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Managing Oil Palm Landscapes a Seven-Country Survey of the Modern Palm Oil Industry in Southeast Asia, Latin America and West Africa

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Managing Oil Palm Landscapes a Seven-Country Survey of the Modern Palm Oil Industry in Southeast Asia, Latin America and West Africa OCCASIONAL PAPER Managing oil palm landscapes A seven-country survey of the modern palm oil industry in Southeast Asia, Latin America and West Africa Lesley Potter OCCASIONAL PAPER 122 Managing oil palm landscapes A seven-country survey of the modern palm oil industry in Southeast Asia, Latin America and West Africa Lesley Potter Crawford School of Public Policy, ANU College of Asia and the Pacific, The Australian National University Center for International Forestry Research (CIFOR) Occasional Paper 122 © 2015 Center for International Forestry Research Content in this publication is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0), http://creativecommons.org/licenses/by/4.0/ ISBN 978-602-1504-92-5 DOI: 10.17528/cifor/005612 Potter L. 2015. Managing oil palm landscapes: A seven-country survey of the modern palm oil industry in Southeast Asia, Latin America and West Africa. Occasional Paper 122. Bogor, Indonesia: CIFOR. Photo by Lesley Potter An oil palm estate in Lamandau District, Central Kalimantan, Indonesia. CIFOR Jl. CIFOR, Situ Gede Bogor Barat 16115 Indonesia T +62 (251) 8622-622 F +62 (251) 8622-100 E [email protected] cifor.org We would like to thank all donors who supported this research through their contributions to the CGIAR Fund. For a list of Fund donors please see: https://www.cgiarfund.org/FundDonors Any views expressed in this publication are those of the authors. They do not necessarily represent the views of CIFOR, the editors, the authors’ institutions, the financial sponsors or the reviewers. Contents Acknowledgments vi 1 Introduction 1 1.1 The countries under study 1 1.2 The organization of the report 6 2 Indonesia 10 2.1 The influence of oil palm expansion on economic development and land-use change 10 2.2 The role of policies and corporate strategies in shaping oil palm development 15 2.3 Socioeconomic outcomes from disparate business models in oil palm development 18 2.4 Initiatives towards more sustainable and inclusive oil palm production 22 2.5 Conclusion 26 3 Malaysia 28 3.1 The influence of oil palm expansion on economic development and land-use change 28 3.2 The role of policies and corporate strategies in shaping oil palm development 31 3.3 Socioeconomic outcomes from disparate business models in oil palm development 34 3.4 Initiatives towards more sustainable and inclusive oil palm production 38 3.5 Conclusion 40 4 Colombia 41 4.1 The influence of oil palm expansion on economic development and land-use change 41 4.2 The role of policies and corporate strategies in shaping oil palm development 47 4.3 Socioeconomic outcomes from disparate business models in oil palm development 51 4.4 Initiatives towards more sustainable and inclusive oil palm production 55 4.5 Conclusion 58 5 Peru 60 5.1 The influence of oil palm expansion on economic development and land-use change 60 5.2 The role of policies and corporate strategies in shaping oil palm development 65 5.3 Socioeconomic outcomes from disparate business models in oil palm development 66 5.4 Initiatives towards more sustainable and inclusive oil palm production 69 5.5 Conclusion 70 6 Brazil 71 6.1 The influence of oil palm expansion on economic development and land-use change 71 6.2 The role of state policies and corporate strategies in shaping oil palm development 76 6.3 Socioeconomic outcomes from disparate business models in oil palm production 79 6.4 Initiatives towards more sustainable and inclusive oil palm production 83 6.5 Conclusion 87 IV | Lesley Potter 7 Nigeria 88 7.1 The influence of oil palm expansion on economic development and land-use change 88 7.2 The role of policies and corporate strategies in shaping oil palm development 92 7.3 Socioeconomic outcomes from disparate business models in oil palm development 97 7.4 Initiatives towards more sustainable and inclusive oil palm production 102 7.5 Conclusion 105 8 Cameroon 106 8.1 The influence of oil palm expansion on economic development and land-use change 106 8.2 The role of policies and corporate strategies in shaping oil palm development 110 8.3 Socioeconomic outcomes from disparate business models in oil palm development 113 8.4 Initiatives towards more sustainable and inclusive oil palm production 116 8.5 Conclusion 117 9 Overview 118 9.1 What major themes have emerged from the literature on the seven countries to address the four questions? 118 References 122 List of figures and tables Figures 1 Monthly CPO Prices, February 2010 to December 2014. 4 2 Indonesia: Land Cover, focussing on Sumatra and Kalimantan, the areas of greatest oil palm development. 11 3 Malaysia: Land Cover. Note distribution of oil palm areas between Peninsular Malaysia and East Malaysia (Sarawak and Sabah). 29 4 Colombia: Land Cover, indicating main oil palm areas. 