Devastated Lands Displaced Peoples: Agrofuel Costs in Indonesia, Malaysia, Papua New Guinea

Article excerpt

Rapidly increasing demand for palm oil for biodiesel production is causing massive deforestation and displacing millions of indigenous peoples in the South-East Asian region, including Indonesia, Malaysia, Papua New Guinea, India. Destruction of the region's extraordinarily rich biological diversity in exchange for palm oil to fuel automobiles is criminal.

Horrific impacts from the agrofuels push are nowhere more evident than in Southeast Asia's palm oil sector, where deforestation and peatland degradation are so severe they make a mockery of the whole concept of growing plant biomass to mitigate climate change. Indonesia and Malaysia are the world's largest palm oil producers, supplying about 85% of the world market. Historically, palm oil has been used for food and other consumer products and is now the world's leading vegetable oil, surpassing soy oil. It's also now considered to be an efficient biodiesel feedstock, increasingly in demand for heat and energy production, especially in Germany and the Netherlands. Much of Southeast Asia's palm oil is exported to Europe and China.

With rapidly increasing demand for palm oil for biodiesel production, demand is currently outstripping supply, so governments and industry are planning huge expansions throughout Indonesia and Malaysia. By 2006, Malaysia, the world's largest palm oil exporter, responsible for about 45% of global production, had established over 4 million hectares of palm plantation, and is expanding rapidly into Sabah and Sarawak (the Malaysian part of the island of Borneo). Indonesia, in 2004 had about 6.5 million hectares of oil palm plantations in Sumatra and Kalimantan, with potential for significant growth. (1) The country plans a staggering 43-fold expansion in the area dedicated to oil palm, an additional 20 million hectares of plantations, which would bring the country's total to 26 million hectares by 2025. (2)


Plans to develop the Kalimantan Border Oil Palm Mega-Project, for example, would convert an additional 3 million hectares to oil palm in Borneo. In the process, this will "trash the primary forest in three National Parks, cut through rugged slopes and mountains utterly unsuitable for oil palm cultivation and annihilate the customary land rights of the indigenous Dayak communities in the border area." (3)

Palm oil expansion is bolstered by tax breaks, subsidies, domestic targets and massive investments, including the US$5.5 billion deal between Sinar Mas Group (PT Smart) and China National Offshore Oil Corporation (4) and a US$4 billion dollar investment in a refinery and plantations in Sumatra by Raja Garuda Mas. PT Wilmar Bioenergy is developing 150,000 ha of plantations in Riau and East Kalimantan. Many new refineries are under construction and international investment is flowing in from China, Japan, India, Brazil and South Korea. (5) Oil and agribusiness companies are also investing in palm oil, including Shell, Neste Oil, Greenergy International, BioX, Cargill and Archer Daniels Midland. Impacts on people and the environment in Asia's tropical forests are mostly found in Malaysia, Indonesia and Papua New Guinea, covering an area of about 136 million ha, a large proportion of which has already been or is currently being cut. A recent UN report predicted that at current rates, 98% of the forest cover of Borneo and Sumatra will be severely degraded by 2012, and completely gone by 2022. (6)


Illegal logging in Indonesia is out of control with 73-88% of logged timber extracted illegally and government's capacity to control it minimal. Even milling capacity in the country exceeds legal limits by 2 to 5 times and illegal logging has been uncovered in 37 out of 41 of Indonesias national parks (7). Logging is often carried out as a precursor to establishing oil palm plantations. Indonesia had about 6.5 million ha of oil palm plantations by 2006, yet almost three times that area, nearly 18 million acres of rainforest, was destroyed by plantation owners, mainly for access to timber, even where palms were never planted. …