Sawit Watch calls for EU to face up to oil palm responsibilities

Down to Earth No.82, September 2009

European countries are turning to agrofuels for energy and transport as part of their strategy to move away from fossil fuels and meet greenhouse gas emissions reduction targets. The use of palm oil as an agrofuel source has drawn strong criticism due to the severe social, environmental and negative climate change impacts, which contradict industry claims that it is a 'green' fuel.

Now, a leading Indonesian NGO has called on the European Union to face up to its responsibilities. By driving demand for palm oil, argues Sawit Watch, European states are encouraging Indonesia's oil palm plantation expansion programme, which destroys forests and peatland and causes human rights abuses and social conflict.

In a meeting with EU representatives in July, Sawit Watch called on the EU to ban imports of oil palm for agrofuel and energy until safeguards addressing social and environmental issues are in place. A statement prepared by the group also called on the EU to:

  • adopt legally binding restrictions on investments in and subsidies for the use and marketing of edible oils and palm oil-derived energy sources from unsustainable sources;
  • abandon targets for agrofuel use in member countries, such as the Fuel Quality Directive and the Renewable Energy Directive;
  • strongly support actions by governments of producer countries to ensure that EU member state companies obey Indonesia's national laws and that those which do not do so are prosecuted;
  • introduce tighter regulations on companies to ensure that they fulfil their social and environmental responsibilities.

The Sawit Watch statement highlighted Indonesia's place as the world's top palm oil producer, its palm oil industry controlling 7.5 million hectares of plantations in 23 of the country's thirty three provinces. While bringing prosperity to some, the oil palm boom has been associated with a range of serious social and environmental problems, including intimidation against indigenous peoples and local communities, detention and violent conflict.1 In January this year, Sawit Watch documented 576 ongoing land conflicts between communities and oil palm companies. Some of the social problems listed are:

  • Violation of indigenous peoples' customary rights;
  • Lack of free, prior and informed consent from affected communities and cases where consent is obtained through coercion, where customary leaders are manipulated into surrendering community land that legally cannot be sold, and where after land has been taken, the money was not paid;
  • Failure to fulfil socio-economic benefits promised by companies;
  • Violation of the terms and conditions of partnership agreements between companies and smallholder palm oil growers and indebtedness of smallholders who have not been informed of the financial arrangements;
  • Addressing community resistance to projects with coercion and the use of force;
  • Serious human rights abuses.

The failure to protect indigenous peoples' rights was noted by the UN Committee on Elimination of Racial Discrimination, which has called on Indonesia to review its laws and their implementation to ensure that they "respects the rights of indigenous peoples to possess, develop, control and use their communal lands."

The Sawit Watch statement also highlighted the significant climate change impacts of developing oil palm in peatland areas. Economic losses too were underlined: according to a 2006 study by WALHI (Friends of the Earth Indonesia) on a plantation in West Kalimantan, the conversion of 17,998 hectares of mixed use forest and agroforest into oil palm plantations, led to an estimated loss to the local people of 272.26 billion Rupiah (US$ 27 million).

Sawit Watch is calling for an agreement between the EU and the Indonesian government to ensure that the use of renewable energy derived from Indonesian oil palm is bound by principles on accountability; respect for universal human rights (including the rights of local communities, indigenous peoples, children, women and workers); biodiversity and livelihoods; based on respect for all relevant international instruments; and abstention from armed and violent security measures, police brutality and militarisation.2


The EU's Renewable Energy Directive

In December 2008, the European Union reached an agreement on the Renewable Energy Directive. By 2020, 20% of all energy used in the EU will have to come from 'renewable sources'. Also by 2020, each EU member state must ensure that 10% of total road transport fuel comes from 'renewable energy', defined to include biofuels and biogas, as well as hydrogen and electricity from 'renewable energy'. The vast majority of this is expected to be met from biofuels.

Despite intensive campaigning by civil society groups in the run-up to the December 2008 decision, the RED contains a very minimum list of 'standards' which exclude most aspects of environmental sustainability and all social aspects.

There is a very weak reporting requirement on wider sustainability issues, including social impacts, but this excludes biofuels for power generation and only applies to transport fuel use.3

According to the campaign group Biofuelwatch, there need to be strong EU measures to support sustainable and clean renewable energy such as wind and solar power, but the Renewable Energy Directive which has been agreed "is so deeply flawed that it will accelerate climate change, cause major biodiversity losses, significantly worsen the food crisis, and lead to more evictions and displacement and more land-grabbing across the global South." 4


Audit exposes World Bank failures in Wilmar case

Not only the EU, but the World Bank Group is under fire for promoting oil palm expansion at the expense of local communities and forests.

A long-running campaign to hold the World Bank to account for failing to uphold its own standards has borne fruit. An internal audit, made public in August, found that the Bank's private sector investment arm, the International Finance Corporation (IFC), went ahead with loans to the Wilmar palm oil trading group in violation of its own safeguard policies. The IFC failed to check the damaging impacts of Wilmar's subsidiary plantations which were taking over community lands and forests in Kalimantan and Sumatra.

The audit was issued by the IFC's Compliance Advisory Ombudsman and was triggered by a detailed complaint filed by the UK NGO Forest Peoples Programme and a coalition of 19 CSOs and indigenous organisations, including Sawit Watch, Gemawan and Down to Earth.