42 5 Peru: Map of Vegetation and land cover in a section of the Peruvian Amazon. 61 6 Brazil: Map of the northern part of Para State showing location of oil palm areas. 72 7 Nigeria: indicating main oil palm areas in the south and around the Niger Delta. 89 8 Cameroon: vegetation cover and oil palm plantation areas in the south of the country. 107 Tables 1 Production, yield and mature area of oil palm, selected producers, 2000–2012. 3 2 Main exporters of CPO: selected years. 4 3 Indonesia: Exports of CPO (‘000 t) selected years, by recipient country or area. 5 4 Generalised production, trade and consumption, 7 countries studied, 2012. 5 5 Oil palm planted areas by landholding size, selected years.a 43 6 Area of oil palm in production by zones, 2008–2013. 44 7 Production and yield of crude palm oil (CPO) by zones, 2008–2013. 44 8 Area of oil palm, estates and family farms and direct employment, Pará 2013. 76 9 Estimated area under oil palm by production system and state in the Niger Delta. 92 Acknowledgments I would like to acknowledge the assistance of the has been conducted in the context of the Oil following people with this work: Palm Sentinel Landscape with funds provided by the CGIAR Research Program on Forests, Trees From CIFOR Bogor: Pablo Pacheco (for his many and Agroforestry (CRP-FTA). This collaborative suggestions and his patience), Sophia Gnych; program aims to enhance the management and use Indonesia: Piers Gillespie, Peter Kanowski, Gary of forests, agroforestry and tree genetic resources Paoli, Adi Susanto; Malaysia: Colin Barlow, Rob across the landscape from forests to farms. CIFOR Cramb; Colombia: Carmenza Castiblanco-Rozo, leads CRP-FTA in partnership with Bioversity Carmilo Colmenares, Andres Etter, Sonia Hortua International, CATIE, Agricultural Research Romero, Vicky Marin-Burgos; Peru: Ayme Muzo, for Development (CIRAD), the International Miguel Pinedo-Vasquez; Brazil: Marcello Brito, Center for Tropical Agriculture and the World Joel Buecke, Silas Cezar da Silva, Pieter Sijbrandij; Agroforestry Centre. and Cameroon: Patrice Levang. The comments and suggestions of three referees have also been Omissions and errors are of course useful in improving the overall report. This work my responsibility. 1 Introduction 1.1 The countries under study Indonesia and Malaysia have been the target of much international (and some national) criticism on The author was commissioned by CIFOR to both environmental and social grounds. Indonesia compile a literature review for a project called has been castigated for its high levels of forest loss Sentinel Landscapes to focus on the impacts of linked to the rapid expansion of oil palm. Despite recent oil palm expansion (post-2000) in seven now forming their own ‘sustainability’ organizations, countries: Indonesia, Malaysia, Colombia, Peru, the ISPO and MSPO, Indonesia and Malaysia still Brazil, Nigeria and Cameroon. The countries under provide the backbone of membership of the RSPO study provide a series of contrasts – in the overall (the Round Table for Sustainable Palm Oil), the importance of the palm oil industry to the national leading global organization promoting improved economy; in palm oil’s contribution via exports standards on plantations and among smallholders to the global supply chain; in the longevity of the and certifying the product of those in compliance industry; and in the production models in use. with the standards. The countries were selected to include the Indonesia and Malaysia also represent the Asia- major players in the industry and to provide Pacific group of palm oil producing countries, representative examples from the tropical regions which include Thailand (No. 3) and Papua-New of Asia, Latin America and Africa. Indonesia and Guinea (PNG) (No. 7) in world production Malaysia are the obvious choices with which to rankings. Although unique and interesting in their begin, as together they are responsible for about own right, Thailand and PNG have been omitted 86% of global palm oil production. Not only are from this study in favor of examples from Africa they the dominant force in the industry in terms of and Latin America.2 exports of palm products,1 but oil palm has made a huge impact on local landscapes and employment The countries ranked 4 and 5 in global production in these countries. Despite their competitiveness, terms are Colombia and Nigeria. Colombia, the Indonesia and Malaysia can almost be viewed Latin American leader, has had a difficult recent as one palm oil economy, with large numbers of history of narco-related violence, much of it in oil Indonesians representing an essential source of palm areas. Particular types of smallholder business labor on Malaysian estates, while many Malaysian- models have been instituted, while the country has owned plantations have been established on developed a large palm oil-based biodiesel industry, Indonesian land. mainly locally focussed. The leading zone of Colombia’s production is in the east, the Orinoco 1 Palm products also include palm kernel oil, which is 2 Byerlee et al.
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