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  Yahoo News 12 Feb 07
Palm oil - eco-vandal turned environmental saviour?
by Hamish Townsend

KUALA LUMPUR (AFP) - The oil palm must be the most reviled plant on earth, held responsible for everything from rainforest But lately, high crude oil prices and new health concerns have given the towering palm, grown mostly in Malaysia and Indonesia, a surprising new status as an environmental saviour.

Palm oil production and prices are soaring as it finds favour as a source of eco-friendly biofuel -- fuel derived from renewable resources as an alternative to fossil fuels -- and as a substitute for the new dietary baddy trans fats, which are commonly used in processed food.

Palm oil used to be shunned because it is a saturated fat, but trans fats are now believed to be much more harmful and last year the US market for Malaysian palm oil grew by 65 percent as consumers began making the switch. Meanwhile, European nations in particular are fuelling big demand for biofuel, which is derived from natural oils and plants and added to ordinary diesel, and is seen as an important tool for reducing dependence on fossil fuels.

Last year Malaysian exports of palm oil, already the world's largest, grew to a record 31.81 billion ringgit (9.05 billion dollars), five percent up on the last high set in 2004. Biodiesel production is expected to double this year. Indonesia is also in an aggressive mood, aiming to overtake Malaysia as the world's largest producer of palm oil by 2008 by expanding the area under plantation to meet the demand for biofuel raw materials.

Environmentalists are alarmed by the new mood, and say that the benefits in terms of health and alternative energy will not outweigh the damage wreaked by a dramatic expansion of palm oil planting.

"It's a huge push to have a monoculture crop replace biodiverse rainforest and indigenous people. Palm oil is just a quick fix for biofuel," said Meena Raman from Friends of the Earth Malaysia.

"It's being bandied around with all the companies getting excited about expanding palm oil, but from an environmental standpoint they've already devastated so much. Species extinction is very clear," she said.

Friends of the Earth in 2005 called for a boycott of palm oil products in a report dubbed the "Oil for Ape Scandal," on shrinking orangutan habitat in Indonesia's Sumatra island, and Borneo island which is split between Indonesia and Malaysia.

"If forest destruction continues at the same scale and speed, the orangutan will be lost within 12 years. The countdown to extinction has begun," it said.

Malaysia has denied the claims, saying that no forests are cleared for plantations any more, and that the allegations are an attempt by industry competitors in the developed world to undermine the sector.

"We owe no apology to anyone to use our forests for our own use. Just like the Europeans who used up all their forests for their own use," Energy Minister Lim Keng Yaik said last year.

In Indonesia, however, land clearing is rampant and last month Greenpeace warned that European Union demand for bio-fuel could threaten Indonesia's remaining forests as the government approves new palm oil plantations.

Chinese-funded plans for a vast new plantation in Indonesia's Kalimantan which would see the forest stripped from a 1.8 million-hectare (4.5 million-acre) site -- half the size of the Netherlands -- have raised particular alarm.

Apart from destroying forests where new species are still being discovered at the rate of three a month, burning to clear land for palm oil poses a major hazard because the dense smoke wafts right across the region.

In 1997-98 the haze choked large parts of Southeast Asia, costing an estimated 9.0 billion dollars by disrupting air travel and other business activities, and triggering a health crisis that rears its head annually.

In the face of illegal and unplanned development worldwide, in 2003 the international Roundtable on Sustainable Palm Oil (RSPO) was established to define and promote sustainable production.

"We need to show that environmental responsibility is not out of sync with making money. There will always be cowboys out there, but hopefully we can bring them," said RSPO Secretary-General Andrew Ng.

Driving north from Kuala Lumpur there is rarely a break in the vast swathes of oil palms that line the roads throughout the three-hour drive from the capital to United Plantations, reputedly one of the best run in the country.

"At the end of the day it's a very sustainable crop," said commercial director Martin Bek-Nielsen, whose father Borge was a Danish entrepreneur who died in 2005 after spending a lifetime nurturing one of Malaysia's key industries.

"Of course there's black sheep out there who shouldn't be in the business. We can't fight against consumers in Europe who see pictures of burnt out orangutans," he told AFP.

Outside, endless neat rows of palm trees shade the mostly Indian, Bangladeshi and Indonesian workers as they go about the tough work of cutting away the palm fronds and harvesting the 40-50 kilogram (88-110 pound) fruits that look like prehistoric bunches of grapes.

United's workers are well paid, housed and unionised. They have professional medical care and their children are schooled, but civil society groups say this is exceptional and that elsewhere long working hours, unsafe conditions and low pay are common.

With European companies already beginning to abandon bio-diesel plants because of environmental concerns, Bek-Nielsen is bent on changing perceptions of his industry.

"If we don't get our act together this bad perception is going to grow and grow. If European companies can't buy environmentally sustainable palm oil they won't buy any at all," he said.
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