PALM OIL
The problem and possible solutions
What is palm oil?

Palm oil is obtained from the fruit of the African
palm oil tree (Elaeis guineensis) (Schuster et al., 2007).
Source: http://www.environmenttimes.co.uk/news_detail.aspx?news_id=910
What is palm oil?

It is the most widely produced edible vegetable oil in the
world (Mukherjee and Analava Mitra, 2009).

In 2008, it accounted for over a third of the 130 million
tonnes of vegetable oil produced globally (WWF, 2010).
Source: http://www.treehugger.com/files/2009/03/seventh-generation-buyssustainable-palm-kernal-oil-credits-for-entire-product-line.php
Productivity and Potential Sustainability

The high photosynthetic rate of the oil palm enables it to
produce between eight to ten times more oil per hectare per
year (ha/yr) than other oil seeds such as rapeseed or soybean.

It has an output-to-input energy ratio of 9:1, compared to 3:1
for other oilseed crops (Basiron, 2007).

It emits eight to ten times more oxygen (O2) and absorbs up
to ten times more CO2 ha/yr than other annual crops grown
in temperate countries.

Palm oil also requires less fertilizer per unit of output than
any other crop (Basiron, 2007).
Economic Advantages
•
In Indonesia palm oil generated $7.9 billion in
exports in 2007, accounting for 13 percent of
agricultural output, second only to rice.
•
In Malaysia in 2008, palm oil exports accounted for
$19.6 billion.
Source: World Bank (2009)
The Disadvantages of Palm Oil

Palm oil production has resulted in mass
deforestation, social upheaval and the near
extinction of several animal species (Tan et
al 2009).

Species that are now endangered include:
The Sumatran tiger (Panthera tigris sumatrae)
The Sumatran Orang-utan (Pongo abelii)
The Bornean Orang-utan (Pongo pygmaeus) (IUCN Red list).
The Sumatran tiger
There are now only
400 to 500 left in
the wild (Shephard &
Magnus 2004)
A critically endangered Sumatran tiger with one paw missing. WWF speculate this was most likely a result of illegal poaching facilitated by
shrinking habitat. Source: Deforestation on Sumatra Island (2010)The Guardian.co.uk.
<http://www.guardian.co.uk/environment/gallery/2009/oct/06/deforestation-sumatra-redd?picture=353069780> accessed 31 May 2010.
The Orang-utans

The Sumatran Orang-utan is listed as critically
endangered on the IUCN Red list.

There are currently around 7,300 occupying 20,552
km² of forest.

The Bornean Orang-utan is listed as endangered on
the IUCN Red list (between 45,000 and 69,000
individuals) living in 86,000 km² of forest.

The Bornean Orang-utan populations have declined by over 50% in the
last 60 years due to agricultural expansion and human induced fires.

The decline of the species is predicted to continue at this rate.
Source: IUCN (2010)

Approximately 1000 Orang-utans die every year due
to habitat degradation, forest fires, illegal logging,
encroachment and mining (Xenophone, 2009).
Source: http://animal.kukuchew.com/category/orangutans/

In 2007, the United Nations Environment Program (UNEP) predicted
that if current trends continue, Orang-utans will be extinct in the wild
within two decades (Nellerman, 2007).
Source: C,Nelleman., L, Miles., B, P, Kaltenborn., M, Virtue. And H, Ahlenius. (Eds.)., ‘The last stand of the orang-utan- State of emergency: Illegal Logging, Fire and palm Oil in Indonesia’s National Parks’ 2007.
United Nations Environment Programme, GRID-Arendal, Norway, www.grida.no.
World Demand

The palm oil industry is driven by the high demand
of the export market.

The world demand for palm oil is expected to
increase from 20.2 million tonnes a year to 40
million tonnes in 2020, representing a 4% annual rate
of increase.
Source: Colchester et al., 2006

In order to meet such a demand, a further three million ha of new
estates must be planted (Sargeant, 2001).

