For the last several years, an annual haze has descended upon parts of Southeast Asia. At its worst, it has created hazardous conditions which have forced the closing of schools and caused lung diseases. The haze is the result of slash and burn agricultural techniques being used to expand palm oil plantations in Indonesia. The haze has caused tension between Indonesia and countries such as Malaysia and Singapore. Far from being a regional problem, however, the haze and its cause have serious consequences for global climate change.
Palm oil is the world’s most ubiquitous vegetable oil, estimated to be in 50 percent of products that the average consumer buys — everything from food to bio-fuel and cosmetics. It’s the most efficient vegetable oil to grow, requiring up to 10 times less land and having a greater output than alternatives such as canola and rapeseed. Over 80 percent of the world’s palm oil comes from Indonesia and Malaysia; in Indonesia, palm oil plantations employ over five million people and comprise over 11 million hectares — an area larger than Iceland.
In the past few years, the palm oil industry has come under increased scrutiny with regards to its sustainability. In order to expand the plantations, vast tracts of rainforest and peatlands were being destroyed. The deforestation was destroying habitats for endangered species such as orangutans. Even more troubling is that Indonesia’s rainforests are home to one of the world’s largest carbon sinks; when the organic matter is set on fire, this carbon is released into the atmosphere, causing the haze. Mainly due to the palm oil industry, Indonesia has become the world’s fifth largest emitter of greenhouse gases. However, in 2014, after international pressure and campaigning by celebrities such as Harrison Ford, the five largest palm oil companies in Indonesia agreed to the Indonesian Palm Oil Pledge (IPOP) which included a “zero deforestation” clause.
The firms who signed the pledge aligned themselves to environmentalist NGOs and began setting aside specific concessions of rainforest for preservation based on their socioeconomic value and carbon stock. They also took initiatives to become certified by the Roundtable on Sustainable Palm Oil (RSPO), something that 20 percent of the world’s palm oil suppliers have now done.
Nonetheless, local governments in Indonesia have punished the IPOP seigneurs for attempting to conserve concessions and have threatened to grant the concessions to their competitors if they aren’t developed. The fact that the decision to adopt sustainable practices was an industry initiative and not a government one has put firms at odds with the authorities. The recently elected government of President Joko Widodo has claimed that efforts to achieve sustainability have put an unfair financial strain on the smallholders who account for 42 percent of the country’s palm oil production; he has also recently asked the IPOP seigneurs to “row back” on their pledges. However if Widodo’s government actually cared about smallholders he wouldn’t be violating a 2013 law that requires the government to distribute quality seeds and train farmers and would start commenting on unreasonable prices imposed on them by middlemen.
The reason Widodo wants to expand the plantations is to meet increased global demand amid falling prices — but the World Bank says that this can be achieved by 2020 through better land and industrial management instead.
The Indonesian palm oil industry has the opportunity to become sustainable and remove its international stigma. But unless the government gets in line and begins supporting sustainable developments instead of attempting to nationalize the industry, things such as the annual haze will continue.