Press Release: Immediate Release 17 November 2006

Indonesian Palm Oil production blights the poor:

major reforms needed, claim two new reports released today

Two new reports from the NGO Sawit Watch and partners, released today, expose the serious injustices caused to indigenous peoples, local communities and smallholders by the way oil palm plantations are being developed in Indonesia. The two studies show how the lives of tens of millions of Indonesians affected by the oil palm sector are blighted by laws, policies and practices which systematically limit their rights and prioritise the interests of estate companies, often backed by foreign investors.

The studies have been released just prior to the 4th Roundtable meeting of the Roundtable on Sustainable Palm Oil (RSPO), which meets in Singapore on 21st – 23rd November. The RSPO is made up of the major companies in the palm oil sector, as well as social and environmental NGOs, which have agreed the need to reform the sector so it meets international standards on the environment, human rights, workers’ conditions and best management practices. The RSPO standard was adopted at the 3rd RSPO Roundtable (see ).

Indonesia has already established some 6 million hectares of oil palm plantations, mainly in cleared forests, and regional plans provide room for a further 20 million ha., the first report, based on detailed legal study and field surveys of six operations in three provinces, shows(1). Most of this area is the customary land of indigenous peoples and local communities. Indonesian laws and land acquisition procedures provide these peoples with very weak protections. In the name of the ‘national interest’, communities are being forced to give up their lands against their will and without getting adequate compensation. As a result conflicts between oil palm plantations and local communities are widespread and growing.

The second study (2), based on workshops and interviews with smallholders from several estates in East and West Kalimantan, was undertaken to assess how the RSPO standard fits smallholder realities in Indonesia. The study shows how local farmers, forced to relinquish their lands to plantations, only get back small proportions of their lands as oil palm smallholdings and then find themselves encumbered by substantial debts, which they take up to 20 years to pay off. Farmers complain of low prices, unclear financial arrangements, poor infrastructure, inadequate training and serious social problems on the estates. Their situation is clearly at odds with the RSPO standard. There are about 4 million smallholders and their families on these estates in Indonesia, it is estimated.

Said Rudy Lumuru of Sawit Watch, who is also a member of the RSPO Executive Board:

Palm oil sales are growing rapidly. The market for edible oils will double in the next 15-20 years and new markets for biofuels will further increase demand. Overseas companies and consumers want to be reassured that they are not causing harm – to forests and people – when they choose where to buy palm oil. What we have found is that most companies in Indonesia are producing palm oil in ways quite contrary to the international standard agreed by the industry through the Roundtable on Sustainable Palm Oil. The problems are as much in the laws and policies as in the way companies choose to operate. So we are calling on our government to overhaul the legal and policy framework so people’s rights are protected and we are calling on the companies to raise their game. Otherwise conflicts in concession areas will only get worse and investors will stay out of the country because of the risks. Development without justice is not development it’s exploitation!

Two new publications:

1. Promised Land: Palm Oil and Land Acquisition in Indonesia – Implications for Local Communities and Indigenous Peoples by Marcus Colchester, Norman Jiwan, Andiko, Martua Sirait, Asep Yunan Firdaus, A. Surambo and Herbert Pane (2006) Forest Peoples Programme, Sawit Watch, HuMA and ICRAF, Bogor (also available in Bahasa Indonesia).

2. Ghosts on our own land: oil palm smallholders in Indonesia and the Roundtable on Sustainable Palm Oil by Forest Peoples Programme and Sawit Watch, Bogor (2006) (also available in Bahasa Indonesia).

Downloads available on and

For more information and hard copies of the report:

Sawit Watch Tel: 0251-352171

Forest Peoples Programme Tel: + 44 1608 652893

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  1. Great argument Dr Yusof! While lppeoe are attacking palm oil on being unsustainable and harm the environment whereas the real truth is, oil palm is the most productive oil crop which produces most yield per hectare. By rejecting palm, it means more lands will be deforested to plant soy or rapeseed or corn etc. But the NGO network is too big I’m afraid. They are interconnected and influential. Thorough strategy and investment must be made especially on the internet to clear all these false allegations made and protect Malaysia’s most precious commodity.Great article Dr Yusof. Please continue writing and share the world your take on palm oil.

  2. propaganda of vested cneorrs. Facts narrated in the blog of Dr. Yusuf Basiron, CEO of MPOC, covering various aspects of palm oil with authentic and scientifically proven information and data has been contributing greatly to dispel the said propaganda against palm oil. Presently, as gathered, about 30% of global requirements of oils and fats is being met-up by palm oil with competitive price contributing to stabilize the price of oils and fats and it is being possible because of its highest acreage yield. What would happen if there had been no palm oil and how the present global demand of 170 million tonnes of oils and fats could have been met-up?”

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