Growing pains

PUBLISHED : Sunday, 28 November, 2010, 12:00am
UPDATED : Sunday, 28 November, 2010, 12:00am

A few blocks off Jalan Kemang Raya, the main drag in Jakarta's trendy Kemang district, and a stone's throw from the shops of tailors, antique-furniture dealers and dog groomers, stand plush houses and villas with swimming pools in their back gardens. These homes are popular with expatriates but in one, the talk is not about international-school fees or family weekends in Bali, but about the causes of deforestation.

In the run-up to the next United Nations climate-change conference, which begins in Cancun, Mexico, tomorrow, Indonesia has become ground zero for the great palm-oil debate - a dispute over deforestation that's become increasingly nasty and is likely to feature prominently at the meeting.

Indonesia has some of the largest remaining rainforests and, from its Kemang office, Greenpeace is waging a bitter battle against the US$12 billion-a-year palm-oil industry.

'Our campaign is not an anti-palm-oil campaign; it's an anti-deforestation campaign,' says Bustar Maitar, lead forest campaigner for Greenpeace Indonesia. Even before the highly publicised Bali climate-change conference, in 2007, Maitar points out, 'we focused more on palm oil as a key driver of deforestation in Indonesia'.

Several kilometres away, in central Jakarta, on the upper floors of a tower in the Plaza BII complex, there's a group of people who don't see it that way. On the 28th, 29th and 30th floors lie the offices of Sinar Mas Agro Resources and Technology (Smart).

Since December last year, Greenpeace has released a series of reports accusing Smart of mass environmental destruction in the course of expanding its production of palm oil. The allegations have related to the clearing of off-limit peat lands, which contain huge amounts of greenhouse-gas-emitting carbon, destroying the habitat of orangutans and other wildlife, and cutting down protected rainforest.

Smart has fought back, accusing the environmental group of unfair and vindictive targeting, and claims its own commitment to following Indonesian forestry laws and sustainable palm- oil farming is not being reported by the media.

Smart is backed by the Indonesian Palm Oil Association (IPOA), which notes the industry has undergone major reforms since the slash-and-burn practices of the 1980s, employs millions and has brought remote, impoverished communities into the 21st century.

Palm oil is extracted from the fruit of the palm tree, native to West Africa but now grown in tropical Asia. The most widely used edible oil, it can be found in a huge range of consumer products, including ice cream, peanut butter, potato chips, chocolate, cosmetics, shampoo and soap.

'Palm oil is a strategic product and helps to alleviate poverty,' says Daud Dharsono, president-director of Smart. 'The industry provides direct and indirect employment for 4.5 million persons in [Indonesia]. In 2009, palm oil accounted for 11 per cent of Indonesia's non-oil and gas exports.'

Indonesia is the world's largest producer of palm oil and, along with neighbouring Malaysia, provides nearly 90 per cent of the global supply. China, whose appetite for palm oil is growing 20 per cent a year, is the world's biggest consumer, followed by India.

Greenpeace has called for a moratorium on palm- oil expansion, to try to halt deforestation, which, in Indonesia, is estimated to amount to 1.1 million hectares a year.

'Twenty per cent of global greenhouse-gas emissions are from deforestation,' Maitar says. 'Why is Indonesia important? It's the third-largest greenhouse-gas emitter in the world. Eighty per cent of that is coming from the forestry sector, and 40 per cent of that is peat-land destruction for [the expansion of] palm-oil plantations.'

Fadhil Hasan, secretary general of the IPOA, rejects Greenpeace's contention that palm-oil expansion is the leading driver of deforestation. He says palm-oil plantations account for only 7.5 million hectares of the 133 million hectares of 'forest area' Indonesia's forestry ministry has authority over. Hasan is not alone in accusing Greenpeace and other environmental groups of engaging in a 'black campaign' in the foreign media to smear the image of the country's palm-oil industry and scare off international buyers. Tactics have included activists dressed as orangutans storming the headquarters of multinational corporations, with the intent of attracting negative media coverage.

'The criticism is not proportional and it's unfair,' Hasan says. 'If we operated in the way we did a long time ago - burning, clear-cutting, trashing the environment - we could understand the criticism. We are not perfect but you can't generalise individual cases to reflect the entire industry.'

