Palm Oil Industry and Poverty Reduction

Alan Oxley, The Jakarta Post

Writing in the International Herald Tribune late last year, Tun Dr. Lim Yeng Kaik, a former senior Malaysian Cabinet minister, characterized the campaign of Western environmental activists to restrict the palm oil industry as the environmental version of the “White Man’s Burden”.  The aim was to impose western values on colonial peoples. He coined the term the Green Man’s burden.

The Indonesian palm oil industry showed similar resentment when Nestle and Unilever bowed to pressure several months ago from Greenpeace to restrict use of palm oil and paper products from Indonesia. Small holders, representing the 20 million people dependent on the industry, protested in Jakarta and industry leaders threatened to lead boycotts of Unilever products.

If Greenpeace got the point, it is ignoring it. This week it released in Amsterdam a scurrilous report, Pulping the Planet, which purported to attack one of Indonesia’s largest and the most successful resources companies, Sinar Mas.

The company is just a proxy target. Greenpeace is taking aim at the path Indonesia has taken to raise living standards and reduce poverty. The Greenpeace message is “do it our way, or not at all”.  If the cost is poverty, so be it.

In the same way Europe transformed forest land as it industrialized and developed, so too are Indonesia and other developing countries. At least Greenpeace is consistent in one respect. It would have also opposed the industrialization of the Ruhr in Germany and the north of England.  Its ideal world is an undisturbed environment, even if life spans are short and living standards low.

Greenpeace’s complaint is the very success Indonesia’s major resources companies have had in building prosperity and jobs out of one of Indonesia’s greatest natural resources – its rich soils and climate.  It contends too much forest is being converted.  Around 25 percent of the country of which around half is forested is reserved for forest. Is that not enough? It is far more than the average reserved in Europe.

Greenpeace claims stopping any further conversion will save endangered species. That will not: only deliberate conservation programs save species; and they are well supported by the very companies Greenpeace is seeking to demonize.

The Greenpeace strategy is to bring external pressure to bear on the Indonesian government to go further than it has committed in its agreement with the Norwegian government to adopt a broad program of sustainable forestry.

That agreement contains a commitment to a temporary moratorium on further conversion of forest and peat land for expansion of palm oil and plantation forestry.

The Greenpeace demand in the report attacking Sinar Mas is clear – make the moratorium permanent.

The commitment must be temporary for two reasons. First, the facts of the situation are not clear. A lot of land has been cleared but not taken up with new plantations. Why not?  One reason is confusion over land titles and permits issued by different government authorities which overlap.

As well, Indonesia does not have a proper inventory of what generates greenhouse gas emissions.

Strategies to meet the government commitment to reduce emissions cannot be developed until proper data is acquired.

The second reason is that the policy framework in Indonesia governing land use and plantations needs fine tuning, not overturning.  It enables continuing development, sets aside land for natural forest and supports conservation.

As the forestry minister has observed, Indonesia cannot afford a permanent moratorium.  “Where will the jobs come from?” he asked.  The President wants annual economic growth climb to 7 percent. That won’t happen if growth in the agro-forestry industries is halted.

The Greenpeace methods are, as usual, disreputable. Its report on Sinar Mas is a standard Greenpeace production, dressed up with 100 references and 300 footnotes to give credit to a deceit of verisimilitude.  Its purpose is to color the campaign to pressure business partners to eschew dealings with Indonesian companies.

Its manner is also culturally offensive. This report employs a gambit previously used against Malaysian companies. They are attacked as secretive and conspiratorial. The key evidence?  The companies are privately-owned, family companies.  That is the model on which most major locally-based companies have developed in Asia.

Greenpeace has also the gall to describe executives of businesses who will not bend to its demands they cease trading with the targets of its campaigns as “forest criminals”. It has a long record of branding businesses as illegal on the basis of unsupportable and unverifiable claims.

If any allegation of crime were to waive around it would be that the Greenpeace campaign against Indonesia’s pulp and paper and palm oil industries is a “crime against poverty” for an increase in poverty would be an indubitable outcome if Greenpeace’s strategies were adopted.

A reduction in expansion of palm oil production would mean a fall in the availability of a low cost food staple for the poor in Asia and Africa.

Greenpeace has got cocky. In the US it likes to describe itself as “the bad cop” and brags it can devalue company brands and reputations.  But others are starting to see it for what it is. Recently the New Zealand Charities Commission revoked its charitable status. It ruled Greenpeace was a political organization that used illegal methods.

It is therefore unsurprising Greenpeace should be insensitive to Indonesia’s history. The Dutch colonial era during which the Dutch East India Company operated its mercantilist version of the “White Man’s Burden” more for the benefit of shareholders in the Netherlands than the people of the archipelago still rankles.

Yet Greenpeace today cajoles multinational corporations to partner it in a campaign to visit on their descendants the Green Man’s Burden. And to cap all this off, its annual reporting shows campaigns in Southeast Asia have been funded by revenue deriving from Dutch gambling.

It is therefore unsurprising Greenpeace should be insensitive to Indonesia’s history.

The writer is chairman of World Growth, an NGO based in Arlington, Virginia.