Approximately 1.6 million ha of lowland rainforest in Sumatra and 2.6
million ha in Borneo has already been approved for clearance (Schuster,
2007).
Social Conflict
Impacts include:

reallocation of land and resources

alterations in vegetation and ecosystems

foreign investment and new infrastructure

movement of people and settlements

transformation of local and international trade

influx of government agencies
Source: Colchester (2006)

Companies often force local communities to give up their traditional life
styles, often without compensation (Casson, 2002).

This process is facilitated by regional governments who convince local
people to surrender their land and participate in company activities
(Potter and Lee, 1997).
Climate Change

Approximately 15% of all anthropogenic greenhouse
gas emissions are a result of global deforestation.

Controlled burning releases large amounts of CO2
and is hazardous to both workers and existing
plantations.

Clearing peat land releases considerably more carbon
than rainforest.
Source: Fitzherbert et al. 2008
Bio-fuel

Annual world biodiesel demand by 2050 could be as
much as 277 million tonnes, twice the total vegetable
oil production in 2008 (Fitzherbert et al. 2008).

European countries have promoted the use of palm
oil by investing millions of dollars into national
subsidies towards biodiesel (USA, 2010).
The Sustainable Production of
Palm Oil (SPPO)

The most important aspect of the SPPO is ensuring
rainforests are not cleared for the establishment of
new plantations (Fitzherbert et al. 2008).

Environmentally sound factory waste management
(Sargeant 2001).

A zero-burning policy (Fitzherbert et al. 2008).
Hurdles to Sustainability
•
Palm oil plantations are more often established on
primary forest than on pre-existing cropland (Koh et
al. 2008).
•
This is because companies generate revenue from the
sale of the timber. (Kartodihardjo and Supriono
2000).
•
In the Indonesian part of Borneo alone, there are
eight million ha of Imperata cylindrica grassland and
in the whole country over 25 million ha on which
plantations could easily be established (Koh et al.
2008).
The Round Table on Sustainable
Palm Oil (RSPO)

Established by WWF in 2002.

It is a non-profit, multi-stakeholder organisation that is
comprised of palm oil producers, manufacturers, retailers,
banks, investors and NGOs.

There are now over 500 members from more than 25
countries (Nikoloyuk et al., 2009).

RSPO members account for approximately 35% of the
palm oil produced worldwide (RSPO, 2007).
RSPO Principles and
Criteria
1)
Transparency
2)
Compliance with local, national and international
ratified laws and regulations
3)
Use of best practices by growers and millers
4)
Environmental responsibility
5)
Appropriate work labour practices
6)
Development of new plantings.
Source: RSPO (2007)
RSPO Achievements

In July 2009, 4% or 1.5 million tonnes of the palm
oil produced was RSPO certified (RSPO 2009).

Approximately 250,000 tonnes of palm oil has been
purchased (Unilever, 2010).

By January 2010, RSPO certified plantations were
able to supply 1.76 million tonnes of sustainable
palm oil annually, 13 times the amount imported into
Australia every year (WWF, 2010).
Problems with the RSPO

Some of the criteria are still weak because they lack
operational meaning and are thus difficult to monitor
and audit (Press release, 2009).

Principle 5 and 6, concerning social criteria and the
development of new plantations have been the most
difficult to implement

Lack of marketing (Nikoloyuk, 2009).
The solution?

SUPPLY AND DEMAND

Insist that all makers clearly label Palm Oil on their
products

Pressure manufacturers such as Arnotts, Cadburys,
Nestle to source only sustainable palm oil.

Pressure supermarkets such as Coles, Woolworths to
pressure their suppliers to become certified.

Pressure importers to transport more CSPO into
Australia.
The solution?

KFC, McDonalds and Cadbury Australia have
already taken palm oil out of their products because
of consumer pressure.

Woolworths, Coles, Arnotts, Magnum and Walmart
have committed to sourcing only 100% certified
sustainable palm oil (CSPO) by 2015!

Write to your local politician and insist they make
labelling mandatory. We have the right to chose.