He also rejects claims by activists who've said they 'aren't convinced' palm-oil plantations are a major alleviator of poverty in Indonesia.

'They know palm oil has brought millions of people out of poverty, ensures sustained livelihoods for more than 16 million [workers and their families] and brought roads, bridges and electricity to deep rural areas of Sumatra and East Kalimantan province' on the Indonesian side of Borneo island, Hasan says.

Green groups have excoriated palm-oil companies, accusing them not only of devastating the environment but also killing off endangered species. They've also gone after the international companies that buy palm oil. A video released by Greenpeace in March parodies an advertisement for the Kit Kat chocolate bar, which is produced by Nestle and contains palm oil. In the video, a beleaguered office worker taking a break from shredding paper unwraps a Kit Kat. But instead of chocolate, he pulls out and bites into the severed finger of an orangutan, causing blood to stream down his face and onto his computer keyboard.

As well as intimidation, Greenpeace has been accused of fabricating environmental evidence and being funded by European producers of rapeseed, sunflower and soya beans, the oils of which can't compete with palm on price and efficiency. Greenpeace denies the allegations.

While the accusations and denials fly, neutral observers say both Greenpeace and the super-rich palm-oil producers are hitting below the belt.

'The sides are engaged in a political debate and are trying to make it an environmental debate,' says one prominent Jakarta-based forestry expert, who asks not to be named.

Erik Meijaard, an Indonesian-based forestry expert with People & Nature Consulting, says the scientific arguments by both sides contain holes but that fact is being lost amid underhand personal attacks.

'I see mistakes by both of them,' he says. 'A statement is made once then repeated by both of them. As a scientist, I'd like to go back to the facts but it's difficult to find the truth. Both sides are muddying the waters.'

Alan Oxley is a former Australian trade ambassador and founder of World Growth, an NGO that supports regulated commercial forestry and palm- oil production in developing nations to alleviate poverty. He's also, arguably, the most controversial figure within the global palm-oil debate. Some call him a friend to poor farmers; others say he is a paid apologist and lobbyist for the logging and plantation industries. Oxley hasn't shied away from the debate, regularly sparring with the likes of Greenpeace and WWF.

One of his most explosive arguments is the contention that two-thirds of forest clearance globally is driven by poor farmers in developing nations rather than commercial forestry, palm-oil and pulp and paper companies. Widely cited international figures, however, estimate that 60 per cent of forest clearance globally is for commercial purposes.

'What's being missed here is how much land you need to set aside to protect biodiversity,' says Oxley. 'The position of WWF is that all forest land needs to be set aside to protect biodiversity. That's not correct.

'The other thing they argue which is not true is that most deforestation is caused by the plantation industry and palm oil. What is the best way to stop deforestation? End poverty.'

There's little doubt Greenpeace has succeeded in harming Smart and giving a black eye to Indonesia's palm-oil industry.

'In the past two years, there's been an intensification of the campaign on Indonesia because it's a soft spot as part of the global campaign to restrict forestry,' says Oxley.

During the contentious Copenhagen climate conference last December, Greenpeace released a report accusing three Smart companies of illegal land clearing in Indonesia's West Kalimantan province, which is also on Borneo. The next day, Unilever, the world's biggest user of palm oil, announced it was suspending purchases from Smart until the company could prove its plantations weren't contributing to deforestation. In March, Nestle also dropped Smart as a supplier of palm oil, after coming under pressure from Greenpeace and its Kit Kat video.

Greenpeace then began targeting Nestle suppliers who get palm oil from Smart. One of them, United States food company Cargill, demanded that Smart respond to Greenpeace's allegations and sought an investigation by the Roundtable on Sustainable Palm Oil (RSPO). The RSPO did not investigate but later rebuked Smart for findings that came out of an audit commissioned by the producer itself.

Smart commissioned the audit from an independent team of environmental experts, which came back with a mixed report in August. The report said Smart had not, as Greenpeace claimed, destroyed primary forest but had planted in restricted greenhouse-gas-rich peat lands.

Both sides declared victory but the battle raged on. In July, Greenpeace had released a report about Asia Pulp & Paper (APP), which is also part of the Sinar Mas Group, owned by the Widjajas, one of Indonesia's richest families. The report claimed APP was continuing to 'acquire and destroy rainforest and peat land to feed its two pulp mills in Sumatra'. As a result of this and other Greenpeace reports, multinational corporations such as Burger King, Kraft, General Mills and Carrefour also stopped dealing with Smart and APP.

