Farmer Dahlan plants a symbolic first palm oil tree on previously degraded land. © Greenpeace / John Novis

17/08/2012 (Mongabay.com) - Palm oil production need not come at the expense of the environment, says Greenpeace in a new campaign that highlights a smallholder approach used by a community in Riau Province on the island of Sumatra.

The campaign — noted in July on Mongabay-Indonesia — looks at the village of Dosan, which manages an oil palm plantation and has committed to not expanding into forest areas. According to Greenpeace, the Dosan community is "moving to improved environmental management practices that include zero burning, no herbicide use and improved water management." At the same time the community has boosted yields through better management practices.

Greenpeace says the developments are helping Dosan maintain the health of a nearby peatland area. Generally peat forests are drained for oil palm plantations, releasing carbon and increasing the vulnerability of the area to fire.

Dhalan, a community leader, said protecting the forest is important for Dosan.

"In Dosan Village, forests have always been part of our life. From the start of our community palm oil program, everyone takes part of the work and everyone has been part of the benefits," he was quoted as saying. "We made it a village law not to expand plantations further. If we can keep it that way, I am sure the Sumatran forests can be saved."

Greenpeace says Dosan could be a model for small-holders in other parts of Indonesia. But small-holders represent only a fraction of plantation acreage and palm oil production in Indonesia. Most oil palm estates are company-owned or state-controlled. For those, Greenpeace points to Golden Agri Resources (GAR) as a potential model.

Oil palm workers build a dam at the Dosan palm plantation. Dams help maintain
the water table, keeping peat soils moist and their carbon in the ground. Peat
forests are often targeted by palm oil developers because they are easier to
secure than other forest areas. © Greenpeace / John Novis 

GAR, which is controlled by the Sinar Mas group of companies and owns palm oil producer PT SMART, was targeted by Greenpeace in 2008 for clearing of forests and peatlands. GAR eventually entered into an agreement with The Forest Trust (TFT), an NGO, to to spare forests and peatlands that have more than 35 tons of carbon per hectare. The agreement also binds PT SMART to conservation high conservation value forests and free, prior informed consent in working with communities living in and around oil palm concessions.

GAR's commitment immediately shifted it from a pariah to a leader in the eyes of some environmentalists. Subsequent analysis of GAR's plantations by Greenomics, an independent NGO, has shown the company to be mostly abiding by its forest policy.

Greenpeace has targeted the palm oil industry for its role in deforestation in Indonesia. The conversion of vast tracts of rainforests and peatlands in Sumatra, Indonesian Borneo, and Indonesian New Guinea has released hundreds of millions of tons of carbon emissions while putting some of the country's most endangered species — including orangutans, tigers, elephants, and rhino — at further risk. Oil palm plantations are now rapidly being established in other parts of the world including New Guinea, Central and South America, and West and Central Africa. Environmentalists fear that without proper safeguards and oversight, those plantations could cause substantial damage to biodiversity and climate.

Within Indonesia there is great potential to expand palm oil production without clearing additional forests. Indonesia has tens of millions of hectares of degraded land that was long-ago deforested and has little likelihood of seeing natural forest recovery. Because much of this land is claimed by communities, developing palm plantations on it could generate local livelihoods.

Jason Clay, Senior Vice President of Market Transformation at WWF, says a benefits-sharing model similar to an employee stock ownership plan (ESOP) whereby communities would grow oil palm on small plots and eventually own a stake in the palm oil mill they supply could improve equity and better align incentives between smallholders and companies.

"We've got to figure out globally how smallholders can go to scale," he said. "Joint-ventures between communities and companies are a possibility."

Oil palm plantations in Borneo

Palm oil is used widely as cooking oil and as an ingredient is processed foods, cosmetics, and industrial products. It is the highest yielding of commercial oilseeds.