Palm oil industry needs a sustainable change

Palm oil industry needs a sustainable change

By Amantha Perera

They will expand until they throw us into the ocean, Mina Setra, undersecretary general of the Alliance of Indigenous Peoples of the Archipelago, ventured, who has been fighting for four years to prevent her ancestral way of life from being overwhelmed by monoculture.

According to her, the oil production business, coveted all over the world, must adhere to the principles of sustainability. With its current growth, the industry threatens to undermine local economies, indigenous communities, and Indonesia's delicate biodiversity.

Palm oil consumption has risen steadily at a rate of seven percent per year over the past 20 years, according to data from a report published by Dublin-based consultancy Research and Markets.

Globally, more people consume palm oil than soy, and Indonesia is the largest producer, reaching 31 million tons in 2014. This country and Malaysia accounted for 85 percent of the total production that same year.

Although production is expected to decline this year, the industry continues to grow and swallow millions of hectares of forests for palm cultivation.

The Indonesian government and businessmen insist that the sector generates employment and benefits local communities, but many people like Setra disagree because the production model is not sustainable and wreaks havoc on the environment and the indigenous population. , between 50 and 70 million people in this country of 249 million inhabitants.

Breaking the myth of equality and job creation

A study by the Washington-based Rights and Resources Initiative (RRI) found that the main beneficiaries of the oil palm industry are large investors and companies that control 80 percent of the trade.

The sector added little real value to the Indonesian economy. The crop's average contribution to gross domestic product was only 2.2 percent that yearsays the report.

Food production is the main source of employment and income in the countryside, and accounts for two-third of the rural workforce or some 61 million people. Oil palm production only ranks eighth in rural employment, with 1.4 million people, clarifies.

About half of those working in the sector are small farmers, earning higher wages than their counterparts employed by palm oil companies (about $ 75 per month for the former, compared to $ 57 for the latter).

The industry recorded a 15 percent drop in profits in 2014, although this year they are expected to rise with prices between $ 500 and $ 600 a ton. But many producers in Indonesia and Malaysia are openly advocating lower wages to keep profits high.

Specialists argue that the sector does not redirect profits to local communities due to the model of devouring land and resorting to a patronage system.

The patronage system serves as the basic structure for the production, marketing and distribution of palm oilexplains the RRI report.

Connects significant players to facilitate their business through legitimate mechanisms, such as palm oil consortia, which often consist of powerful local personalities, bureaucrats and influential businessmen with close ties to national authorities, concludes.

Activists like Setra also argue that entrepreneurs are adept at exploiting loopholes in order to keep expanding their crops.

The Indonesian government imposed a moratorium on land clearing, an attempt to calm scientists, Western countries and citizens concerned about the engulfment of forests at the behest of monoculture.

But the ban only applies to new licenses, not existing ones, allowing companies with long-standing permits to violate the law without question.

Unfair and unworkable

The structure of the industry is such that it leaves out local communitiesexplained Bryson Ogden, RRI's private sector analyst.

The biggest losers were local residents who lost their land and livelihoods and did not enter the new economy on advantageous terms, highlights the RRI report.

Indigenous people, subsistence farmers and women are the most vulnerable groups, as well as small farmers who own their own land with oil palm, Add.

When the local population tries to defend their rights, the campaigns end in the alienation of the entire community or, worse, the criminalization of their activities.

People who have depended on the land to survive for generations become criminals because they want to preserve their way of lifeSetra lamented.

According to her, as long as there is a global demand for oil without an international campaign that denounces the impact that production has on the local population, companies will probably not change their way of operating.

Others argue that the problem is a lack of data.

Scott Poynton, founder of The Forest Trust, told IPS that there is no adequate information on the socio-economic consequences of the operations.

Concern about deforestation, in Indonesia and elsewhere, stems from the tireless work of dedicated non-governmental organizations, as well as easy-to-use tools like Global Forest Watch from the World Resource Institute, a mapping system that allows people to quickly and cheaply identify deforestation.

Similar resources should be available to people like Setra, he opined, leaders of local organizations who can monitor and report on the social degradation caused by the palm oil sector.

With the forthcoming approval of the Sustainable Development Goals (SDGs), the United Nations, Indonesia and the palm oil sector will be obliged to consider the unviable nature of the monoculture model and move towards a more inclusive practice.

One of the main topics of the knowledge platform on the SDGs is the premise of sustainable production and consumption, defined as the use of services and related products, which respond to basic needs and allow a better quality of life, by time that minimize the use of natural resources so as not to endanger the needs of future generations.

According to the World Wildlife Fund, over the past three and a half decades, Indonesia and Malaysia together lost 3.5 million hectares of forest to oil palm plantations.

Statistics like that suggest that only drastic changes can put indigenous populations at the center of the debate and build a sustainable future for palm oil production.

IPS News

Video: How the palm oil industry can help reduce deforestation (June 2021).