BLOG: Does palm oil really bring development? New study casts doubt

Oil palms, Indonesia
Oil palms, Indonesia

BLOG: Does palm oil really bring development? New study casts doubt

Opinion piece by Marcus Colchester, May 2019

Much global criticism of oil palm plantations has focused on the environmental impacts – deforestation, biodiversity loss, peat-swamp drainage, destruction of waterways and pollution, and local extinction of the iconic orang utan. Proponents answer these well substantiated concerns by arguing that palm oil brings development and alleviates poverty.

A new study by an impressively diverse, international group of academics casts doubt on these proponents’ assertions. The study was based on a methodical interpretation of the regular surveys compiled by the Indonesian government’s Bureau of Statistics in 6,600 villages in Indonesian Borneo between 2000 and 2014. It finds that on average remote forested villages - about two thirds of those surveyed - where communities had previously relied on ‘subsistence-based livelihoods’, experience a substantial reduction in their basic, physical and financial well-being as well as reduced social and environmental well-being after oil palm was introduced. In other words, palm oil development is making them less well off.  

According to the study, even in the other villages, which have had a greater prior experience of the cash economy, the outcomes are not very good. Oil palm development is causing ‘unsustainable livelihoods’, increasing wealth disparities, while ‘burdening communities with socio-economic and environmental costs’. Most benefits go to a small number of urban and rural elites.   

The study concludes that these harmful impacts result from the rushed development process and it argues for an alternative approach built on communities’ skills and strengths, which takes account of the local context.

These important findings back up what groups like Forest Peoples Programme and our many partners in Borneo have been arguing for years. When development is imposed without respect for forest peoples’ rights and local decision-making, then it tends to benefit those imposing the schemes rather than those in whose name it is being imposed.

The study also concurs with the findings of the multi-million dollar set of studies carried out by academics convened by the ‘Sustainable Palm Oil Manifesto’ (SPOM) group which published a 15 volume report in 2015. The team leaders of the SPOM studies concluded that there is no direct correlation between palm oil expansion and improved welfare. In some instances, like the FELDA schemes in Peninsula Malaysia in the 1970s, there have been local gains. In other cases, as in Liberia and Borneo, communities have experienced obvious losses. The question then is not: ‘does oil palm bring development or not?’, but rather ‘under what conditions can oil palm bring economic, social and environmental gains?’

Indeed, this is the rationale of palm oil certification standards, such as those pioneered by the Palm Oil Innovation Group and now built into the recently improved standard of the Roundtable on Sustainable Palm Oil. These schemes are designed to promote a more bottom-up development process based on respect for rights. That is why – in line with international human rights norms - they require that all their members respect communities’ customary right to their lands – even where the government may not. They require that no development goes ahead on these peoples’ lands without their ‘Free, Prior and Informed Consent’, workers rights are respected in line with the ILO’s core conventions and smallholders are assured fair prices and deals for supplying company mills with fruits. The standards also prohibit deforestation and require that areas are set-aside and maintained to secure high conservation values and local food security.

Unfortunately, the Indonesian and Malaysian governments seem reluctant to engage with these more nuanced approaches. According to the Jakarta Post, at the meeting of China’s ‘Belt and Road Forum’ held in Beijing last week, Indonesian Vice President Jusuf Kalla once more inveighed against the European Union’s decision to phase out the use of palm oil as a biofuel, as ‘discrimination’. Instead of responding to the EU’s concerns about the crop’s impacts on the environment, climate and society, he claimed that oil palm is helping Indonesia meet the UN’s Sustainable Development Goals. Mohon maaf (sorry!), but not if you continue ‘business as usual’ and ignore your own government’s statistics, Mr Kalla.