Indonesia’s oil palm dilemma: people, profit, and planet

Indonesia with a land area of ​​more than 180 million hectares is the largest tropical archipelago in the world, with high rainfall along the year, soil suitability relatively unconstrained to all kinds of tropical plants, as well as 360 days without climate barriers conditions compared with four seasons countries in general, so that the region is a very suitable location for development of plantation industries such as oil palm plantations.

At the same time growth in global demand for palm oil is increasing from year to year, mainly from China (20.2 million tons in the year 2004 [1]), India (16.5 million tons in the year 2004 [1]) and Europe (10 million tons in the year 2009 [2]). European and other government encourages the use of biomass as fuel (biofuel) in transport and power generation to meet Kyoto protocol commitments. Biofuel is carbon neutral compared with fossil fuel now promoted as a solution to face the phenomenon of global warming.

Government of Indonesia has issued several regulations related to the development of oil palm plantation industry as Environmental Regulations and Forestry (1997) and Regulation Plantation (2004) (IPOB, 2007), and based World Rainforest Movement (WRM) The Government of Indonesia had published five types of regulation; PIR-Trans (until October 1993), Deregulation (1993-1996), privatization (1996-1998), Cooperatives (1998-2002) and Decentralization (2002-2006). In any regulatory changes, suggesting that local authorities are increasingly able to provide the license for establishment of new land and land expansion of existing oil palm plantations are even greater.

Indonesia oil palm area development and policy changes

The combination of geo-environment conditions, world demand, and the regulations of this pampering has created growth in oil palm plantations Indonesia incredible. Until the year 2010, based on satellite imagery interpretation, the area of ​​oil palm plantations that have been mature, new planting, or at land clearing condition has reached more than 10 million hectares (Ramdani, 2010) with a total production of more than 20 million tons of both estates and smallholders (BPS, 2010)

The above of condition has created an increasingly high threat not only to the existence of a tropical rain forest which is the lungs of the world, but also threaten the livelihoods of local forest-based communities, the loss of diversity of flora and fauna, increase in conflicts related to land acquisition, as well as pollution caused by the use of herbicides and the development of palm oil processing plant.

But on the other hand, the development of oil palm industry has also created jobs for the local community and contribute substantially to national income. In 2004, there were 4.1 billion dollars or about 1.7% of the total gross national income of Indonesia only from oil palm plantation industry.

Large plantation companies provide complete facilities for workers and their families, ranging from house equipped basic facilities like water and electricity, health insurance for employee and family, education facilities, as well as good road infrastructure development. Many parts of Indonesia, especially in rural areas which is the location of large oil palm plantation companies rely on these to develop their areas;  such as rural areas are located in Indragiri Hulu, Pelalawan, Siak, Rokan Hulu, and Rokan Hilir in Riau Province, as well as in, Sintang, and Ketapang in West Kalimantan.

Development of Indonesia’s palm oil industry has long been a dilemma, between socio-economic development of society, increasing national income, and declining environmental quality. The debates are due to the lack of attention of the Government of Indonesia with the decline in environmental quality, the disappearance of Indonesia’s biodiversity, and conflict that is created (land acquisition, compensation, land rights, the promises are not fulfilled by multi-national companies , etc.) and lack of awareness organizations, non-profit organization the importance of the existence of oil palm for socio-economic development of local communities and national economic growth.

To break the deadlock and come out of this dilemma, as well as in efforts to achieve industrial growth of oil palm plantations are environmentally friendly and sustainable, we propose a new strategy in the oil palm industry development; strategies based on local and national interests, while still meeting the needs of global demand. We call  SESAR (Stakeholder’s Earth Assurance and Social Responsibility).

SESAR will provide a great opportunity for local communities, scientists, organizations, non-profit organizations and government to contribute actively in the rural area, development of environmentally friendly, sustainable, and with due regard to local and national economic development. To achieve this, SESAR should focus on forest areas that have achieved joint concession between local communities, scientists, organizations, non-profit organization and government. Areas that have a high suitability of land does not mean to always be converted into oil palm plantations. Currently the development of oil palm plantations are always open primary and secondary forests, eliminating the sources of livelihood of forest communities, replacing the main agricultural lands of local and often create conflict between communities and the companies. So, SESAR in the future should focus on areas that have been achieved with concessions, NOT the primary remaining tropical forests, peatlands, mangroves, and other areas with the potential to maintain the balance of nature, biodiversity, and threaten the lives of forest peoples. Scientists are play a vital role in determining this scientifically and accurately, and can provide appropriate information to the public which are worthy of conservation land and where land can be opened as oil palm, non-profit organizations are also important in assisting and educate the local community. So in making spatial information-based spatial later, local communities have a major contribution in making the direction of development.

