Negative Campaigns Against Palm Oil Hurt Indonesia's Economy: Lawmaker, Analysts

Lawmaker Firman Subagyo has slammed tactics by environmental activists operating in Indonesia to discredit palm oil. (Photo courtesy of DPR.id)

By : Muhamad Al Azhari | on 10:42 PM October 11, 2018
Category : Business, Commodities, Featured

Jakarta. An organized and sustained campaign by environmental activists against the palm oil industry has resulted in collateral damage to Indonesia's economy, a lawmaker and analysts said.

Palm oil, which is Indonesia's biggest source of foreign exchange, has been blamed for deforestation, biodiversity loss and human rights abuses, despite it having made significant contributions to job creation and rural economic growth in the archipelago.

Indonesia still managed to post record-high revenues from its palm oil exports last year, despite the commodity facing mounting pressure, including accusations by the European Union that it contributes to rising greenhouse gas emissions due to deforestation and peatland drainage.

The country's palm oil exports rose 26 percent to $22.97 billion last year, with India, China, Pakistan, Bangladesh, the United States, the European Union and African nations among the biggest buyers.

"We do not value this commodity enough. Why do we have to defend it? Because it relates to our national competitiveness. The government and the people of Indonesia should not allow negative campaigns to affect our national pride," Firman Subagyo, a member of House of Representatives Commission II, which oversees regional autonomy and bureaucratic and agrarian reform, told the Jakarta Globe on Wednesday.

Firman also slammed tactics by environmental activists operating in Indonesia to discredit palm oil, including last month's occupation by Greenpeace of Wilmar International's refinery in Bitung, North Sulawesi. The nongovernmental environmental organization brought a band to perform on top of a silo, while others unfurled banners with the words: "Drop dirty palm oil now."

"We know that it is not the first time those NGOs took extreme actions to get people's attention. They think they are cool, but they aren't, because they are breaking the law. This is a country with the rule of law," he said.
Greenpeace activists protesting on top of a silo at Wilmar International's refinery in Bitung, North Sulawesi, last month. (Photo Courtesy of Greenpeace) Greenpeace activists protesting on top of a silo at Wilmar International's refinery in Bitung, North Sulawesi, last month. (Photo Courtesy of Greenpeace)

"Greenpeace's actions at Wilmar's palm oil refinery in Bitung is not only a criminal act of trespassing and vandalism but a safety risk to the activists as well as Wilmar staff. No organization is above the law, and we urge Greenpeace to adopt a collaborative approach and work with the palm oil industry to take genuine and positive action," the company said in a statement on Sept. 25.

Prior to the protest, Greenpeace released a report titled "Final Countdown: Now or Never to Reform the Palm Oil Industry," in which it highlighted that deforestation fueled by the production of the vegetable oil is still rampant in countries such as Indonesia and Malaysia, because popular consumer brands like Kellogg's, Kraft Heinz, L'Oréal, Mars, Mondelez, Unilever, Nestlé and Pepsi continue to buy from producers that source their palm oil from producers that are responsible for deforestation in Indonesia.

Greenpeace claimed in the report that it investigated 25 major palm oil producers in Indonesia and Malaysia and found that these producers had been responsible for the loss of more than 1,300 square kilometers of rainforest since the end of 2015.

"The investigation exposes the total failure of Wilmar International, the world's largest palm oil trader, to break its links to rainforest destruction," it said.

But in the seemingly never-ending tug of war, the company responded in the same statement saying: "Greenpeace's allegation that Wilmar is failing at monitoring our supply chain is based on a willful lack of understanding of our work on the ground."

"Wilmar, with support from Aidenvironment Asia, executes the Supplier Group Compliance Verification program. Launched in December 2013, currently monitoring 11 million hectares, which covers 117 parent groups representing approximately 1,500 individual plantations and close to 500 mills spanning across Malaysia, Indonesia and Papua New Guinea," it said in the statement.

"Wilmar was neither provided a copy of the latest Greenpeace report nor an opportunity to comment."

Too Much Democracy?

Bhima Yudhistira Adhinegara, an economist at the Institute for Development of Economics and Finance (Indef), said in a discussion in Jakarta on Oct. 5 that he noticed that despite criticism, the standard of Indonesia's democracy remains the highest among Southeast Asian nations. However, he said foreign NGOs take advantage of this to get their message across in unconventional ways.

(Bhima Yudhistira, an economist with a local economic think thank the Institute for Development of Economics and Finance (Indef), was speaking in a discussion on Friday ( 05/10). (JG Photo/Muhamad Al Azhari)
"But the industry also needs to learn; this is the millennial era. Maybe one of the reasons the industry has failed so far to convey its message on the sustainable practices it has implemented, is because it is still using old methods? If they want to tell young people that palm oil is the world's most efficient vegetable oil, maybe it is a good idea to start with the language millennials understand?" he said.

Bhima said investment in the agricultural industry declined last year due to the many constraints faced by the industry, not only negative campaigns, but also government policies.

He added that investment in palm oil plantations has seen the biggest decline.

President Joko "Jokowi" Widodo signed a moratorium on new oil palm plantation permits last month and ordered a review of existing permits – a signal that the government is taking advice from environmental activists.

The moratorium, which is set to remain in place for three years, applies to new and submitted requests, as well as those approved but which do not yet include set boundaries, as well as those inside natural forests.

Bhima said in view of the recent decline of the rupiah and fluctuation in the country's trade balance, the government should instead of punish, provide stimulus and pay serious attention to export-oriented industries, such as palm oil.

"Palm oil is a quick win to improve exports," he said.

Sudarsono Soedomo, a lecturer at the Bogor Agricultural University (IPB) in West Java, said foreign NGOs often discredit Indonesia's palm oil without a fair scientific basis.

"The government should be investigating foreign NGOs that have been campaigning against palm oil and hurting the Indonesian economy," he said.

Show More

 
MORE NEWS