MARKET DEVELOPMENT
Can Palm Oil Be Part of Green Growth in Indonesia?
Can Palm Oil Be Part of Green Growth in Indonesia?
02/07/2013 (Mongabay.com) - A new report lays out key leverage points for shifting Indonesia's palm oil industry toward a greener development path.
The report, authored by Daemeter Consulting and The Nature Conservancy (TNC), provides context on Indonesia's palm oil industry, including its local development benefits and environmental impacts, and identifies what agencies and actors are involved in various decisions that shape its expansion. The intent of the document is to "highlight opportunities to align decision-making more closely with Indonesia’s Green Growth objectives."
For example, the report suggests developing and implementing a transparent online licensing registration system for oil palm plantations. This would require involvement of both Indonesian's Ministry of Agriculture as well as local governments, but would have "high impact" on decisions that determine where oil palm licenses are issued, according to the authors. As a sweetener, increased transparency could help stem corruption.
Oil palm plantation and rainforest. Photo taken July 1, 2013 by Rhett Butler.
Another "high impact" opportunity is in land swaps. Indonesia's Ministry of Forestry controls more than 90 million hectares of land, large blocks of which have been completely stripped of vegetation. The report argues that instead of pretending that these areas are still forested or will be reforested, the Indonesian government should simplify the process of re-zoning them for agriculture. In exchange, forested lands outside the Forest Estate could be made off-limits to agricultural conversion. The effect of these land swaps could be to boost palm oil production while simultaneously protecting more forest and wildlife. It might also help improve Indonesia's forest accounting — right now forest clearing outside the Forest Estate does not even show up as "deforestation" by the Ministry of Forestry's reckoning. Finally, it may make it easier for plantation companies to "do the right thing" by enabling them to get permits to develop non-forested land. Right now, plantation companies often target forests and peatlands outside the Forest Estate simply because it is easier to get concessions than seeking relinquishment from the Ministry of Forestry.
Along these lines, various agencies within the Indonesian government could help reduce the environmental impacts of palm oil plantations by creating financial incentives for companies to maintain forest areas within their concessions. At present if a palm oil company has a block of forest within its concession it is faced with a stark choice: either convert the area for oil palm or leave it be and risk having the government claw it back and grant it to another company. It's little wonder why more palm oil companies in Indonesia don't conserve forests within their concessions.
The report, which was funded by USAID under its green development program for Indonesia, goes on to list a series of other opportunities for making the country's palm oil sector greener and more socially equitable at a time when the industry is still expanding rapidly.
Oil palm plantation.
The report, authored by Daemeter Consulting and The Nature Conservancy (TNC), provides context on Indonesia's palm oil industry, including its local development benefits and environmental impacts, and identifies what agencies and actors are involved in various decisions that shape its expansion. The intent of the document is to "highlight opportunities to align decision-making more closely with Indonesia’s Green Growth objectives."
For example, the report suggests developing and implementing a transparent online licensing registration system for oil palm plantations. This would require involvement of both Indonesian's Ministry of Agriculture as well as local governments, but would have "high impact" on decisions that determine where oil palm licenses are issued, according to the authors. As a sweetener, increased transparency could help stem corruption.
Oil palm plantation and rainforest. Photo taken July 1, 2013 by Rhett Butler.
Another "high impact" opportunity is in land swaps. Indonesia's Ministry of Forestry controls more than 90 million hectares of land, large blocks of which have been completely stripped of vegetation. The report argues that instead of pretending that these areas are still forested or will be reforested, the Indonesian government should simplify the process of re-zoning them for agriculture. In exchange, forested lands outside the Forest Estate could be made off-limits to agricultural conversion. The effect of these land swaps could be to boost palm oil production while simultaneously protecting more forest and wildlife. It might also help improve Indonesia's forest accounting — right now forest clearing outside the Forest Estate does not even show up as "deforestation" by the Ministry of Forestry's reckoning. Finally, it may make it easier for plantation companies to "do the right thing" by enabling them to get permits to develop non-forested land. Right now, plantation companies often target forests and peatlands outside the Forest Estate simply because it is easier to get concessions than seeking relinquishment from the Ministry of Forestry.
Along these lines, various agencies within the Indonesian government could help reduce the environmental impacts of palm oil plantations by creating financial incentives for companies to maintain forest areas within their concessions. At present if a palm oil company has a block of forest within its concession it is faced with a stark choice: either convert the area for oil palm or leave it be and risk having the government claw it back and grant it to another company. It's little wonder why more palm oil companies in Indonesia don't conserve forests within their concessions.
The report, which was funded by USAID under its green development program for Indonesia, goes on to list a series of other opportunities for making the country's palm oil sector greener and more socially equitable at a time when the industry is still expanding rapidly.
Oil palm plantation.