The palm oil paradox: What Asia can learn from Gabon

While Indonesia and Malaysia have already driven large-scale deforestation to advance their oil palm ambitions, there is still time to optimally pinpoint areas for future cultivation, as opposed to continuing its ecological rampage.

21 January 2020 ·   7 min read

The palm oil paradox: What Asia can learn from Gabon

Accounting for roughly one-third of the world’s annual vegetable oil production, palm oil — cultivated in the Asian, African and Latin American tropics — constitutes the most widely consumed, traded and high-yielding vegetable oil commodity in the world. The controversial cash crop, native to West Africa, is cheap to produce, generates five to eight times more oil per hectare than other oil crops such as soybean, sunflower and rapeseed, and is ubiquitous, found in everything from processed foods, cosmetics, biofuels and candles, to soaps and detergents.

To put its pervasiveness into perspective — about 50% of products stocked in supermarkets contain palm oil. In response to its multifarious uses and growing market demand, the global extent of palm cultivation has increased exponentially, with 75% of production traded internationally. The global palm oil industry, valued at $65.73-billion in 2015, has been projected to reach a staggering $92.84-billion by 2021.

Such predictions alone are enough to strike despondency, or catalyse anti-dystopian demonstrations, among those more environmentally inclined. The unrelenting rise in the demand for palm oil drives ongoing deforestation at a devastating scale, resulting in the widespread loss of biodiversity and natural habitats — threatening extinction of countless species of flora and fauna that cannot exist within palm monocultures, and a reduction in ecosystem services — for example, the rapid degradation of the dwindling carbon sinks provided by tropical rainforests results in the emission of trapped carbon into the atmosphere, exacerbating the current climate crisis calamity.

There is growing opposition to palm oil plantations led by organisations such as the “Free from palm oil” movement trending among millennials. But simply boycotting palm oil consumption, which would realistically prove a gargantuan undertaking given the crop’s omnipresence, may not prove the most judicious of pursuits.

In Africa and Southeast Asia, the oil palm industry generates jobs, expands the corporate tax base and promotes social investment in poor agrarian societies. Aside from the economic ramifications boycotting would pose on producing nations, the cultivation of alternative oil crops (such as soybean, sunflower or rapeseed) would engulf significantly greater volumes of land, leading to more extensive deforestation. The direction of the discourse, therefore, needs to shift — if the palm oil industry cannot be usurped, how can its continuation be made more sustainable? The Central African nation of Gabon may provide the necessary insights.

But first, let’s look at Asia…

Although the oil palm is native to West Africa, Indonesia and Malaysia account for 85% of the global palm oil industry. The expansion of oil palm croplands into tropical forest biomes in Indonesia is catalysing the loss of tropical forest biodiversity at a distressing rate of more than 1% a year. This trend is particularly pronounced in Southeast Asian countries, such as Indonesia and Malaysia, in which government subsidies have underpinned the recent proliferation of oil palm agriculture.

The widespread encroachment of large-scale oil palm plantations into forest habitats has resulted in Southeast Asia’s orangutan, elephant, rhinoceros and tiger populations being classified as either “endangered” or “critically endangered” on the IUCN Red List. The future of the critically endangered Sumatran Orangutan (Pongo pygmaeus), which has become the symbol of the anti-palm oil movement, remains highly uncertain despite the widespread publicity directed to the species’ plight in recent years — it has been estimated that this species, which currently comprises a population of 6,600 and a habitat of 8,000km2, has lost about 90% of its natural habitat in the 20th century alone, and continues to lose an estimated 50km2 a year to encroaching oil palm plantations.

Between 2001 and 2018, Indonesia had eradicated 26 million hectares of forest, representing 16% of its tree cover — the logging and burning of forests, including those located on carbon-rich peatland, accounts for nearly 50% of the country’s greenhouse gas emissions. Borneo, an island territory shared by Indonesia and Malaysia, cleared 26 million hectares of forest, comprising 39% of its tree-cover, between 2000-2018.

Where oil palm pursuits are concerned, the contention between economic development and environmental preservation has for a long time presented itself as a simple dichotomy. Yet oil palm cultivation need not necessarily strand one at a sustainability impasse — Gabon successfully demonstrates that there is opportunity to unite economic growth imperatives, through sustainable oil palm pursuits, with a financially lucrative conservation agenda.

Gabon’s palm oil paradox

In tropical Africa, oil palm cultivation is being pursued as one of the last recourses to economic security for the rural poor. Such is the case in Gabon. With about 88% of the country covered by tropical rainforest, Gabon is the second-most forested country in the world and a biodiversity mecca.

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These forests, 11% of which have been accorded national park status, are inhabited by about 700 bird species, 320 species of orchids and a vast array of fauna including chimpanzees, gorillas, mandrills and elephants. The country is also one of the richest in Africa, with a GDP per capita of $8,029 — owing in large part to its oil-generated wealth and tiny population of 2.1 million.

The country is, however, characterised by high levels of income inequality, with one-third of the population living below the poverty line, and an unemployment rate of 26%. An over-reliance on oil exports has resulted in an underinvestment in the agricultural sector — about 50% of Gabon’s GDP stems from its oil reserves, 46% from the industry and services sector and only 3.6% from agriculture.

Consequently, 60% of the food consumed in the country is imported. Commercial agriculture — including oil palm cultivation — therefore presents an opportunity to diversify the country’s economy while addressing the country’s dire inequality (through job creation), reducing food imports and boosting food security.

The paradox, however, lies in the country’s resolve to sidestep the palm oil plague that has, due to years of unbridled cultivation in Southeast Asia, become synonymous with this industry.