APP counterattacked. It hired ITS Global, an international consulting firm owned by Oxley, to do an audit of the Greenpeace report on its pulp operations. In September, ITS Global released its results, which claimed Greenpeace had faked data to build a 'phony' case against APP.

'The audit systematically analysed 72 Greenpeace claims against APP that included more than 300 footnotes and 100 references,' said Oxley, in a press release announcing the audit's findings. 'The evidence shows that Greenpeace provided quotes that don't exist; maps that show concessions that don't exist; and used source material with high margins of error that was cited as absolute fact.'

This attack on one of the world's best-known environmental groups did not go unchallenged. William Laurance, a leading international conservation biologist, and 12 other biodiversity scientists penned an open letter challenging the arguments of Oxley, World Growth and ITS Global on deforestation and palm oil. The letter accused them of being closely allied and funded by industrial log- ging and palm-oil and pulp plantations, and, as such, of having 'trodden a thin line between reality and a significant distortion of facts' about palm oil's role in deforestation.

Oxley shot back with his own open letter, again claiming that supposedly scientific reports by green groups on palm oil, forestry and deforestation are either not supported, misrepresented or distorted.

'The declared aim of Greenpeace and WWF is to see an end to all conversion of forest to any other purpose everywhere,' he wrote. 'There is no scientific case for this and a powerful economic argument against.'

So who is right here?

Meijaard notes that 75 per cent of palm-oil plantations in Indonesia are, in fact, outside forest areas. Greenpeace doesn't dispute this but counters that plantation operators - who are planning to put 30 million hectares more under palm trees in Indonesia - are nonetheless encroaching on and tearing down forests and off-limits peat lands. The group also says other causes of deforestation, including illegal logging and forest fires, are linked to palm-oil expansion.

'I try to be positive with everybody but Oxley blaming local people [for deforestation] and promoting big companies? It's hard to believe him,' Maitar says.

ON A QUIET CAMPUS set within a 50-hectare protected rainforest in West Java, the global base of the Centre for International Forestry Research (Cifor) is removed from the heated international debate on palm oil. The non-profit group conducts research on tropical forests around the world and is widely respected for its conclusions and recommendations on forestry management in developing nations.

Louis Verchot, the principal scientist for climate change at Cifor, is well aware of the palm-oil debate. He explains that land use change and management is responsible for 60 per cent to 80 per cent of global greenhouse-gas emissions - and that, of course, includes converting land for palm-oil plantations.

While saying that 'there are real downsides to oil palm', Verchot also says it would be wrong to impose any kind of moratorium in Indonesia, Malaysia or elsewhere.

'Those who say 'no palm oil' anywhere for any reason are not helping the situation,' he says. 'If that becomes a reality, there would be serious poverty fallout. It would wreck rural development in Indonesia and other countries.'

That said, the use of all peat lands, even those less than three metres deep and thus legal for clearance under Indonesian law, must stop, Verchot says. Cifor, he says, is conducting research in Sumatra to measure the carbon dioxide from peat lands, which will provide clear data on their contribution to greenhouse-gas emissions.

'I don't think arguments based on ideology are useful,' Verchot says. 'Solutions should be made on rational data.' And rational discussion.

A panel discussion on forestry management hosted by the Jakarta Foreign Correspondents Club last month provided a glimpse of the testy relations between the combatants. When Maitar stood up in the audience and asked a tough question of Aida Greenbury, director of sustainability at APP, who was sitting on the panel, she replied, to laughter from the audience, 'It's nice to finally meet you.'

Relations between Greenpeace and Smart are not beyond redemption, however. The sides sat down last month, with the Indonesian Ministry of Agriculture as mediator, and exchanged views.

Independent forestry experts say more of this is needed, given that the Indonesian government sees palm-oil production as a national necessity.

Maitar says that's fine but the giant production companies need to back up with proof their claims that they have changed.

'I want to keep thinking positive and think that Smart will become a leader in sustainable palm-oil production,' he says.

Regardless of the data, and motives of environmentalists, it would be in the interests of palm-oil producers in Indonesia and around the world to demonstrate they have cleaned up their act because, through gatherings such as that in Cancun, the world is watching.