The High Price to Pay for Palm Oil Biofuels Conversion

Posted on Apr 13, 2010

The majority of governments on this side of the earth convince that vegetable fuels (biofuels) are a sustainable substitute energy sources for fossil fuels. The argument put forward is always related to the ability of biofuel crops to reduce greenhouse gases emission to the atmosphere. Even the European Commission as well as the Indonesian government issued policies concerning the acceleration of usage conversion of fossil fuels to biofuels.

Workers Harvesting Palm Fruit - Walhi.or.id

Palm oil is one of the largest contributors to the world biofuel production. “The increased in demand for palm oil triggers the increase in crude palm oil prices. This has becomes the main driver of palm oil companies massive expansion in Indonesia, “said Teguh Surya, Walhi campaigners in Jakarta.

In a report jointly prepared by WALHI and Milieudefensie, an environmental NGO in the Netherlands, revealed that biofuel policy is paid handsomely with the forced occupation of indigenous peoples land, farmers and labor repression, environmental destruction, illegal logging and massive law violations.

“We deliberately chose Ketapang in West Kalimantan as the study area, considering that more than 1.4 million hectares of land in the district are allocated to the expansion of palm oil plantations. This puts Ketapang as the largest palm oil districts in Indonesia”, said Claudia Theile, Milieudefensie (Friends of the Earth Netherlands) campaigners

Big international companies such as Sime Darby, Sinar Mas, IOI, Cargill and Genting are massively clearing the forest and harvesting palm oil in Ketapang.

“Almost all companies in Ketapang clear the forest illegally. More than 360,000 hectares of forest have been tagged with oil palm plantations permit, “said Teguh. He urged the government to perform an audit, because the State has the potential loss of Rp 1.3 trillion (USD 1.3 billion) from unpaid forestry taxes.

Detailed analysis of IOI Ketapang subsidiary activities for example reveals further shady practices, such as planting without environmental permits, illegal occupation of forest area, peat land conversion and land disputes with the community.

“In fact we also found strong evidence of false information made by the director of a subsidiary IOI. The director issues a letter stating that they will not operate on the field until the environmental permit are issued. In fact, the West Kalimantan Governor has not issued any environmental permit for IOI subsidiary, while IOI already planted 2.110 hectares of palm oil area”, he said.

Walhi is planning to report these violations to related law enforcement agency.

Both of these environmental NGOs also stressed the Indonesian government to immediately ceased issuing permits for oil palm plantation and take firm action against companies that violate Indonesian law such as IOI. In addition, they also urged the European commission to stop plans to use palm oil as biofuels.

(Walhi Press Release – Teguh Surya)