On the Possibility of Sustainable Palm Oil
Palm oil is not good or bad but agricultural production systems make it so
Oil palm (Elaeis guineensis) has been described both as a wonder crop and ‘the Lord Voldemort of the plant world’. It is one of the most rapidly expanding equatorial crops in the world with global cultivation increasing from 3.6 million hectares in 1961 to 28.3 million ha in 2019. Demand continues to grow, but palm oil is also the subject of many negative high-profile consumer campaigns in Europe and North America. What is going on?
The Good
It’s no wonder that demand for palm oil has exploded given that it is highly versatile and efficient. WWF estimates that half of packaged products in supermarkets contain palm oil; from pizza and doughnuts to deodorant, lipsticks and detergents. It makes Nutella creamy and vegan margarines spreadable. It is also used as a biofuel; 46 percent of palm oil imported into the EU in 2015 was for transport, and it currently counts towards EU countries’ renewable energy targets (although it will no longer count after 2030). In many parts of Asia and West Africa it is commonly used in domestic cooking. Palm oil is the most efficient vegetable oil crop as alternative oils such as coconut or soy would require four to ten times as much space.
Palm oil also has positive impacts for producers. Palm oil only grows in tropical regions and has contributed to economic development in the tropics. Whilst Indonesia and Malaysia are currently responsible for 85 percent of palm oil production, production is expanding in countries across Africa and Latin America, especially Nigeria and Colombia. Palm oil production and exports contribute to the economy of low and middle income countries. Palm oil prices increased by 412 percent between 2000 and 2011, making oil palm cultivation highly profitable. In addition to large-scale commercial plantations, smallholder farmers have been keen to participate in the oil palm boom. In Indonesia, where smallholders’ share of production has increased in recent years, smallholders have been found to benefit from higher returns to land and labour, allowing family members to undertake off-farm work.
The Bad
On the other hand, there are significant negative impacts of the widespread production of palm oil. One of the most obvious and pressing problems is that oil palm competes with tropical rainforests for space, but is no match for natural forests in terms of biodiversity or carbon storage. It has been estimated that between 1990 and 2005, between 55 to 59 percent of palm oil expansion took place at the expense of forests in Malaysia. Globally, palm oil is one of the top four commodities driving deforestation, for which 27 percent of global forest loss between 2001 and 2015 can be attributed.
According to The IUCN Red List of Threatened Species, palm oil production is affecting at least 193 threatened species including orangutans and tigers. Greenhouse gas emissions from palm oil production are compounded by the fact that palm oil plantations contributed to 75 percent of peat forest loss in Peninsular Malaysia, Sumatra and Borneo between 2007 and 2015. Peat soils release enormous amounts of carbon into the atmosphere when drained or burned. In 2015, forest fires raged across Indonesia, releasing more carbon dioxide in three weeks than Japan released in a year. Whilst the El Niño climate effect exacerbated the situation, the blazes were largely the result of using fire to clear land for agriculture, as well as the draining of peat swamps, making them more flammable.
In addition to environmental impacts, palm oil also changes the social and economic structures of rural communities. In many areas where palm oil is grown, the land was once controlled through traditional and indigenous governance systems. However, economic development has created conflicts over who should have access to forest resources. Forest land-use related conflicts have been estimated to affect 5–9 percent of the entire Indonesian population. Additionally, the role of palm oil plantations in rural development has been questioned. Amnesty International has reported labour and human rights abuses, including the use of child labour to meet otherwise unattainable quotas and exposure to dangerous chemicals. In Malaysia, the palm oil industry is reliant on migrant workers who are often employed on short-term contracts with limited workers rights.
Certified Sustainable Palm Oil?
There is an urgent need to ensure that existing and future palm oil production is made sustainable; i.e. retaining the benefits and eliminating the environmental, social, or economic damage that has widely occurred. To this end, the Roundtable on Sustainable Palm Oil (RSPO) was founded in 2004 as a multi-stakeholder initiative with the objective of ‘making sustainable palm oil the norm’. The RSPO conceives of its roles as firstly, creating a bottom line of standard practices that would prevent the negative impacts of palm oil, whilst enabling the benefits; secondly, a convener of civil society, government, business, and industry; and lastly, a leader and facilitator for change through mobilising resources for sector transformation.
Certification schemes such as the RSPO face many hurdles, however. The process of getting certified is expensive and is only worth the hassle for exporters to the EU and, to some extent, North America. Currently only 19 percent of global palm oil is certified by the RSPO and most of this area is industrial plantations. RSPO certified smallholders account for 13.8 percent of the total certified area, and only 1.3 percent of the total certified area is managed by those who make their own management decisions (independent smallholders). The RSPO is thus dominated by large-scale producers and buyers of palm oil. On the demand side, there are not enough buyers for certified sustainable palm oil. As a result, 54 percent of certified sustainable palm oil is sold as non-certified palm oil.
What is more, some even question whether the standards are appropriate to protect natural forests. Could a monoculture plantation ever be considered sustainable? Do schemes such as the RSPO encourage more consumption of palm oil by resolving consumers’ environmental guilt, when really we should be cutting back?
On the Possibility of Sustainable Palm Oil
Palm oil is a versatile and highly profitable crop but it has had some devastating impacts on the natural environment and communities when grown in sprawling monoculture plantations. What are the alternatives? Proposed boycotts have been criticized for undermining the livelihoods of producers in developing countries and shifting the problem of land clearance to other less efficient crops. Certification, for instance through RSPO, has had some positive impacts in curbing deforestation and promoting good agricultural practices, but it has limited reach and questionable long term credibility of the standards.
Many of the negative effects described above can be attributed to economic and political structures that prioritise profit over people. Thus, meaningfully promoting sustainable palm oil involves supporting a shift in the power relations between big and small-scale actors.
“Land rights, land reform, small-scale agriculture and significantly higher wages can dovetail with demands for environmental justice and for the protection of remaining rainforests”
In this endeavour, Pye (2019) suggests examining the points of conflicts as a starting point, “Land rights, land reform, small-scale agriculture and significantly higher wages can dovetail with demands for environmental justice and for the protection of remaining rainforests”. Proper wages, for instance, would reduce the amount of capital available for expansion and ensure a better distribution of benefits, resulting in more meaningful local development where palm oil is produced. What is more, small-scale agriculture is often considered a better option for biodiversity, with greater diversity of flora and fauna at landscape-level. With the right support, smallholders can produce just as much palm oil, and sometimes more, as large-scale actors. Rather than simply placing higher demands on producers for the benefit of buyers, sustainable palm oil should be something that actually benefits us all. A truly sustainable approach must tackle social and economic issues to be effective in the long-term.
