Lentis/Oil Palm Plantations

A palm oil plantation in Indonesia.

Introduction

Oil palm plantations produce a vegetable oil from oil palms such as the African Elaeis guineensis. Crude palm oil is made from squeezing the fruit of an oil palm while while palm kernel oil comes from crushing the kernel of the fruit. Palm oil may be used in various everyday products including ice cream, packaged bread, margarine, lipstick, soap, laundry detergent, and bio-fuel.

The top three global exporters of palm oil are Indonesia, Malaysia, and the Netherlands. Both Indonesia and Malaysia are home to topical forests, home to diverse ecosystems. Palm oil exports are key components to the nations' economies.

The Roundtable on Sustainable Palm Oil (RSPO) is a group that unites participants in the palm oil industry. The RSPO consists of many participants involved in the palm oil production process, such as oil palm producers, processors, consumer goods manufacturers, retailers, and environmental and social non-governmental organizations (NGOs). One key function of the RSPO is to regulate how oil palm plantations are established and function. In the past, there has been specific focus on regulating and enforcing ethical practices of oil palm plantations in developing countries.

Deforestation

Deforestation in Borneo for Palm Oil Plantations has destroyed major ecosystems.

The popularity of palm oil in the global economy has encouraged the introduction of oil palm plantations in Indonesia and other tropical countries. In turn, mass deforestation has been prevalent in these countries in recent years. For example, 9 million hectares of Indonesian primary forests have been lost from 2002 to 2018.

Orangutan habitats are threatened by deforestation for palm oil plantations.

Deforestation for oil palm plantations destroys the vibrant ecosystems of Southeastern Asia. For example, the forests of Malaysia and Indonesia are home to orangutans, an endangered group of great apes. The main threat to the survival of orangutan populations is the expansion of oil palm plantations in these countries. As forests are cleared out, orangutans lose their homes and food sources. Often, orangutans will be killed as agricultural pests invading these plantations. Wildlife conservation groups like the National Wildlife Federation have pressed the RSPO to expand their conservation efforts to help preserve the endangered species in these regions.

Deforestation has a large impact on the climate as well; Indonesian rainforests rival the Amazon forest in carbon content. Indonesian and Malaysia also contains the world’s large percentage of peat, or decayed organic matter, in their forests. The peat in these forests contain at least 18 times as much carbon than the trees above them, making them key factors to these forests’ carbon pools. Deforestation in these countries risks increasing global carbon emissions. One of the leading concerned groups is the Union of Concerned Scientists, which pushes for stricter regulations of conservation for these forests. In the past, the Union of Concerned Scientists has criticized the RSPO for not strictly protecting the forests of nations like Indonesia. Specifically, policies set by the RSPO protected primary (undisturbed) forests, but not others types like disturbed forests. The criticality of peatlands was also ignored for a long time. In response, in November 2018, the RSPO updated its Sustainability Principles and Criteria to forbid further deforestation or peatland usage.

Regulation alone is not enough to fully curb the effects of deforestation. A 2018 study found that RPSO-compliant plantations did not perform significantly better than non-compliant plantations. Plantations were evaluated based on metrics such as deforestation rates, carbon emissions, and orangutan death rates. While regulations mitigate further environmental damage, many plantations have already damaged forests in Indonesian and Malaysia. The study also claims that regulations for oil palm plantations have not been strictly enforced in the past. The global demand for palm oil will remain high, since palm oil is still used in a wide variety of products. In turn, oil palm plantations will continue to develop throughout tropical areas.

Bio-Fuels

As concerns about the risk of fossil fuels rise, many countries have begun taking steps towards renewable alternatives. The United Nation’s Sustainable Development Goals for 2015 to 2030 commits its members to adopting affordable and clean energy. To this end, many countries in the EU have started using bio-fuels as an alternative fuel source to fossil fuels. Due to palm oil's popularity, it is widely used in these bio-fuels. From 2015 to 2019, nearly half of the EU’s imported palm oil was used for bio-fuel. Studies have found that the environment damage done by encouraging the production of palm oil outweighs the benefits of not using fossil fuels. In response, the EU has motioned to stop subsidizing palm oil imports by 2020 and to phase out its use entirely by 2030. As the demand for palm oil subsides in the EU, the incentive for new palm oil plantations will diminish.

Labor

Palm oil plantation employees in East Sumatra.

The palm oil industry is estimated to be worth 60 billion USD. However, plantations workers may struggle to earn enough to live on, with some only make 2.50 USD per day.

Due to low wages and high target quotas, palm oil harvesters often bring unofficial workers with them to help meet harvest quotas. The employed harvesters bear the costs of paying for their own and the unofficial workers' tools, injuries, and wages. Some of the unofficial workers are the workers' children. The plantations benefit from the child labor without having to employ or be responsible for them. Most of the child workers are teenagers, but some are elementary school aged. Plantation owners try to prevent child labor and shift to blame to plantation workers with warning signs and letters. However, these methods do not work well and the root cause is not addressed. Seasonal workers are paid below minimum wage. Nontransparent wage deductions and unpaid overtime are common. The combination of quotas, wage deductions, low wages, and employees covering their owns costs puts many workers into debt bondage. Plantation workers often have to submit their passports, work permits, and visas to their employers. This prevents workers from being able to legally leave the plantations.

