Palm | Kelapa Sawit

NGO: Palm oil industry highly sustainable in developing economies

01/10/2009 (The Star Online), Petaling Jaya - Palm oil, which accounts for 60% of the global vegetable oil trade, has come under fire from Greenpeace and Friends of the Earth. The non-governmental organisations (NGOs) are pressuring processors and consumers to boycott the oil and European Union (EU) governments to block its import based on the contention that palm oil damages the environment.

But, according to a report by World Growth entitled Palm Oil – The Sustainable Oil, palm oil uses less land than crop-based oilseeds.

“Only 0.26ha is required to produce a tonne of palm oil while soybean, sunflower and rapeseed need 2.2ha, 2ha and 1.5ha respectively to produce the same amount of oil,” said the report.

The proposed restriction may also hurt the export trade of developing countries such as Malaysia and Indonesia that collectively produce 87% of the world’s palm oil.

The report said the palm oil industry was a highly sustainable development tool in the economies of many developing countries.

World Growth chairman Alan Oxley said the campaign by environmental groups to prevent conversion of forest land to other more productive purposes would deny developing countries the opportunity to use palm oil as a development tool.

“The World Bank and the Asian Development Bank have rated palm oil in Indonesia and Malaysia respectively as a very high quality development tool for reducing poverty,” he told StarBiz via email.

In Malaysia, the world’s second largest palm oil producer, the industry currently employed 570,000 people with export earnings of more than RM68bil last year, said the report.

World Growth said the EU import demand for palm oil had also grown as some countries there had resorted to using it as a feedstock for bio-diesel production.

“But the proposed EU Renewable Energy Directive includes a condition that will restrict the availability of palm oil,” it said.

On the industry’s impact on the environment, the report said it had not destroyed forests’ biodiversity in developing countries.

“For example, palm oil is restricted to only 20% of the total land in Malaysia allocated for agricultural purposes.

“And in Indonesia, palm oil is only cultivated in areas set aside for commercial production,” it said.

Oxley added that biodiversity in forests was protected by establishing forest conservation areas which contained representative strands of natural forests, not by imposing a blanket ban on conversion of forest land for other purposes.

“And well-managed oil palm plantations are more effective in absorbing greenhouse gases than natural forests,” he said.

Moreover, said the report, the technical understanding of carbon footprint of oil palm, other plantations and forest industries was still weak.

World Growth is a non-profit NGO established to bring balance to the debate over trade, globalisation and sustainable development.