Palm oil is, needless to say, a controversial commodity. Like its ilk, it elicits concern for the problematic impact it has on workers who grow and harvest the oil palms, the environment, and, more to the point for Southeast Asia, the resulting haze its production periodically inflicts on people on both sides of the Malacca Strait. Poor working conditions, use of under-aged laborers, and abuse of indigenous rights regularly feature in reports on oil palm plantations in the region. Expansion of these plantations, often by means of starting haze-generating fires, means habitat degradation and wanton conversion of peat and forest land.
Yet, outside of activist circles, attention to the dysfunctions of the palm oil industry in Southeast Asia is both fleeting and selective. The spotlight gets turned off as soon as the almost yearly haze subsides in regional cities like Pekanbaru, Singapore, and Kuala Lumpur. Moreover, blaming supposedly ignorant rural workers for starting the forest fires sidesteps the question of who ultimately owns these rapacious plantations and how to bring about economically viable alternatives in places where the forest fires recur. After all, the companies that own these plantations remain proudly listed on stock exchanges across Southeast Asia, and palm oil agriculture plays a major role in generating rural employment in Indonesia and Malaysia.
Similarly, a punitive but ultimately insufficient approach is taking root in Europe on the issue on palm oil. In response to continued deforestation and as a leverage on countries that produce palm oil—Indonesia and Malaysia produce around 85 percent of the world’s palm oil supply—European governments started pushing for a ‘fully sustainable palm oil supply chain’ with the 2015 Amsterdam Declaration. The European Union’s recently issued Renewable Energy Directive, as our first Spotlight article this week highlights, is a direct outgrowth of this pushback against palm oil. As author Khalil Hegarty points out, this set of regulations is only one instrument at the EU’s disposal for curbing palm oil imports.
If the Europeans are sincere about rolling back deforestation by restricting the demand for the end product of what originally instigated the loss of forest land, they will need the help of market forces. In our second Spotlight article that first appeared on Mongabay, Glenn Hurowitz, CEO of Mighty Earth, a campaign organization that works to protect the environment, points out that companies that heedlessly cause deforestation respond to what the market demands—rather than to some edict out of Brussels or other capitals. This was the case with deforestation in Brazil, and he argues that such companies will respond similarly in Indonesia and Malaysia provided the same pressures on their bottom line.
Some will find absurd the idea of using the market in the service of the environment, but that stance may be more ideologically driven than a careful reflection of what works and what does not. Even companies that care little for the environmental effects of their operation pay attention to market demands because the latter determine the companies’ financial performance. If we can translate this idea into practice, it is worth a try. Money is a good servant but a bad master, Francis Bacon wrote. It is time we let the pursuit of it serve the environment in Southeast Asia.