With respect to oil palm cultivation, Ali Bongo Ondimba, the president of Gabon, has refused to view economic progress and sustainability as incompatible, competing agendas. Commencing in 2009, the government of Gabon entered into a 40-60% public-private partnership with Singaporean agribusiness giant, Olam.

Olam Palm Gabon at present manages a concession area of 144,000ha of which 72,000ha comprises protected high-carbon-value forest, savannah and wetlands. In November, 2019, the company’s fourth plantation was certified by the Roundtable on Sustainable Palm Oil (RSPO — at present, the strongest certification scheme for sustainable palm oil certification), bringing its total RSPO-certified area to 112,455ha — 78% of its concession area. The company has committed to pursue no further development or expansion until achieving its 2021 target of full RSPO certification for all its plantations.

It is worth noting that Gabon’s Land Use, Land Use Change and Forest (LULUCF) sector (a greenhouse gas inventory sector that measures emissions emanating from land use) accounts for more than 90% of the country’s carbon emissions– strategies limiting deforestation, therefore, are of paramount importance given the country’s commitment to reduce its emissions by 50% (compared to 2005) by 2025.

Taking into account the conflicting demands on the country’s land, the government of Gabon, in partnership with the Central African Forest Initiative, formulated the country’s National Investment Framework to promote a low-emission sustainable development agenda, something that few oil palm-producing countries have endeavoured to do. It is within this framework that the country’s National Land-Use Plan, formulated to optimise the allocation of oil palm concession tracts, and its National Observation System for Natural Resources and Forests, which integrates satellite data with on-the-ground observations to track changes in forest cover, have been developed with the overall objective of reducing emissions from the LULUCF sector.

Furthermore, owing to Gabon’s significant strides towards preserving its forests, the Central African Forest Initiative successfully brokered a 10-year REDD contract with Norway in September 2019, wherein Gabon is set to receive $150-million for both limiting its greenhouse gas emissions from deforestation and forest degradation, and for the carbon sequestered by its forests. This agreement provides the country with a significant financial incentive by setting the floor carbon price at $10 per certified tonne, double the normal price under REDD schemes. Gabon will be the first African nation to earn millions in result-based payments for conservation.

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Despite the fact that REDD is, by some, considered a controversial carbon-offset mechanism, particularly in that it fails to sufficiently address social factors in assigning economic value to forests, the fact remains that limiting the use of forests maintains carbon balance.

Furthermore, within the context of a densely forested country like Gabon, where only 7% of the land (excluding urban areas) is unforested, it is both impractical and unfair to restrict development to zero-deforestation pathways, particularly where the development of an agricultural sector is linked to the development of pro-poor livelihood strategies.

What has been traditionally presented as a simple dichotomy — development versus conservation — needs to be reformulated into a more nuanced discussion wherein society and the environment are not perceived as isolated sectors, and where human-environment interactions are facilitated in a sustainable manner rather than being impeded altogether. This, I believe, justly characterises what Gabon is, at present, attempting to do.

Can Asia aspire to learn from Gabon?

When contemplating the issue of development on the African continent, there is often an overwhelming, somewhat defeatist, tendency to solely scrutinise the various plot holes in our development narrative, or an over-eagerness to superimpose lessons drawn from other nations which have developed sooner, and faster, but not necessarily in a manner that can be deemed “better”. One often overlooks the exciting opportunity we are presented with, as developing nations, to capitalise on new, non-traditional pathways of development — to pioneer sustainability in ways those who grew before us failed to do. With regards to African countries that are doing this, we would be remiss, if not overly humble, not to extract lessons that could be applied outwards.

The government of Gabon has adopted a two-pronged approach to development, relying on:

  • the development of an agricultural sector through oil palm cultivation; and
  • sustainable forest management, to diversify its economy. It is herein, at the crux of these agendas, that sustainability inherently lies.

While Indonesia and Malaysia have already driven large-scale deforestation to advance their oil palm ambitions, there is still time to follow suit from Gabon’s land-use directives by striving to optimally pinpoint areas for future cultivation, as opposed to continuing its ecological rampage. In Gabon, for example, more than half of Olam’s Mouila plantation has been cultivated on savannah — a biome of lower carbon value chosen to avoid excessive deforestation.

There is potential for Indonesia and Malaysia to commit to a similar strategy — according to a recent study, large tracts of land that have been invaded by alang-alang, a fire-sensitive, resilient species of perennial grass that is in competition with forest vegetation, could successfully be recovered by cultivating oil palm. While several experts have stressed the feasibility of this land for oil palm exploitation, no large-scale application has yet been undertaken — nevertheless, it presents a viable strategy worth pursuing.

Furthermore, steps should be taken to integrate sustainable forest management into an economic agenda. The conservation of tropical forests and oil palm cultivation have historically been conflictual land uses, as has evidently been the case to date in Asia’s palm oil-producing nations. Where economic growth is concerned, curtailing the extent of the latter requires alternative streams of profit to offset the financial losses incurred by limiting cropland expansion. The example of Gabon provides the necessary insight into how this should be done.

Linking forest conservation with the financially lucrative carbon credit market has the potential to enhance the value of initiatives such as REDD, and to promote sustainability in agroforestry practices. While both Indonesia and Malaysia are REDD participants, the long-term economic viability of these agreements depends on the relative profitability of alternative land uses such as oil palm agriculture. Norway’s recent actions in doubling the floor carbon price for one tonne of sequestered carbon sets a new precedent, providing hope that the global community could move towards a more realistic carbon price that could appropriately incentivise developing nations to follow suit from Gabon.

This article was originally published in The Daily Maverick.