AoK- Ethics and Religion

1. Name: Emilio Solomon
Class period: 1
Date: May 12, 2011
Palm Oil Turmoil
For the past decades, the world has faced many issues. Many of these issues are environmental
and health-related such global warming and water contamination. Even though these issues exist until
now, many people are not taking action. Like global warming, the palm oil plantations in Indonesia are
also a major concern, however, most people in Indonesia are not aware of this issue. Indonesia is the
largest archipelago country in the world. It is made up of approximately 17,000 islands. Indonesia is
also the fourth largest country in terms of population. It produces cash crops such as coffee, tea and
rubber. Besides coffee, tea and rubber, palm oil is also cultivated. Indonesia has devoted 7.3 million
hectares of land for palm oil plantation development. Indonesia wants to expand the area with 20
million hectares (“Losing Ground”). Despite the economic and social benefits, the Indonesian
government should not increase the number of palm oil plantations because of the social, economic,
and environmental damages that they are causing.
The Indonesian government claims that the palm oil plantations bring many economic benefits
towards the country. Most palm oil comes from Indonesia. Eighty percent of the world’s total palm oil
production comes from Indonesia and Malaysia (“Green Palm oil”). As one of the world’s largest
palm exporter, Indonesia believes that palm oil promotes gain in money. For example, Astro Agra is
one company that gains profit from palm oil plantations. The company’s net profit increased to 827.05
billion rupiah ($89.65 million), compared with 268.85 billion a year ago, while revenue more than
doubled to 2.27 trillion rupiah (“Indonesia’s Astra Agro”). Money of course is being made (“Losing
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2. Ground”). The palm oil industry benefits from companies that use palm oil in their products as well.
Companies such as Unilever, Nestle, and Cargill use palm oil in many of their products (“Palm Oil in
Indonesia”). A few examples of products include Dove soap and Ben & Jerry’s ice cream. Unilever,
which uses palm oil in such products as Dove soap and Ben & Jerry ice cream, cancelled its annual 20
million pound ($30.27 million) contract with one of its Indonesian suppliers, PT SMART (SMAR.JK)
in December (“Unilever Unit”). Nonetheless, palm oil has been Indonesia’s most significant
agricultural export for the past decade (“The Economic Benefit”). Not only is the palm oil industry
important to Indonesia’s economy, but also it is also important to rural development in Indonesia.
Many Indonesians are currently living below the poverty line. In 2009, 20.6 million of 32.5 million
Indonesians living below the national poverty line were located in rural areas (“The Economic
Benefit”). On the other hand, the palm oil industry also contributes to local economies and small
landholders in Indonesia. The palm oil industry provides employment to many small landholders. In
2006, it was found that around 1.7 to 2 million people worked in the palm oil industry (“The Economic
Benefit”).
Even though palm oil plantations bring economic benefits towards Indonesia, nevertheless, it
creates economic problems. Indonesia’s palm oil firms have had disputes with several international
non-governmental organizations (NGOs) and European multinational companies (MNCs), with
regards to the sustainability policy(“Green palm oil”). The Netherlands, one of the largest exporters
and importers of palm oil in Europe feels that Indonesian palm oil exports can be negatively impacted,
if Indonesia does not review its sustainability policy (“Green palm oil”). Indonesia wants to expand
the area of palm oil plantations for further development. The total area of palm oil plantations are
expected to triple to 16.5 million hectares by 2020 (“The oil for ape”). While the total area is expected
to triple to 16.5 million, it is also expected that palm oil plantations will increase in several different
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3. areas.1.8 million more hectares will be allocated for palm oil plantations in a project (“Palm Oil In
Indonesia”). Not only is the expansion of palm oil plantations a problem, but also the use of palm oil
itself. The palm oil industry is vulnerable to single crop commodity increases (“Losing
Ground”).Indonesia is relying on palm oil, whilst palm oil prices are increasing. Economic studies
emphasize how it is not reliable. Economic studies and the experience of those on the ground suggest
that many communities can be better off growing other crops or a variety of crops (“Losing Ground”).
Palm oil workers argue that palm oil plantations promote social advantages. One social
advantage includes the Roundtable on Sustainable Palm Oil certification scheme. The Roundtable on
Sustainable Palm Oil (RSPO) certification aims to promote social welfare to the indigenous people.
“These smallholders need to be educated, guided, encouraged and inspired to adopt sustainable
standards and solutions, rather than have their livelihoods affected. RSPO certification program aims
to support smallholders in this light” (“RSPO: labeling palm oil”). Also, palm oil workers believe that
the development of palm oil plantations provide better road access. For example, Borneo is one area
where roads are developed. The opening up of new roads plays an important role in the change of
Borneo. Immigrant settlers, hunters and land speculators can access new areas of opportunities through
the roads (“The Heart of Borneo”). Furthermore, palm oil workers have a reliable income. The number
of cattle had doubled, area harvested for workers have increased from 10 to 15 hectares, and the
workers income had proportionately increased by 2003 (“The Economic Benefit”).