SESAR should be able to actively monitor the behavior of big companies of oil palm in practice, under the strict control of scientists and representatives of local communities. Here, the Government can play the rule as a policy maker and impose strict punishment if found unacceptable behavior is not sustainable and environmentally friendly. If found behaviors that are not environmentally friendly and unsustainable, the Government should give punishment in the form of financial support from the company to the local communities with amounts double from  its net profit last year of production.

SESAR is indepenent Agency, a non-profit and must contain free of interest scientists from various fields such as environmental experts, geography, sociology, economics, bio-technology, chemistry, hydrology and geology. The experts are appointed by the University as the best representative, who later was appointed by the Government. These experts will issue certificates of SESAR that passes by the Government if the company is able to demonstrate management of the oil palm industry is environmentally friendly and sustainable as well as open jobs opportunity for the local community and is committed in developing areas where oil palm plantations will be located. Any company that would exploit land resources for commercial purposes must have this certificate.

However, the biggest challenge is in the Government side, whether they will have a true commitment to creating rules that can keep the balance of nature and growth of local communities and national economies at the same time, or even siding with the interests of capital owners and meet the global demand for it?

The government should create policies that can encourage people to think of creative and innovative in improving conditions for socio-economic and environmental sustainability in the long term. Relying only on palm oil alone is very unsustainable manner, because the optimal age of palm trees less than 20 years. After 20 years it will stop producing high quality of fresh fruit bunches, and small farmers are generally going to cut palm trees, let shrubs grow and can become a fire wick on a long dry season. While multi-national companies with large capital will continue to seek new land for oil palm plantations, until 2011 the location of oil palm plantations has reached Papua island, the interpretation of satellite images using Landsat 7 ETM + indicates the total area of ​​oil palm in West Papua is ​​16,798 ha and East Papua area is 76,760 ha (Ramdani, 2011)

The combination of economic diversification such as freshwater fisheries, tropical fruit plantation exports commodity such as pineapples, mangoes, bananas, etc., Government regulations based local and national interests, as well as environmentally friendly and sustainable course will slowly remove the dilemma of Indonesia’s palm oil industry . Government of Indonesia must be able to work with scientists and non-profit organizations in educating the local community.

In the near future, the population will growth, demand for local food will also increase, whether the Government will feed the population of Indonesia with oil palm fruit? If all agricultural land either existing or potential are converted to oil palm plantations? Or rely on imports, which means to send more money to foreign farmers and ignore the welfare of Indonesians farmers?


[1] FAO.2006. FAOSTAT Online Statistical Service. Rome, Italy

[2] OIL World. 2010. (Oil world annual. Mielke, Hamburg)

BPS. 2010. Statistical Year Book of Indonesia 2010. Jakarta, Indonesia

Ramdani, Fatwa. 2010. Monitoring of Changes in Land Use due to Development of Plantation in Indonesia under Economic Globalization. The 5th Japan -Korea-China Joint Conference on Geography (JKCJCG). Sendai, Japan

Ramdani, Fatwa. 2011. Oil palm expansion in Papua. . Retrieved on September 11, 2011

WRM (World Rainforest Movement). 2008. Analysis on existing legislation related to oil palm plantation: Case studies from Latin America, Africa, and Asia. Montevideo, Uruguay



  1. There are many reasons to be skeptical about palm oil production and by now it’s also fairly well-documented that sustainably harvested palm oil is an exception, not the rule. I have the feeling that – in terms of securing a sustainable future – the whole biofuel boom is rather hindering the process than advancing it. It’s trying to solve a problem at one end by creating two more somewhere else.

  2. thanks for read my article and apologize for the late reply, due to many works to do.

    yes I do agree with you, from the scientist side we should find a better way for this matter, but in the case of Indonesia, political will is the most important part. We can do nothing without support from good policies practice.

  3. hello,

    i’m a student at the university of Berlin (FU), working on a paper about oilpalm plantations in indonesia from a two-fold perspective – geoecology and social anthropology. i found your graphics regarding the expansion of oilpalm in indonesia and i want to ask you, if you would allow me to use this graphic (Indonesia oil palm area development and policy changes) in my paper (of course citing you).
    I’m especially impressed about your work on oil palm in papua, the last big frontier, because i’m also working with satellite imagery on the deforestation due to plantations in southern borneo lowlands.
    thanks for your work.

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