Source: FPP, Sawit Watch and Gemawan press information 10/Aug/09. For more background see DTE 76-77

For the complaint and follow-up correspondence see and

For the CAO audit report see




Objections to UK power plants

Protests have been directed against several agrofuel-based power plants in Europe in recent months, including three in the UK: in Newport, Wales, in Southall, West London, and in Portland, southern England. Blue NG, the company planning the 18.5MW Southall project, has said it would try and use domestic or even local rapeseed oil, although it does not rule out imports, provided that those are certified by 'internationally recognised certification schemes'. The company has not made any binding commitment to not use palm oil. In June 2008, the same company was granted qualified permission to build a 19.5 MW plant in Beckton, East London.5

Another energy company, VO-Gen Energy Ltd, applied earlier this year to Newport Council in South Wales to build a power station, which would burn up to 40,000 tonnes of virgin vegetable oil per year. It is clear that it will rely on imports of palm oil and possibly soya.6 Meanwhile, W4B Renewable Energy Ltd, the company that wants to build a plant in Portland, says it plans to source palm oil from Southeast Asia.

Alerted by the campaign group Biofuelwatch, DTE and others submitted objections on the grounds that the use of palm oil as a feedstock for these power plants would lead to negative impacts in producer countries like Indonesia.7

AS DTE went to press, we heard that Southall's planning committee has voted against permission for the power plan there. The planning decisions on the other cases are expected in September 2009.


RSPO Greenhouse Gas criteria

The Roundtable on Sustainable Palm Oil, the business-led multistakeholder body set up to promote certified sustainable palm oil, has acknowledged that greenhouse gas emissions must be included in sustainability criteria due to increased concern about climate change impacts of palm oil.

Oil palm plantations in Indonesia have been responsible for rocketing levels of CO2 emissions in recent years, due to the clearance and drainage of peatlands for oil palm, and the associated seasonal peat and forest fires.8

In March 2009 the RSPO set up a working group to work out how to give greenhouse gas emissions a 'clear position' in the RSPO Principles and Criteria. A consultation document which consists of a literature review and recommendations for amending the organisation's Principles and Criteria (P&C), is open for public comment until September 10th 2009.9



Earlier this year, three Indonesian companies (PT Musim Mas, PT Hindoli and PT Lonsum Tbk) secured RSPO certificates despite being involved in unresolved conflict with local communities.10 A further six companies were waiting audits for certification.11 In May, Indonesia's director-general of plantation said he hoped that ten companies would have RSPO certification by the end of the year.12

Meanwhile, agriculture minister Anton Apriyantono said the government was planning a research and development centre in Sijunjung, West Sumatra, to gather genetic resources and boost output.13



UK company involved in Aceh peat conversion

Jardine Matheson, a UK company is unlawfully draining and burning the Tripa peat swamp forest in Aceh, according to the international conservation NGO, Wetlands International.

The company is developing an oil palm plantation in a forest area which is home to endangered orangutans, and is violating Indonesia laws to protect peatland over 3m in depth as well as Aceh's 2007 moratorium on logging. The legally required Environmental Impact Assessment has never been shared with, or approved by, local institutions or community representatives.

Wetlands International and a coalition of other NGOs have written to the chairman of Jardine Matheson, owners of the oil palm developer, PR Astra Agro Lestari and have launched a public petition to stop the destruction. (See


Swiss and French companies backs Sinar Mas

Swiss NGO Bruno Manser Fund (BMF) reported in July that two Swiss banks, Credit Suisse and UBS, together with French bank BNP Paribas, are helping Indonesia's palm oil group Sinar Mas to raise up to USD 258 million in new capital.

Sinar Mas was called a 'forest and climate criminal' by Greenpeace Indonesia in a recent protest against the company's continuing destruction of carbon-rich peatland for oil palm projects.14 It is one of the companies investing in large-scale oil palm developments in Papua, raising concerns that local peoples' land and resource rights will be swept aside. Sinar Mas also owns Southeast Asia's biggest paper pulp plant.15

BMF is calling on the banks to stop their dealings with Sinar Mas. It reports that the banks have refused to publish their policy guidelines on forest-related commercial operations.16


Malaysian Indigenous Organisations call for plantations moratorium

Indigenous peoples in Malaysia issued a statement on World Indigenous Peoples Day (August 9th) calling for a stop to large-scale plantations and other extractive activities on their customary lands until effective measures to safeguard their rights and the environment are in place.17




1 The economic downturn has affected farmers who benefited from the oil palm boom - see DTE 79
2 Memorandum, 'Issues Surrounding Indonesian Palm Oil Industry' submitted by Sawit Watch, July 24, 2009 to the Delegation of the European Commission to Indonesia.
3 For full details and analysis of the RED see Biofuelwatch paper Biomass and Biofuels in the Renewable Energy Directive, January 2009 at
4 Biofuelwatch paper, as above.
5 For more information about Blue NG, see
6 For more information see Biofuelwatch alert at
7 See for example Biofuelwatch letter objecting to Portland plant at DTE's letters of objection are available upon request.
8 See DTE 79 and DTE 75, for background.
9 See$$_Draft_for_public_consultation.aspx
10 See DTE 80/81
11 See
12 The Jakarta Globe 7/May/09
13 The Jakarta Globe 7/May/09
15 See DTE 75 for further background.
16 Bruno Manser Fund Media Release 7/Jul/09
17 News release, 9/Aug/09 at