Lessons Learned (on Palm Oil in Africa)

Lessons learned

By Emilie Filou | Published: 08 June, 2011

With unprecedented investment into the development of Africa’s palm oil industry, governments in the region are trying to avoid past environmental mistakes made in Asia

As far as commodities go, palm oil is a bit of a wonder product. Thanks to its long shelf life and high resistance to rancidity, it is used in the production of myriad goods, from margarine and biscuits, to shampoos and sweets. As a crop, palm oil is also something of a bonanza: its yields are 5-10 times higher than other oil crops; it does not require much pesticide; and it is 15 percent cheaper than other vegetable oils.

For the time being, 80 percent of palm oil production comes from just two countries – Indonesia and Malaysia. Southeast Asia has dominated the palm oil trade since the 1970s and 80s, when large-scale production in the region expanded exponentially.

Success for these countries has, however, come at a price. There are now around 10m hectares producing palm oil in Southeast Asia and a report from environmental NGO Friends of the Earth found that nearly half of these plantations had been created on primary or secondary forest land. In Malaysia, the report concluded that as much as 87 percent of the deforestation that had taken place between 1985 and 2000 could be attributed to palm oil expansion. In turn, deforestation is responsible for about 20 percent of global greenhouse gas emissions; intrinsically linking the palm oil industry to global warming. The conversion of forest land to monoculture plantations also has an enormous impact on biodiversity: 80-100 percent of mammals, reptiles and birds are lost in the process.

This legacy of detrimental social and environmental consequences of developing the industry sets an ominous precedent for Africa, a region that may be on the verge of a renaissance in its palm oil industry. According to a recent study by financial services group Nomura, Southeast Asia’s dominance of palm oil is set to recede, with cultivatable land in Indonesia and Malaysia expected to run out by 2020 and 2022 respectively.

Palm oil producers have therefore started looking for land elsewhere. Africa is a logical destination: as the palm’s homeland, its climate is ideally suited, has abundant land available for development and enjoys a closer geographical proximity to European markets than Asia. Companies such as Singapore based agribusiness, Olam, estimate that they could halve transportation costs and benefit from a 3-4 percent duty advantage compared to imports from Asia.

Olam is one of a growing number of firms that have secured large-scale concessions on the continent. The speed at which these concessions have been granted has raised concerns about the potential impact of palm oil in Africa, despite widespread commitments to implementing sustainable practices as recommended by the Roundtable for Sustainable Palm Oil, an international alliance of palm oil stakeholders promoting sustainable practices. One of its key principles is the prohibition to convert primary forest or high conservation value areas into plantations.

Yet few countries in Africa have gone through land use planning and have extensive information on what exactly is on their land. “In most countries, the government doesn’t have the information it needs to give out concessions,” says Puvan Jegeraj Selvanathan, executive board member of the RSPO and chief sustainability officer of Sime Darby. “They’re literally drawing lines on a map.”
source:
http://www.thisisafricaonline.com/news/fullstory.php/aid/308/Lessons_learned.html