Indonesian court fines palm oil company $30 million


WASHINGTON, January 20, 2014—In a historic ruling earlier this month, an Indonesian court fined palm oil company PT Kallista Alam $30 million after finding the company guilty of illegally clearing 1,000 hectares of Sumatran forest and peat land for a palm oil plantation.

The land in question, in the Aceh province, was protected by several Indonesian conservation laws and a presidential decree refusing new permits to clear peat lands and several types of forest. The company was fined 114.3 billion rupiah ($9.5 million) as compensation and 251.7 billion rupiah ($21 million) for reforestation of the affected forests.

Palm oil is currently the most widely produced vegetable oil in the world and found in an astounding variety of foods, coming at a very large human and environmental cost. Driven by high demand and even higher prices, palm oil further endangers threatened species, destroys rainforests, contributes to climate change and hides a variety of human rights violations.

Extracted from the fruit of the oil palm tree, palm oil production is concentrated in the tropical regions of Indonesia, Malaysia, Colombia, Ghana and New Guinea.

Palm oil produced in Indonesia and Malaysia makes up 90 percent of total global palm oil production, making palm oil plantations the main driver of deforestation in these areas.

In 2006, there were 11 million hectares of palm oil on the planet, six million in Indonesia, according to the World Wildlife Fund (WWF). By 2011, Indonesia had nine million hectares of palm oil plantations, with 26 million projected for 2025, according to Rainforest Rescue.

Rapid deforestation affects hundreds of species, including threatened and endangered species like the Asian elephant, Sumatran tiger, Sumatran rhinoceros, tapir, sun bear and orangutan. The Sumatran tiger, for example, is listed as critically endangered, with less than 500 left in the wild, according to the Rainforest Action Network (RAN).

Wild orangutan populations have decreased by 50 percent in the past decade and are in danger of becoming extinct within our lifetime, according to the Orangutan Project. Their habitat has been reduced by as much as 80 percent, according to RAN. This devastating loss of population is largely attributed to palm oil plantations, which pose several threats to these and other animals.

The spread of palm oil plantations and the resulting destruction of forests and peat lands also impacts climate change. While these areas are essential in removing carbon dioxide from the atmosphere, the draining and clearing of peat lands and the fires used to clear forests to prepare land for planting release carbon emissions.

In fact, Indonesian fires are suspected to have been one of the main sources of global carbon dioxide emissions in 1997, the year with the highest emissions on record since record keeping began in 1957, according to WWF.

With a long history of human rights violations, palm oil production has been associated with community conflict, illegal taking of community lands and destruction of traditional ways of life for several indigenous and jungle-dependent communities. In Indonesia, the rapid expansion of palm oil plantations endangers the lives and tramples the rights of millions of communities who rely on the jungle for their survival, livelihood, and cultural identity.

Child labor has been widely documented in many palm oil plantations, especially in Indonesia. According to the U.S. Department of Labor, palm oil is among the industries most known for forced and child labor. RAN estimates that between 72,000 and 200,000 children are employed on palm oil plantations.

Roughly half of all the products found in supermarkets contain palm oil, according to the RAN. It is used as a vegetable oil, but palm oil is also present in thousands of processed foods including ice cream, frozen foods, margarine, chocolate, fruit juice and commercially baked goods from cookies to cakes to breads.

RAN recently identified the “Snack Food 20,” 20 U.S. companies that manufacture popular snack foods using what has come to be called “conflict” palm oil, i.e. palm oil that is produced in a way that contributes to deforestation, species extinction, climate change and human rights violations. These include Campbell Soup Company, General Mills, Dunkin’ Brands, General Mills, Grupo Bimbo and Nestlé.

Several cosmetic and household products also contain palm kernel oil, including soap, shampoo, toothpaste, and laundry detergents.

Few producers list “palm oil” as an ingredient, however. They instead use the term “vegetable oil,” or over 150 different names. There are several lists of alternate names for palm oil, including one from the Philadelphia Zoo, one from RAN, and one from Save Orangutans.

In 2004 several companies and NGOs formed the Roundtable on Sustainable Palm Oil (RSPO), an organization to promote sustainable production of palm oil. However, RSPO has been criticized for certifying peat land and deforestation as sustainable and for having weak enforcement mechanisms. Many of the “Snack Food 20” belong to RSPO.

It is difficult to avoid palm oil and products containing it because it is not usually listed as an ingredient. The best way to avoid palm oil is to avoid commercially fried and baked foods as well as highly processed foods.

After the verdict in Indonesia, PT Kallista Alam stated that it had not broken any environmental laws or caused any pollution or environmental harm. Environmentalists and conservationists, however, are seeing the ruling as an enormous triumph.

The court’s decision is indeed a huge victory, and represents one significant step in the right direction,” said Graham Usher, Landscape Protection Specialist at PanEco Foundation to Orangutan Conservancy.  “But I think many more such steps are needed before we will really see a change in the behavior of companies and officials.”

Laura Sesana is a writer and DC, MD attorney. Follow her on Facebook, Twitter @lasesana, and Google+.

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