Oil palm cultivation has been a boon to the economies of Malaysia and Indonesia. The two countries now account for 85% of palm oil production in the world. More than a 10th of Indonesia’s export earnings come from the sale of palm oil to the tune of some $5.7 billion a year. In addition to boosting their economies, the palm oil industry has created plenty of jobs in the two nations, although most of those jobs are low-skilled and badly paid ones.
That’s the good news. The bad news is that oil palm cultivation has wreaked havoc with the natural environment, especially on the islands of Borneo and Sumatra, both of which are famed for their biodiversity. Vast tracks of forest cover in once richly forested areas have been lost while endemic species like orangutans have been driven to the edge of extinction. Continued deforestation poses even graver threats to wildlife on the islands.
To make matters worse, the oil palm plant itself isn’t indigenous to Southeast Asia. It was brought over from Africa decades ago for local cultivation, which has since spiraled out of control, fueled by greed and convenience as the plant is easy to cultivate.
According to the Malaysian Palm Oil Council (MPOC), the country accounts for 39% of world palm oil production and 44% of world exports, which makes Malaysia one of the biggest producers and exporters of palm oil and palm oil products.
Palm oil is a versatile vegetable oil that is in high demand worldwide because it can be used in the production of everything from margarine to shampoos to biofuel. The industry set up a self-regulating body in 2004 called the Roundtable for Sustainable Palm Oil and claims to be engaged in sustainable practices. Yet the industry-monitoring group has come in for criticism from environmentalists for failing to uphold standards.
Nor do the two countries’ governments, aided and abetted by the palm oil industry lobby, seem to have the interests of the countries’ environments truly at heart. Last year France’s Minister of Environment Nicholas Hulot announced that the European nation will move towards restricting the use of palm oil in biofuels so as to try and lessen demand for palm oil, sourced from countries like Indonesia and Malaysia. Malaysia’s response was a threat to cut down on buying French products in retaliation.
The European Union soon followed suit by approving a new energy plan for the 28-member economic zone that included a ban on the use of palm oil in motor fuels on the continent from 2021 onwards. Malaysian and Indonesian palm oil producers and their allies in government were predictably unhappy at the decision. One Malaysian minister went so far as to decry the move as “crop apartheid” earlier this year.
Yet unless the two countries change course by reining in their palm oil industries in favor of alternative, more environmentally sustainable sources of revenue, their natural environments are bound to suffer even more. Wetlands International has warned that palm oil plantations were encroaching on virgin forests in the Bornean state of Sarawak to such an extent that all those forests might disappear within a few short years. In just five years between 2005 and 2010, almost 353,000 hectares of peat swamp forests were cleared to make way for plantations. That loss accounted for a third of Malaysia’s total amount of such forest cover.
Deforestation has continued apace ever since far and wide in Borneo and Sumatra. To make matters worse, forests are often cleared through slash and burn cultivation in a scorched earth practice that devastates local ecosystems. Fires often get out of hand, destroying large areas of forest and releasing vast amounts of toxic pollutants into the air, which can then linger for weeks and months in the form of a noxious haze that reaches as far as Singapore and Kuala Lumpur.
Often, timber companies and oil palm cultivators work hand in hand. “As the timber resource has been depleted, the timber companies are now engaging in the oil palm business, completing the annihilation of Sarawak’s peat swamp forests,” observes Marcel Silvius, a senior scientist at Wetlands International.
Albeit government officials and industry players deny or downplay such dire forecasts, there’s no denying that the cultivation of palm oil on a mass scale has been disastrous for Malaysia’s and Indonesia’s environments over the past four decades.
Balancing the two countries’ economic interests and their environmental ones requires forethought, careful planning and rigorously enforced standards. Most of these have been lacking. This must change. Once the remaining forests on Borneo and Sumatra are gone, having been replaced by palm oil plantations, they will be gone forever. And with them their irreplaceable ecosystems will be gone too.
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