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EXPLAINER: Indonesia's forests in danger as ban on new palm oil plantations expires

by Michael Taylor | @MickSTaylor | Thomson Reuters Foundation
Thursday, 30 September 2021 10:22 GMT

FILE PHOTO: An aerial view of an oil palm plantation in Musi Banyuasin Regency, South Sumatra, Indonesia, August 2, 2016, in this photo taken by Antara Foto. Antara Foto/Nova Wahyudi/via REUTERS

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Indonesia, the world's biggest palm oil grower, lets a three-year moratorium on new plantations lapse but says it won't give new permits. Will the move weaken forest protection?

By Michael Taylor

KUALA LUMPUR, Sept 30 (Thomson Reuters Foundation) - Indonesia has pledged not to approve new palm oil permits after a three-year moratorium on new plantations lapsed this month - but environmentalists are worried that forest conservation efforts will be weakened by the move.

Home to the world's third-largest tropical forests and also its biggest palm-oil producer, Indonesia introduced a freeze on issuance of oil palm plantation permits in 2018.

The aim was to prevent forest fires, deforestation and land conflicts, help meet goals to cut planet-heating emissions, boost oversight and accelerate efforts to increase yields. 

Conservationists blame the production of commodities like minerals and palm oil - used in everything from margarine and cereals to soap and fuel - for much of the destruction of forests, as they are cleared for plantations, ranches, farms and mines.

Last week, a senior official in Indonesia's Environment and Forestry Ministry said the government had yet to decide whether to extend the palm plantation ban but was committed to not approving any new permits.

Green groups have greeted the move with some scepticism, pointing to parts of the expired moratorium that focused on cleaning up the often-opaque industry.

"The palm oil moratorium policy was a strong signal from (President Joko) Widodo's administration that they were serious enough to reform the industry and resolve legacy issues," said Andika Putraditama, forests and commodities manager at World Resources Institute (WRI) Indonesia, a think-tank.

Those issues include illegal palm oil plantations and plantations with incomplete or expiring licenses, he added.

Here's why Jakarta's decisions on palm plantations matter to global efforts to protect natural systems and the climate:

What is palm oil and what are its uses?

The oil palm tree originates in West Africa where it grows in the wild at heights of more than 60 feet (18.3 metres).

Oil palms were introduced to Malaysia by the British and Indonesia by the Dutch in the mid-1800s, and were first planted as ornamental trees. Malaysia and Indonesia now account for about 90% of global output.

The trees start bearing fruit about 30 months after planting, and are productive for the next 20 to 30 years.

Palm oil is used in a wide range of food and household products, from biscuits, ice-cream and chocolate spreads to soaps and cosmetics, as well as in biofuels.

India, China, Indonesia and Europe are the main consumers, benefiting from trees that produce four to 10 times more oil than other vegetable oil crops per unit of cultivated land. 

Indonesian leader Widodo has implemented an ambitious biodiesel programme to bolster demand after moves by the European Union to restrict use of palm oil-based biofuels because of concerns over deforestation. 

How have palm oil plantations impacted Southeast Asia's forests?

Across Indonesia and Malaysia, about 4.5 million people earn their living from palm oil production.

The business has helped lift millions of people out of poverty, according to industry officials.

But in many parts of Indonesia and Malaysia, the clearance of land for oil palm cultivation has caused - and is still causing - deforestation, despite pledges by big firms to end it. 

Indonesia, which introduced a moratorium on primary forest clearing in 2011, was named as one of the top four countries for rainforest loss in 2020, according to Global Forest Watch, a satellite monitoring service.

Malaysia, which has lost nearly a fifth of its primary forest since 2001, set a five-year cap on palm oil plantations in 2019 and plans to toughen forest laws by increasing fines and jail terms for illegal logging. 

Why is forest protection so important?

Destroying rainforests has major implications for global goals to curb climate change, as trees absorb about a third of the planet-warming emissions produced worldwide, but release carbon back into the air when they rot or are burned.

Forests also help clean up air and water, support human health, offer flood protection and mitigate heat in cities.

Slash-and-burn practices linked to palm oil production are often blamed for the annual Indonesian forest fires that create a thick haze in skies over large parts of Southeast Asia.

Gemma Tillack, forest policy director at U.S.-based nonprofit Rainforest Action Network, welcomed the recent assurance from Indonesia's government that it will not give out new palm oil permits.

But, she said, a "permanent and strengthened moratorium" would align the country's palm oil production with the sustainability requirements of the global market and consumer expectations.

What are palm oil companies doing to stop deforestation?

Over the last decade, pressure from consumers and green groups has pushed big companies that grow, trade or buy palm oil to tackle labour abuses on plantations and commit to ending deforestation. 

That has led to some major buyers pledging only to buy supplies certified as sustainable. 

Both producers and buyers have also teamed up with green groups on initiatives to monitor and clean up supply chains to root out deforestation, including by investing in tracking technologies.

Other palm oil buyers have switched to using alternative vegetable oils. 

But all those efforts have yet to bear much fruit.

High-profile members of the Consumer Goods Forum (CGF) - many of them household brand names - struggled to meet a 2020 target set a decade earlier to purchase only sustainably produced commodities, including palm oil, soy, beef, paper and pulp.

Last year, they launched the "Forest Positive Coalition of Action", vowing to speed up work to stop key commodity supply chains fuelling forest loss, in a bid to curb climate change.

Another important player is the Roundtable on Sustainable Palm Oil (RSPO), an industry body of consumers, green groups and plantation firms that promotes the use of certified sustainable palm oil products, and is backed by major European buyers.

The watchdog tightened its rules in late 2018, imposing a ban on clearing forests or converting peatland for plantations. 

Pushing a similar agenda, Singapore has set its sights on becoming the world's first country to use only sustainable palm oil under a green push to tackle forest fires and air pollution. 

Are government bans on plantation expansion needed?

Growing corporate and regional efforts to go green make Indonesia's decision not to extend its palm oil plantation moratorium look out of step, green groups say.

The move also came just weeks after Indonesia ended a deal with Norway on cooperation to reduce carbon emissions from deforestation. 

"The stakes are even higher now due to the COVID-19 pandemic where the national and local government needs a good source of revenue, and coincidentally, palm oil prices are now enjoying a significant price increase," said WRI's Putraditama.

Without a ban on plantation permits, the concern is that there will be a proliferation of new licenses, which would harm forests further, he added.

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