Indofood is a large oil palm plantation company with human rights complaints against it. Their goal is to produce palm oil in a sustainable manner. In 2016, Indofood released a sustainability report. In it, they claimed to be on track for 100% sustainable palm oil by 2020. They also claimed to be on track for all plantations to be RSPO certified by the end of 2019. Baseline occupational health and safety programs should be in place by the end of 2017 with 89% of locations meeting the program standards at the end of 2016. Indofood stated they are dedicated to human and labor rights by working with local labor unions and workers to determine what a fair quota is, paying above the minimum wage, paying seasonal workers fairly, and working to prevent child labor.

The RSPO has made rules that companies must follow in order to have certified sustainable palm oil. The Rainforest Action Network (RAN) works to preserve forests, protect the climate, and uphold human rights in areas with rainforests such as Indonesia. Organisasi Penguatan dan Pengembangan Usaha-usaha Kerakyatan (OPPUK) works to resolve social, political, human rights, and environmental issues in Indonesia. The International Labor Rights Forum (ILRF) works to advance human rights for workers. Together, RAN, OPPUK, and ILRF submitted a complaint to RSPO about Indofood violating workers' human rights. After investigation, Indofood was removed from RSPO.

Nestlé produces secondary goods using palm oil. Nestlé is looking to use sustainable palm oil in order to promote smallholders and human rights. As of 2018, 64% of their palm oil used was sustainable. They are aiming to have 100% sustainable palm oil by 2020. Nestlé is taking action towards this goal. They have cut ties with 10 palm oil producers, including Indofood, who do not meet the sustainability standards. Nestlé cut ties with Indofood due to human rights issues. This happened before Indofood was removed from RSPO, but is due to the some of the same complaints against Indofood. Nestlé is just one example of companies which have stopped sourcing palm oil from unsustainable producers due to human rights issues. Other companies include Musim Mas and PepsiCo.

There are many consumers of secondary goods who wish for them to be palm oil free or to use sustainably sourced palm oil. One way they work towards this goal is with petitions. The petitions are often for specific companies to cut ties with conflict palm oil or for governments to start putting more regulations on products containing palm oil. Some of the petitions have over 100,00 signatures. In addition, some petitions focus on the human rights issues associated with sustainable palm oil.

Displacement

Deforestation for Palm Oil plantations.

Oil palm plantations need space to operate and land acquisition can impact communities. This is an issue in Indonesia. Indonesian indigenous people occupy 40 to 70 million hectares of land while the Indonesian government only recognizes 1 million hectares of that land. As a result, many indigenous people are unaware when oil palm companies buy rights to their land from the government. They are only informed when the companies come to their land and begin using it. Indigenous people protest this practice to try to preserve ownership of their culturally significant land. They believe that these companies are stealing their land and the resources associated with the land.

Guatemala, the 6th top exporter of palm oil, also has instances of displaced communites. Lorenzo Pérez Mendoza, coordinator of the National Council of the Displaced in Guatemala (CONDEG), a non-government organization, has said that "communities are currently suffering a second displacement, which is forced in most cases, provoked by oil palm plantation companies.". This is another instance of oil palm companies coming into a region causing communities to be displaced out of the land they have traditionally owned.

Legacy Colonialism

Indonesia was ruled by the Dutch Empire, from 1815 to the early to mid 1900s, with the goal of making a self-supporting colony. During this time, an island called Sumatra had a large economic expansion due to the adoption of the new and popular plantation economy. Around 70 percent of today's Indonesian oil palm plantations are located on Sumatra, mainly due to the infrastructure that was built under the Dutch rule. The Netherlands, a territory that was part of the Dutch Empire, is the top European importer of palm oil. The Netherlands imports the majority of its palm oil from Indonesia. This relationship between Indonesia and The Netherlands may be a neo-colonialism relationship that is influenced by the Dutch colonialism of Indonesia.

Conclusion

Oil Palm Plantations are a reminder that modern day colonialism exists and is prevalent. Primary good production companies make large profits by extracting resources from countries and paying the workers low wages. In these countries, there are few other options for work, so the people are stuck with the working for the primary good production companies.

While secondary goods producers cut ties with palm oil producers over human rights and sustainability issues, the secondary goods producers may also have been influenced by their consumers. They may have chosen to cut ties with conflict palm oil in order to prevent loss of customers and maintain a good image. This can be extended beyond palm oil. In some cases, companies may use ethics as a manifest function with maintaining customers and keeping a good reputation as latent function.

Oil palm plantation companies have affected indigenous communities. Companies can legally take land that is not recognized by the government from indigenous people. This process ignores the views of indigenous people. This can be viewed as modern day colonialism. Land and resources are being taken which causes the value of the region to decrease.

Regulation is important for curbing negative effects, as is the case for oil palm plantations. However, instead of mitigating the effects, it may be more effective to look at the causes. As EU countries phases out the use of palm oil, the demand of palm oil will decrease. In turn, the creation of new palm oil plantations and the spread of their effects will slow.

Future research on this chapter may include deeper research into the legacy colonialism, the history of palm oil (such as why it became widespread), what properties of palm oil make it useful, labor conditions beyond Indonesia, and potential issues with uses of palm oil aside from bio-fuel.