While it is true that there are social advantages for palm oil workers, however, there are social
disadvantages as well. The palm oil industry is the most conflict-ridden sector in Indonesia because of
the social conflict and human rights abuse caused by the increase of palm oil plantations (“The oil for
ape scandal”). The development of palm oil plantations has caused problems among villages, where
villagers cannot harvest food. Without land, villagers are not able to harvest food and products, and
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4. thus, gain money (“Losing Ground”).The number of homes is also limited, since houses are destroyed
for palm oil plantation use. The cost of living increases for villagers. Many are unhappy with the
development of plantations on their lands. Traditional land rights are not supported because of
documentation problems (“The oil for ape scandal”). Indigenous people do not have the land rights;
they have to be displaced from their homes. For example in Aceh, 360,000 people were displaced and
70 people died as a result of floods (“Losing Ground”). Indigenous people who are forced to move
away from their homes lose their traditional values and customs. As a result, the indigenous have to
face life changes. The traditions and rituals, which were part of farming practice in the forest, are no
longer held (“Losing Ground”). Besides the loss of traditions, language is also being forgotten.
Language and customs are being forgotten (“Losing Ground”). Indigenous people have been involved
in land disputes, because these people are trying to gain back their land. In several parts of Indonesia,
existing palm oil plantations have little regards for indigenous people’s rights. Many people have been
killed in land-tenure disputes (“The oil for ape scandal”). The palm oil plantation in Indonesia reflects
social discrimination in a serious, massive, and persistent pattern. The government believes that palm
oil is an important factor in Indonesia’s economy; however, environmentalists argue that forests and
indigenous communities are not given enough care (“Palm Oil In Indonesia”). On the other hand, palm
oil workers are also affected as well. Palm oil workers in fact, are not receiving a reliable income.
While the minimum wage is set at Rp 965,000 (USD 96), palm oil workers are paid around Rp
700,000 (USD 70) per month (“What’s wrong with Indonesian”).
More importantly, palm oil plantations destroy the environment. One of the major contributors
to forest destruction are the palm oil plantations (“Losing Ground”). On the other hand, orangutans are
also affected by the increase of palm oil plantations. Deforestation is harmful towards biodiversity and
species such as the Sumatran tigers or Orangutan (“Losing Ground”). More orangutans are dying.
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5. More than 5.5 million hectares of orangutan habitats declined in 1992 to 2003 (“The oil for ape”). The
orangutan habitats are preferentially converted to palm oil plantations. These habitats include low
lands, freshwater, and peat-swamp forests (“The oil for ape”).Not only does the formation of low lands
and peat swamp forests kill orangutans, but it also produces green house gas emissions.
Environmentalists argued that the peat lands carry up to 37.8 tons of carbon dioxide (Murray).With the
amount of carbon dioxide, environmentalists fear that draining the land would lead to huge increases in
emissions. Furthermore, pollution is another environmental problem caused by palm oil plantations. If
not managed well, palm oil plantations can cause serious pollution problems (“Losing Ground”). The
palm oil industry in Indonesia has cooperated with various companies around the world, including
Wilmar, the world’s biggest trader in palm oil. However Wilmar, the world’s biggest trader in oil
without consultation, is responsible for the destruction of land, forest fires and logs (“Palm Oil In
Indonesia”). Environmental campaigners believe that extensive land clearing destroys ecosystems.
Environmental campaigners want a global ban on palm oil plantations (Murray).
Palm oil plantations promote economic and social benefits, however, palm oil plantations can
lead to an economic, social, and environmental impact in Indonesia. Even though palm oil plantations
bring economic and social benefits, nevertheless, palm oil plantations create economic and social
problems. Thus, palm oil plantations cause extreme harm to the environment. Indonesia is considered
the fourth largest country in the world in terms of population. If the population continues to grow
rapidly, many people will not have homes because most of the land in Indonesia will be used for palm
oil plantations.
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6. Works Cited
Andriani, Rubeta. “Environmental and Social Impacts from Palm.” dlib.indiana.edu. N.p.
N.d. Web. 21 May 2011
“The Economic Benefit of Palm Oil to Indonesia.” Worldgrowth.org. World Growth.
Feb. 2011. Web. 21 May 2011.
“Green palm oil and Indonesia Inc. 2015.” Thejakartapost.com. The Jakarta Post.
19 April 2011. Web. 25 April 2011.
“Losing Ground” foe.co.uk. Friends of the Earth. Feb. 2008. Web. 28 April 2011.
Murray, James. “Indonesia Lifts Ban on Palm Oil Plantations.” BusinessGreen
SustainableThinking. Incisive Media Investments Limited, 19 Feb. 2009.
Web.25 April 2011.
“The Oil for Ape Scandal.” foe.co.uk. Friends of the Earth. Sep. 2005. Web. 28 April 2011.
“Palm Oil In Indonesia: Unsustainable Development.” Intercontinentalcry.org.
Intercontinental City. 14 July 2007. Web. 25 April 2011.
“RSPO: Labeling Palm Oil” Mongabay.com. Environmental News. 21 April 2011. Web.
22 May 2011
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7. “What’s Wrong With Indonesian” Jakartaupdates.com. Jakarta Updates. 6 April 2010.
Web. 22 May 2011
“The Unilever Unit Says Indonesia.” Reuters.com. Reuters. 5 May 2010. Web.
21 May 2011.
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