Indonesian inaction forces EU’s hand with regard to palm oil forest fires
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Indonesian inaction forces EU’s hand with regard to palm oil forest fires

Tuesday, 08 October 2019
This is an opinion article by an external contributor. The views belong to the writer.
Large scale fires have been intentionally triggered this year in both Indonesia and Malaysia to make space for space for oil palm plantations. Credit:
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When Indonesia burns, ASEAN chokes – and palm oil and paper production appear to be the chief culprits. After two years of relative freedom from smog, this year’s fires – 80% of which were intentionally started by palm oil and pulpwood plantation owners to clear the way for new crops, according to officials – have reignited concerns.

This practice, outlawed by the Indonesian government in 2011, appears to have continued unabated regardless, a fact which has prompted the EU to announce phasing out palm-based biodiesel among its member states. In turn, this has caused serious dismay in a region so dependent on the produce for its economic stability and led to both Indonesia and Malaysia threatening reprisals – but the facts suggest that the EU’s course of action is the correct one.

EU justified in its embargo

In fact, even before this most recent haze season started, the EU had taken action against the sector responsible. In March of this year, the bloc announced that due to the unsustainability of the industry, palm-based biofuels would no longer be counted towards renewable transport targets for member states. The EU is aiming for renewables to make up 32% of the transport mix by 2030, meaning the use of palm oil will almost certainly be phased out. Moreover, it also imposed an 18% duty on Indonesian imports to offset subsidies given by the country’s government.

With Indonesia and Malaysia so dependent upon the crop for a large chunk of their economies, both countries have reacted angrily. Indonesia has threatened to hit back with a retaliatory tax hike on dairy products from Europe, while Malaysia has suggested it will decide to pursue purchases of fighter jets from China rather than EU firms. In August, they also claimed that the EU’s decision was motivated by commerce rather than concerns over the environment and suggested they may take the EU to the International Court of Justice over the dispute. However, given that the World Trade Organization (WTO) explicitly prohibits retaliatory gestures, it may be that Indonesia and Malaysia find themselves in the wrong, rather than the body they are accusing.

What’s more, there is also clear evidence that these illegal practices are ongoing, despite Indonesia’s 2011 moratorium. Data provided by the World Resources Institute demonstrated beyond all doubt that the recent fires were originating in land belonging to palm oil and pulpwood plantations, with the former responsible for 21% of them and the latter for 28%. The other 51% belongs to interests unknown, meaning the final figure could be far more damning.

Lip service not enough

Greenpeace has recently slammed Jakarta for failing to do enough, taking aim at three companies which it claims are responsible for burning over 403,000 hectares between 2015 and 2018. In particular, Greenpeace has identified the Sinar Mas Group as complicit in the illegal practices. The group enjoys strong Chinese backing and is made up of several companies, including Asia Pulp & Paper, one of the biggest global players in the sector, as well as Paper Excellence, which has pulp mills in Canada and France.

As evidence of the firm’s culpability, Greenpeace uncovered links between Sinar Mas and 27 partner companies which the former had previously claimed to be independent. However, some determined sleuthing on the part of the Associated Press revealed that all 27 firms were owned by just 10 individuals, eight of which were either current or former employees of Sinar Mas. These incriminating findings caused Greenpeace to cut ties with the giant and prompted the WWF to encourage all other international businesses to do the same.

The Indonesian government’s failure to crack down on complicit companies like Sinar Mas is par for the course with the mixed signals it’s sending out. The company is owned by the Widjaja family, one of the many oligarchical groups that prospered under the dictatorial regime of President Suharto. Jakarta has taken some steps in the right direction, such as making the moratorium on new forest clearance permanent and arresting approximately 200 suspects in connection with the recent blazes. On the other hand, it banned food labeled “palm oil-free” earlier this month and its own president Joko Widodo has indicated he would like all biodiesels in the country to be 50% palm oil by the end of 2020 and 100% at an unspecified future date.

Economy vs environment

It’s hardly surprising that Widodo is a staunch defender of the palm oil sector. It’s the most widely used vegetable oil in the world and Indonesia was responsible for 56% of the global supply in 2018, with Malaysia providing a further 28%. It’s a multibillion-dollar industry upon which both countries rely heavily for economic stability, but the practices employed within it are deeply damaging to both the local and global environment.

For one thing, the practice of setting fires to land to clear the way for plantations eliminates tens of thousands of hectares of forest cover, which serves as a valuable ecosystem to countless species of flora and fauna and acts as an essential carbon sink. When the land is burned and replaced by palm oil and pulpwood plantations, it has the triple hammer blow of displacing native species, releasing CO2 into the atmosphere and exacerbating air pollution. Indonesia lost 16% of its total tree cover (approximately 26 million hectares) between 2001 and 2018, with palm oil and paper thought to be the biggest culprits.

Greenpeace has long campaigned against the damaging and unsustainable processes involved in palm oil production and it appeared that a corner had been turned after the region enjoyed a relatively haze-free three years between 2016 and 2018, but this year has seen the issue resurface. Parts of Indonesia have suffered blood-red skies as particulate matter distorts sunlight, while certain regions of neighboring Malaysia recorded hugely dangerous Air Pollution Index (API) scores of 369, prompting the government to distribute two million face masks to schoolchildren in the most affected areas.

External pressure more effective than internal regulation

President Widodo’s rhetoric on the matter make it clear that Indonesia is only half-hearted in its support of cleaning up the industry and the country’s track record demonstrate that the measures currently in place are woefully inadequate for tackling a problem of this size and scale. Indeed, even the figures obtained by a self-conducted audit attested to the fact that 81% of palm oil plantations in the country are not complying with their legal requirements.

As long as the demand for palm oil remains high overseas and enforcement of industry regulation remains slack at home, plantation owners will continue to burn countless more acres of land, wreaking terrible consequences on the environment in the process. With the latter showing no signs of improvement, it’s up to the EU to put in place market-driven solutions (such as reducing demand from the region) to act as more effective deterrents for starting the fires in the first place. Otherwise, the short-term air quality of the region and the long-term environmental stability of the planet could soon go up in smoke.