Oil on troubled water

Every year, we use 20 million tons of oil. We use it to wash our hair, soap our bodies, clean the floor; it's in candles, cream, cosmetics and cakes – and most of us have no idea it's there. Palm oil, usually labelled vegetable oil, occasionally olein, is a booming industry. A report published this month by WWF has, however, identified a downside to this "green" oil. WWF says that vast tracts of oil palm "monocultures" are causing increasingly serious problems for both local people and the environment, destroying huge swathes of rainforest and threatening some endangered animals.

Palm oil comes from the tree's fruit, both the outer flesh and the inner kernel. Oil palms produce higher yields per hectare than any other oil-seed crop and are second only to soybean oil in the world's total production of vegetable oils.

More than 6.5 million hectares worldwide are planted with this miraculous palm. In Indonesia, the world's second largest oil palm exporter, a million hectares a year are being converted to oil palm plantations. As the global demand for palm oil will reach 40 million tons by 2020, new countries are keen to join in large-scale oil production.

The oil palm is indigenous to west Africa and interwoven with the continent's cultural traditions. The oil is used for cooking, lighting candles, burning, and as an ointment. The fermented sap is drunk as palm wine; the leaves become brooms, matting, roofs. Cakes of palm rind, left after the oil has been pressed, are fodder for cattle – even the dead tree trunks become home to bumble-bee larvae, a delicacy in parts of Cameroon.

Today, oil palms are clones, planted in vast monocultures where rainforest stood. Studies in Malaysia and Indonesia have shown that 80 to 100 per cent of the species that inhabited the tropical rainforest cannot survive in oil palm plantations. The few species that persist become pests since they no longer have access to their usual food source, and have no remaining predators.

Richard Perkins, an agriculture expert at WWF and a member of Unilever's Sustainable Agriculture Advisory Board, says that one of the problems is that oil palm plantations restrict the migration of large, endangered animals such as the rhino, orang-utans and elephants. He is working with industry to try to ensure that companies plant palms on areas that are not of high conservation value. "As soon as you bite into forests you lose species, but we direct companies to plant in areas that are less damaging. There is going to be some loss, but by working together we could minimise that," he says.

MR Chandran, the chief executive of the Malaysian Palm Oil Association, says: "This is not a problem for us because we are not expanding into the jungle. We own 1.3 million hectares of rubber plantations, which we are converting into oil palm plantations." Chandran believes the problem countries are Indonesia and Papua New Guinea, as they eat into virgin rainforest.

According to the Environmental Investigation Agency, oil palm plantation companies were responsible for 80 per cent of the forest fires in Indonesia from 1997-8. The latest figures from WWF indicate that Indonesia has lost an area the size of the Netherlands to forest fires, and that burning of pristine rainforest continues today.

The Centre for International Forestry Research estimates that palm oil is now the commodity that has the greatest impact on forest cover in Indonesia. Papua New Guinea has 75 per cent of its original forest intact, but as the seventh largest palm oil producer in the world, and the third largest exporter, this will change. Its forests are home to 200 species of mammals, 200,000 types of plants, and indigenous peoples. The government plans to turn 3,000 hectares of forest into oil palm plantations.

Oil palm monocultures gives rise to soil erosion as the forest clearance leaves soil bare and exposed to tropical rainstorms. Erosion causes sedimentation of the waterways, affecting drinking water and fish. Effluent from oil processing affects water quality; for every ton of oil processed, 2.5 tons of waste are released into waterways. According to Ricardo Carrere, Uruguay's representative of the World Rainforest Movement, and editor of The Bitter Fruit of Oil Palm, few companies adhere to laws regulating pollution: land contaminated by effluent is not fit for agriculture, and it can find its way into the sea. As one Malaysian oil palm worker told Carrere: "Logging companies destroy our forest and leave. Plantation companies destroy our forest and stay."

The cultivation of oil palms can result in indigenous peoples losing their land. The Dayaks of Kalimantan are seeing their way of life destroyed by plantations as they are driven from their land by force. Dayaks from the village of Lempunah near Samarinda were reportedly offered lump sums to exchange their land for shares in an oil palm plantation. When they refused, it was alleged that their village was burnt to the ground after fires were started by men on behalf of oil palm companies. Their crops destroyed, the people had little choice but to cede their land.

Governments overwhelmed by foreign debt see palm oil as a cash cow. But the money does not trickle down, for plantations are generally owned by large companies and supported by organisations such as the World Bank. "Governments seem to have learnt nothing from experiences with 'miracle' crops. The falling prices of coffee, cacao, and bananas have a simple explanation – the widespread promotion of a certain crop in as many countries as possible. The result is competition between and within countries, but the burden is carried by local workers," adds Carrere.

But the news is not all bad. "Malaysia is shot to bits," says Perkins, "but there is still a lot to play for in Indonesia."

Even so, Unilever is establishing a sustainable palm oil plantation in Malaysia under the auspices of their local company, Pamol. Liquid effluent from the processing plant is used as water and fertilizer for trees; plants that fix nitrogen and fertilise the soil are grown between trees; insects and owls are encouraged to keep down pests; and hillsides are left as forest, decreasing erosion and providing a wildlife refuge.

"We want to use our influence to make palm oil plantations more sustainable," says Trevor Gavin, a spokesperson for Unilever. "We've been collaborating with the Malaysian Palm Oil Board, and we want to extend our plans to Indonesia." As Unilever accepts, only a handful of big companies are involved in the industry. To get them to change will be a struggle.

"WWF doesn't want the consumer to boycott palm oil because it would damage co-operation with producer interests in the countries we want to work with," says Perkins. "Consumers should speak to the supermarket and ask how their palm oil is produced. Investors could ask their bank if funds are used to finance the destruction of high conservation value areas. It's a call to awareness, not action."

Another problem is genetically modified palms. Malaysia is creating GM oil palms to produce "the kind of oil, flavour, and scent the detergent and cooking-oil manufacturers, the chocolate makers, the beauty industry, the perfume designers and salad makers want," says Chandran. Palm oil contains 40 per cent saturated fat and scientists are developing a palm with higher levels of unsaturated fats. He adds: "Because they are tree crops, it'll be 15 years before we plant the first transgenic [GM] palm."

The world's most healthy palm oil: good for our hearts, perhaps less so for our souls.

Further information: www.wrm.org.uy/plantations/material/oilpalm.html