Lake Sentarum is surrounded by oil palm plantations. Photo courtesy of Ramadian Bachtiar/CIFOR.

BOGOR, Indonesia (21 June, 2011)_Developed countries’ biofuel mandates aimed at mitigating climate change have added pressure on Indonesia’s forests and communities that depend on them. A study by CIFOR’s Elizabeth Linda Yuliani published in the Borneo Research Bulletin shows that many communities in and around the Danau Sentarum National Park on Borneo island are worse off when forests are logged to cultivate oil palm, a crop that is touted for lifting Indonesians out of poverty.

When global demand for palm oil soars, Indonesia, as the world’s biggest producer of the crop, is the first to feel the effects, both economically and environmentally.

While the food market represents the biggest demand for palm oil, biofuel mandates implemented to reduce global carbon emissions are increasingly driving deforestation in Indonesia. Fluctuations in the price of competing biofuel and fossil fuel, the price of crude oil price and climate variations also push demand. People in rural Indonesia are returning to fuelwood by logging.

The  biggest consumer of Indonesian biofuels is the European Union, which aims to shift 10 percent of its fuel consumption to biofuel by 2020. The United States aims to use 136 million cubic metres of biofuel by 2022. While it sources most of its biodiesel from homegrown corn and soy from Brazil, its high targets have boosted prices for all energy crops globally. The Indonesian government has also set a goal to increase biofuels to 3 percent of energy by 2015 (9.84 million kiloliters) and 5 percent by 2025 (22.26 million kiloliters).

“The demand for biofuel is growing,” said Yuliani, head author of “Biofuel policies and their impact on local people and biodiversity: a case study from Danau Sentarum”.

“This growing demand is used by investors and the government to justify the establishment of new plantations or the increase of the crude palm oil export target. We don’t have exact data of how much crude palm oil is used for biofuel,” Yuliani said.

The adverse effects of palm oil expansion in Indonesia is pronounced in Danau Sentarum, four kilometres south of the Malaysian Borneo border in West Kalimantan.

The park consists of interconnected seasonal lakes, interspersed with swamp, peat swamp and lowland forests, with a 65,000-hectare buffer zone. It is home to around 10,000 mostly Malay and some indigenous Iban Dayak people, who depend on the fish and other forest resources for their livelihoods. It is also biodiverse, a habitat for an array of fish, mammal species and bird species. In 1997, the park had about 2,056 Bornean orangutans, 15 to 20 percent of Borneo’s total orangutan population.

According to Yuliani’s paper, communities’ customary forests have been taken over by palm oil companies, which have failed to pay any compensation, and in many cases, have left without fulfilling promises to provide employment and improve living standards. None of the palm oil plantations in the area have flourished, and when companies have fled, communities are unable to replant as the fertile topsoil had been removed.

The livelihoods of local people of Danau Sentarum that depend on traditional fishery and ornamental fish farming are threatened by the ever expanding oil palm plantations. Photo courtesy of Riak Bumi NGO.

“Communities inside Danau Sentarum National Park depend on the park for a livelihood fishery, therefore oppose the oil palm permits granted by the district government. They are worried that land clearing and large scale plantations in the area surrounding the park will cause significant changes to the water system, subsequently the fish. The communities have a good understanding on the impact of chemical pesticides and fertilisers, and the effects on fish.”

Around 40 percent of people outside the park, however, expect cash income from oil palm development and therefore support it. Some supporters included those who could gain financially from  handing over land rights, employment in the oil palm company and in infrastructure development, involvement in a nucleus estate program, and jobs in local businesses, such as groceries, small shops and cafés, and accommodation and car rental services. Ex-illegal loggers too support palm oil development, Yuliani said.

The Danau Sentarum forest was declared a national park in 1999, but in mid-2009, officials were yet to mark boundaries. In 2007, the local government in the Kapuas Hulu distrcit  gave permits to between 18 and 21 oil palm companies, covering 259,500 to 366,823 hectares.

The study shows that a number of mechanisms have been used by palm oil companies to circumvent forestry and land laws, including trickery by brokers. One company in 2008, for example, was able to evade obtaining a permit by sending loggers from surrounding districts to targeted locations and cut down large trees. Once they had done that, the forests was reclassified as “non-forest”, which meant the company was no longer required to obtain a permit.

Adding to the problem is the lack of law enforcement, ambiguous and inconsistent policies, and conflict both between communities and between the communities and the government.

“European countries should only import biofuels and feedstocks from countries whose governments, at all levels, have proven good governance in all relevant sectors and strong law enforcement, and have implemented good programs and policies on conservation and sustainable natural resources management,” Yuliani said.