Local reports out of Central Kalimantan in Indonesian Borneo indicate that wild fires which have raged out of control for over two months, are still out of control despite the heroic efforts of local firefighters. The resulting smoke from these fires have caused a haze so thick that in the provincial capital city of Palangkaraya, the Air Quality Index has reached over 2500 ppm. To understand what this means, this rates anything over 300 ppm as hazardous to US citizens.
Environmental Protection Agency
Indonesia's neighbors are choking on it too. Malaysia closed 7,000 schools earlier this month due to an unhealthy level of air pollutants which it pegs at 500 ppm. Singapore which is downwind of peat fires in Sumatra is feeling it too but the spotty coverage by Western media has been disappointing considering that the forest fires in these few months could equal to the total annual carbon emissions of the UK.
I guess an event that takes place every year for the past two decades is not exactly that newsworthy. The official types behind the palm oil industry in Indonesia certainly seem to share that opinion. At a time when the country is struggling to contain the fires, Indonesia together with Malaysia recently launched the CPOPC or Council of Palm Oil Producing Countries.
The newly formed Council wasted no time in letting the world know what its intentions are. See, the biggest palm oil producers in Indonesia created a group last year under the "Indonesian Palm Oil Pledge" (IPOP). Their members control some 80% of all the palm oil produced in Indonesia. One of the four pillars which they subscribed to, is the sticky issue of new developments on peat lands. The type of development that has been blamed for forest fires, emitting copious amounts of CO2 and tarnishing the image of palm oil.
Yet the main statement made by CPOPC was to demand that IPOP back up from its pledge of no deforestation.
The global economic slowdown has hurt the palm oil industry's bottom line and CPOPC was also seen as a means of controlling market pricing. I imagine they see the new council as OPEC-like where the Organization of Petroleum Exporting Countries controlled market prices of black oil for the longest time.
I'm not sure how CPOPC saw their newly formed cartel as being capable of controlling palm oil prices globally. OPEC's control over oil prices has eroded as non-OPEC countries like the US have been able to join the ranks of the world's largest oil producers.
Similarly, palm oil already faces stiff competition in the global market for vegetable oils from soy and rapeseed. How well the industry does depends on pricing on the commodities market and that is controlled more by how strong or weak the harvests of these competing vegetable oils are, not how sustainably they're produced.
Sustainability measures mean little in the global market for vegetable oils where price is king.
As Prabianto Mukti Wibowo, assistant deputy minister in the Economic Affairs Ministry, puts it:
"...deforestation is a rich-country concern. We know that our primary customers are not concerned about deforestation."
Indonesian Minister Rizal Ramli in a recent speech to Parliament was quoted as saying :
"This is an example of how to fight for our sovereignty. We are the biggest palm oil producer. Why (should) the consumers from the developed countries set the standard for us as they want?"
Malaysia's Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah,was more diplomatic in saying:
Producer and consumer countries working together can ensure a sustainable and equitable system of production and compensation when imposing sustainability requirements.
The Indonesian ministers are right to assert that small palm oil consuming markets like the US or EU should not be imposing standards on all of their production. So why the fuss? They should just show these small but demanding customers the door. But that would be to cut out the only market that is willing to pay a premium for better palm oil currently being certified by the Roundtable on Sustainable Palm Oil(RSPO). More importantly, these top producers of palm oil today have their sights on renewable energy in the US and EU.
Palm oil has potential to be a better feedstock for bio energy when compared to wood sources. Trees maybe a renewable source but what is happening to forests in Southeastern USA should be of major concern. Palm oil certified under the RSPO RED scheme has already been approved by the European Commission. However, the RSPO standard is also considered too stringent by Malaysia and Indonesia which caused them to create their own national standards in the Indonesian Sustainable Palm Oil Scheme(ISPO) and the Malaysian Sustainable Palm Oil Scheme(MSPO) which are now, being grouped together under the new CPOPC!
Will this new approach on a government to government level work to convince the EU or the US that the palm oil being produced is "sustainable?" The Environmental Protection Agency disqualified palm oil under the Renewable Fuel Standard(RFS) in 2012 due to the emissions from disturbing peat lands for plantations. The debate continues today and the great haze of 2015 is sure to give critics of palm oil as a biofuel strengthened arguments against it.
Personally, I think the CPOPC is over reacting to industry's pledges towards producing better palm oil. Between the hard-nosed stances of environmental groups like Greenpeace and the governments of Indonesia and Malaysia, is a new study to be released soon. Funded by palm oil giants Sime Darby and the world's largest single user of palm oil, Unilver among others, this study will propose a platform for producing better palm oil that should be accepted by all parties including CPOPC and IPOP.
Time to quit the Nero drama.
Acceptance by CPOPC will be most important. Environmental groups and privately held companies can set all the standards they want on paper. If governments reject those standards, we will see Borneo and Sumatra continue to burn along with the arguments.
Something else to keep in mind about saving tropical rainforests through green standards that do not have government support is that even if members of IPOP walk away from developing high carbon stock forests, it does not mean these forests are saved. As Musdhalifah Machmud, deputy minister for food puts it,
Part of our country we have to protect for forests, and the other part we have to do some economic activity so the people around it can improve their prosperity... if you don't like it, no problem. Another company will come to develop it.
We can find some comfort in knowing that we, from "rich countries" were not a cause for deforestation but that does not mean we saved forests in any way.
As a consumer myself, I look forward to having deforestation free products to buy for my family. The conversations on making this happen is not new. The Consumer Goods Forum which is made up of 400 retailers and manufacturers from 70 countries has had a position on this since 2010 through their zero net deforestation 2020 pledge.
Here's hoping that CPOPC and IPOP remember that the Consumer Goods Forum is worth several trillion dollars. Zero deforestation was a fun party while it lasted. Its time to recover from it and go back to work at zero net deforestation and save some forests.
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