“Indonesia’s Palm Oil Challenge”
(Tempo January 17-23, 2006)

“This long term potential [of the palm oil sector] also poses a major challenge for the government – how to balance economic potential for palm oil with sustainable, environmentally responsible policies and practices. There are few industries today where Indonesia can rightfully stake a claim for leadership both in terms of potential and execution - the palm oil sector is one but it remains to be seen whether it can rise to this challenge”.

“The planned site [1.8 million hectare plantation project] is located in a heavily forested area within what is characterized as the Heart of Borneo. Ironically, a multi-disciplinary and inter-governmental environmental cooperation between the three countries with a presence on the island of Borneo (i.e Indonesia, Malaysia and Brunei) has been mooted to try and preserve the precious but rapidly dwindling rain forest heritage on the island. This project is also called Heart of Borneo and its proponents and supporters have taken issue with the mega plantation project (in scale roughly three times the size of the island of Bali) that they believe will adversely impact the biodiversity of the region, affect the source and course of the major rivers in the region and raise the specter of indigenous communities being displaced and their traditional lifestyles altered.

The environment groups claim that their reasons for this project to be reconsidered go beyond appeals to save the orangutans, pygmy elephants, “bekantan” monkey, “arwana” fish or hundreds of other species. They claim (and are willing to share scientific studies and research to back their arguments) that the topography of the designated area is also not suited for developing and sustaining such a large palm oil plantation. Equally compelling is the argument that the government must first focus on rehabilitating and developing large tracts of currently abandoned or ‘alang-alang’ land estimated to be over 15 million hectares. This land does not pose environment risks but it is clearly costlier to develop and unattractive to potential investors who see in felled timber an easy upfront cashflow that magnifies the economic attractiveness of plantation projects.

The government would do well to apply Principle 7 of the RSPO criteria, which is classified as ‘Responsible Development of New Plantings’, to this proposed project. This criterion requires that “a comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations”.