands beyond permitted boundaries, pollute or divert community water supplies, or fail to pay workers or contract growers. In Indonesia, Sawit Watch — which monitors the palm oil industry — has identified more than 400 communities involved in conflicts with some 100 companies. In Sarawak, the handful of lawyers defending communities’ native customary land rights have filed more than 40 lawsuits involving oil palm. Some lawsuits demand compensation; most ask for a return of the land.
Baru Bian, a Sarawak land rights attorney, is frustrated that most native land rights cases are stalled in a politically motivated court backlog. Bian is especially angry because when cases do go to trial, the courts often uphold communities’ customary land rights and rule against the palm plantations and timber companies.
Sarawak attorney Harrison Ngau, a former member of the Malaysian Parliament and a Goldman Prize winner, has won several cases on behalf of displaced communities. Last year he successfully won a court case for a community in Sungai Bong whose land had been illegally cleared by a plantation company. The court revoked the plantation leases for some of the contested land that hadn’t yet been razed, and awarded compensation for the illegally cleared land. “Authorities responded by arresting us and charging our people in courts,” says Rayong Anak Lapik, former head of Rumah Rayong, one of the plaintiff communities. “But we never gave up.”
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