Palm Oil: A Product That’s Popular Yet Problematic

Event Date: 

Thursday, June 1, 2017 - 12:00am

Event Date Details: 

Further reading:

“ABD Climate Operations Reach a Record $3.7 Billion in 2016.” Asian Development Bank, February 8, 2017.

Butler, Rhett A., and Lian Pin Koh, and Jaboury Ghazoul. “REDD in the red: palm oil could undermine carbon payment schemes.” Conservation Letters, (2009).

Economic Impacts. Sustainable Palm Oil Transparency Toolkit.

Koh, L. P. and Wilcove, D. S. “Is oil palm agriculture really destroying tropical biodiversity?.” Conservation Letters, (2008).

Obidzinksi, Krystof and Rubeta Andriani, Heru Komarudin, and Agus Andrianto. “Environmental and Social Impacts of Palm Oil Plantations and their Implications for Biofuel Production in Indonesia.” Ecology and Society, (2012). Volume 17, Issue 1, Article 25.

Overview of RSPO. Roundtable on Sustainable Palm Oil.

Palm Oil. Indonesian Investments. Last modified February 2, 2016.

Palm Oil. Say No to Palm Oil.

Smallholders. Sustainable Palm Oil Transparency Toolkit.

Social Impacts. Sustainable Palm Oil Transparency Toolkit.

Swanson, Tim and Ben Groom. “Regulating global biodiversity: what is the problem?” Oxford Review of Economic Policy, Volume 28, Number 1, (2012).

“Ubiquitous Palm Oil: Products with Palm Oil and Its Derivatives.” Schuster Investigations.

Susu cooperative palm oil production. The clan are self-sufficient and manage the land sustainably. They produce food to sustain themselves but also harvest cash crops like palm oil, rubber and sugar cane for income.

Susu cooperative palm oil production. The clan are self-sufficient and manage the land sustainably. They produce food to sustain themselves but also harvest cash crops like palm oil, rubber and sugar cane for income.


By Natasha Tandler

Would you be surprised if I told you that Pop-Tarts, Kit Kats, and Oreos have more in common than being so dangerously delicious that they can harm your figure if not eaten in moderation?  Well, there is another hidden element all of these products contain that causes far worse consequences than just giving you a few unwanted pounds.  Their secretly destructive common ingredient is called palm oil.     

Palm oil is a highly sought-after natural resource because it is used in many food products, cosmetics, car lubricants, biofuels, and vegetable oils.  Indonesia produces the largest amount of palm oil in the world and has profited substantially from its production.  About two to three million Indonesians are employed because of this flourishing industry.  In 2010, palm oil accounted for 12% of Indonesia’s exports, which equated to a value of 14.8 billion U.S. dollars.

Unfortunately, the production of palm oil comes with significant social and environmental costs, resulting in the creation of what is called “conflict” palm oil.  Specifically, indigenous lands have been destroyed to create more palm oil plantations.  Numerous reports have exposed poor working conditions, child labor exploitation, and inadequate wages at many palm oil plantations in Indonesia. 

The effects of palm oil plantations upon the environment in Indonesia have been disastrous.  To create more space for palm oil production, widespread deforestation has occurred throughout the country.  Researchers Koh and Wilcove found that from the years 1990 to 2005, at least 56% of palm oil expansion in Indonesia occurred at the expense of forests.  This deforestation emits tons of greenhouse gases into the atmosphere by inhibiting the earth’s natural ability to sequester carbon to help fight against the effects of climate change.  Not surprisingly, Indonesia is the third largest greenhouse gas-emitting country in the world, just behind China and the United States.

Another adverse consequence of deforestation caused by palm oil production in Indonesia is the loss of biodiversity.  The non-profit Say No to Palm Oil reports that one-third of mammal species like orangutans, tigers, rhinoceroses, and elephants in Indonesia are critically endangered because of palm oil production.

In the past decade, widespread publicity generated by journalists and environmental nonprofits about the negative side effects of the palm oil industry in Indonesia has resulted in many consumers putting tremendous pressure on this industry to make significant changes. There are currently two proposed solutions and both must be implemented to the fullest extent possible.

The first solution is to get rid of “conflict” palm oil and replace it with “sustainable” palm oil.  In 2004 the Roundtable on Sustainable Palm Oil Production (RSPO) was created and in 2008 established various social, economic, environmental, and legal requirements for palm oil to be considered sustainable.  If a palm oil plantation meets these standards after review by a third-party auditor, the plantation can receive an RSPO certificate for producing sustainable palm oil.

Different stakeholders such as the Indonesian government, Indonesian small landowners, multinational corporations with palm oil plantations in Indonesia, and environmental non-profits have come together within the past decade to try to create more sustainable palm oil production in Indonesia.  Despite these efforts and updates to the production guidelines in 2013, corruption within the RSPO has resulted in the certification of non-sustainable palm oil plantations as sustainable.  International nonprofits and organizations such as Greenpeace and the Union of Concerned Scientists thus consider the actual enforcement of RSPO standards to be ineffective and inadequate.  Many smallholder plantation owners, which make up about 40% of the total palm oil production in Indonesia, have argued that switching to sustainable methods is very costly and financially unattainable.

Another proposed solution to help end conflict palm oil production in Indonesia is to preserve forests through the REDD+ program, which was established in 2007 by the United Nations Framework Convention on Climate Change.  The purpose of REDD+ is to allow developed countries to buy credits for polluting from small landowners in less developed countries.  In exchange, these smallholders will preserve their plots of forest to help offset the overall global carbon footprint since forests naturally capture carbon. 

The problem with this solution is that it has historically been economically more beneficial for Indonesian smallholders to convert their lands for palm oil production than to preserve it for carbon credits through REDD+.  For instance, in 2009 researchers found that it was far more profitable by about $3,000 for smallholder plantation owners in Indonesia to convert a hectare of forest for palm oil than to preserve the land through a REDD+ program.

Fortunately, because of the recent historic Paris Agreement in 2016 that brought nearly 200 countries throughout the world together to help fight climate change, many developed countries that wish to meet their emissions goals are more likely to invest in REDD+ programs in the coming years. 

In fact, the world is already seeing an increase in climate finance investments.  The Asian Development Bank recently reported that it approved $3.7 billion in climate finance investments in 2016, marking a 42% boost from 2015.

Money from increased climate finance should be used in Indonesia to support stricter enforcement of RSPO standards and REDD+ programs in Indonesia.  It could dramatically help Indonesian smallholders make their production methods more sustainable and improve the auditing process of RSPO standards, thereby creating more sustainable palm oil.  Climate financing could also finally make REDD+ programs in Indonesia more financially appealing to small landowners to participate in, which will help preserve more of Indonesia’s forests and rich biodiversity.

However, money alone will not resolve this issue.  Activism is necessary.  You can make a dramatic impact as a consumer of palm oil by writing complaint letters to companies that do not use sustainable palm oil and educating others about this issue through social media.  You can also donate your money to worthy organizations like Say No to Palm Oil, the World Wildlife Fund, and Greenpeace.  These small actions will help create significant beneficial effects that will eventually make the popular product of palm oil not so problematic.