Thu, 15 Apr 2010

Mounting market pressure on Indonesia’s palm oil industry has forced producers to unite and consolidate efforts to combat what they deem an incomplete assessment by environmentalists.

Government representatives, members of the Association of Indonesian Palm Oil Producers (Gapki) and company CEOs gathered in Jakarta on Wednesday to draft guidelines on how to convince global consumers of the sustainability of palm oil development in Indonesia.

Swiss food and beverage company Nestle SA announced last month of it would drop an Indonesian palm oil supplier, PT Sinar Mas Agro Resources and Technology (SMART), over concerns about the company’s environmental record.

Previously Unilever and Kraft had stopped buying palm oil from Sinar Mas for the same reason.

In a report widely publicized in 2008, Greenpeace states that CPO producers had converted peat lands, natural forests and habitats of Indonesia’s indigenous orangutan into oil palm plantations. The report was later supported by field investigations and satellite data.

After the Wednesday meeting Gapki secretary-general Joko Supriyono said a joint endeavor had been established between the association, the Agriculture Ministry and the Malaysian Palm Oil Board (MPOB) to provide “a more accurate analysis” of the palm oil industry, particularly in terms of carbon emissions generated compared to other commodities used for biofuel such as cassava and corn.

Musdhalifah Machmud, assistant to the deputy coordinating economic minister for plantation and horticulture, admitted there were plantation companies that abused their permits and carried out illegal logging.

However, she said, plantation firms currently operated on 7.2 million hectares of land or 5.5 percent of the 188 million hectares of forests available in Indonesia.

Most of the forest destruction was carried out by other parties, she said.

Musdhalifah said the government had made a significant improvement in fighting illegal logging, imprisoning many company officials, several regents and governors involved with the crime.

She also said palm oil was among the strategic commodities chosen by the government for its export value and ability to provide jobs.

“The negative campaign waged by the NGO is no longer attacking us producers but the state and its people,” Joko said.

Indonesia is the biggest producer of palm oil, contributing 44.5 percent to the world’s total output of 42.9 million tons in 2008.

Also present at the meeting was Alan Oxley, the chairman and founder of World Growth, an NGO focusing on sustainable development in developing countries.

Several foreign NGOs including Greenpeace and WWF had strong connections with the European Commission, he said, claiming that up to 60 percent of WWF’s revenue came from the commission.

“It suited these NGOs to maintain the European perspective on developing countries ... Europe can prioritize environmental issues over economic growth because they are already wealthy,” Oxley said.