KUCHING — For eight years now, Irwan and his buffalo have worked through the neat rows of palm trees at the United Plantation in Teluk Intan, a town three hours drive north of Kuala Lumpur that overlooks the Straits of Malacca. For just less than 450 euros a month, he collects large clusters of oil-rich berries and carts them over to be processed.
From there, after the processing and refining, the bright red oil goes on to become a key ingredient of many everyday products in the West, China and India — from cookies and soaps to beauty creams, ice cream, margarine, noodles, and many ready meals. The World Wildlife Fund (WWF) estimates that approximately half the products sold in a regular European supermarket contain palm oil. Now, as last month's new EU directive imposes, all labels must specify the type of fat used in place of the previously generic "vegetable oils and fats."
Like many of Malaysia's palm oil workers, Irwan emigrated here from Indonesia. But unlike so many of his countrymen, he counts himself lucky. The United Plantation, valued at 1.2 billion euros, is one of the leading companies in the industry and guarantees its more than 6,000 employees housing, health care and a fair wage. Working conditions in the country's vast palm plantations — where together with Indonesia 87% of the world's palm oil is produced — are not the main concerns of NGOs such as the WWF, Greenpeace and Flora and Fauna International.
Consumption growth
With the increase in population and the improvement of living conditions in many developing countries, the consumption of dietary fats is destined to increase. And palm oil, thanks to its exceptional performance in comparison to other oils such as sunflower, canola or soybean, will be even more present on dinner tables around the globe.
Already it accounts for 30% of the world's dietary fat, according to Oilworld 2014's report. The top five importers of Malaysian palm oil are, respectively, India, China, the EU, the U.S. and Pakistan. In India, China and Pakistan, "interests in the certification of palm oil is virtually nil," admits a government official.
Producers have every reason to be optimistic. Enviromental groups, on the other hand, are alarmed. Palm oil production, they say, causes irreparable damage to flora and fauna — and not just in the areas where the plantations operate. Industry officials and local authorities counter by noting just how key palm oil is to the country's development.
"We have the right to grow," says Douglas Uggah Embas, Malaysian Minister for Plantation Industries and Commodities. "What we must do," he continues, "is balance the need for sustainability with development. In Malaysia, this is what we're doing."
The minister insists that no palm oil is produced here illegally by burning down the rainforest. The government's intention is to become a fully developed country by 2020 and this involves palm oil — currently 6% of the GDP and 10% of exports. The goal is to increase production by another 10 million tons (totaling 30 million) of oil by 2020.
How? By increasing productivity and deforesting, says Alfred Jabu Anak Numpang, the deputy prime minister of the Malaysian state of Sarawak. This state, on the island of Borneo, is one of the most undeveloped areas in a country whose economy depends largely on mechanical and electronic exports. But this is also the most pristine area from an environmental point of view: 81% of the land is covered by forest.
Within the next six years, the acreage will increase by one million hectares, mainly palm groves. "Palm cultivation allows small land owners to improve their conditions and send their children to school," Anak Numpang says during a meeting in Kuching, the capital of Sarawak. He promises that the palm oil expansion will not affect old growth forest or the endangered species, including orangutans, that live there. Orangutans, a great ape species, are native to Borneo and Sumatra.
Is Anak Numpang's word enough to protect the island's environment? Who will guarantee this? One group that has had some success is RSPO, an organization that brings together environmental NGOs and large buyers of palm oil — such as Unilever, the world's main "palm consumer," and Italian company Ferrero, which among other things produces Nutella — and certifies that production is sustainable. The criteria, however, is extremely stringent and is only applied to 1.2 million of Malaysia's total 5.1 million hectares of palm groves.
Many manufacturers don't support the rigid commitments and controls — not to mention their costs — imposed by the NGOs. Local governments, in the meantime, have openly accused the environmental groups of "preventing the development of Sarawak." At the end of the day, the market is the market. It's also true that outside Western countries, sensitivity to the health of orangutans is very, very relative.