Together, we can make a difference!!
THANKYOU 
References

Basiron, Yusof., ‘Palm oil Production through Sustainable Plantations’
(2007) 109 European Journal of Lipid Science and Technology 289.

Casson, Anne., ‘Which Way Forward? People, Forests, and Policymaking in
Indonesia (2002).

Colchester, Marcus., Jiwan, Norman., Andiko., Sirait Martua., Firdaus,
Asep Yunan., Surambo A., and Pane, Herbert., ‘Promised Land: Palm Oil
and Land Acquisition in Indonesia: Implications for Local Communities
and Indigenous Peoples’ (2006) Forest Peoples Programme, Perkumpulan sawait
Watch, HuMA and the World Agroforestry Centre at 11.

Fitzherbert, Emily., Struebig, Matthew., Morel, Alexandra., Danielsen,
Finn., Brühl, Carsten., Donald, Paul., and Phalan, Ben., ‘How will Oil
Palm Expansion Affect Biodiversity?’ (2008) Trends in Ecology and Evolution
23 (10) pp 538-545.
References

Kartodihardjo, Hariadi and Supriono, Agus., ‘The Impact of Sectoral
Development on Natural Forest Conversion and Degradation: The Case of
Timber and Tree Crop Plantations in Indonesia’ (2000) Occasional Paper
with the Center for International Foresty Research.

Koh, Pin, Lian., & Wilcove, S, David, ‘Cashing in Palm Oil for
Conservation’ (2007) Nature 448 (30)

Mukherjee, Sutapa. and Mitra Analava., ‘Health Effects of Palm Oil’, J
Hum Ecol, 26(3): 197-203 (2009)

Nikoloyuk, Jordan., Tom R, and Reinier de Man, ‘The promise and
limitations of partnered governance: the case of sustainable palm oil’ (2009)
10 (1) Corporate Governance 59; Food Standards Amendment (Truth in
labelling-palm oil) Bill 2009. Explanatory memorandium (circulated by
authority of Senator N Xenophon, Senator B Brown and Senator B Joyce).
References

Potter, Lesely and Lee, Justin., ‘Tree Planting in Indonesia: Trends, Impacts
and Directions’ (1997) Occasional Paper No 18. CIFOR, Bogor, Indonesia at 23.

RSPO Incredibly clever’ (Press Release 29 July 2009).

RSPO Principles and Criteria for Sustainable Palm Oil Production Including
Indicators and Guidance October 2007. (2007). Available at: History and
Development of RSPO P&C (2009) Roundtable on Sustainable Palm Oil
(RSPO) http://www.rspo.eu/index.html >accessed 3 May 2010.

‘Trade in sustainable palm oil has taken off ’ ( Press Release, 30 October
2009)

Unilever Alters Palm Oil Supply Chain After Greenpeace Allegations (2009)
Environmental Leader: Energy & Environment News for Business
<http://www.environmentalleader.com/2009/12/14/unilever-alters-palmoil-supply-chain-after-greenpeace-allegations/>accessed 25 July 2010.
References

United States Department of Agriculture, Foreign Agricultural Service,
Commodity Intelligence Report

Indonesia: Palm Oil Production Prospects Continue to Grow (2007)
http://www.pecad.fas.usda.gov/highlights/2007/12/Indonesia_palmoil/ac
cessed 19 May 2010.

Schuster, Gerd., Smits, Willie., and Ullal Jay., ‘Thinkers of the Jungle: The
Orang-utan Report’ (2007).

Shepherd, C. R. and Magnus, N., Nowhere to hide: The Trade in Sumatran
Tiger (2004) A TRAFFIC Southeast Asia Report.

The World Bank Group’s Framework for Engagement in the Palm Oil
Sector (2010) DRAFT: For consultation.

Palm Oil Buyers Scorecard (2010) WWF For a Living Planet <
http://www.wwf.org.au/ourwork/land/land-clearing-and-palm-oil/WWFPalm-Oil-Scorecard>accessed 25 July 2010.