12/05/2009 (Forbes) - Scores of communities in Malaysia and Indonesia are being uprooted by rapidly expanding palm oil plantations as companies try to meet the expected demand for biofuels, environmentalists alleged Tuesday.
Speaking at a two-day seminar on palm oil, the Borneo Resources Institute of Malaysia and the World Wildlife Fund in Indonesia said land disputes were emerging as one of the biggest problems associated with palm oil.
Environmentalists say palm oil production has already caused the loss of vast tracts of tropical forest - the natural habitat of scores of animals and other wildlife - and peatlands, which are known to store vast amounts of carbon.
Indonesia and Malaysia, the world's top two palm oil producers, have aggressively pushed to expand plantations amid a rising demand for biofuels, which are considered cleaner burning and cheaper than petrol.
In the wake of that push, hundreds of communities have filed complaints with courts in both countries about either being forced off their land or pressured to sell it at cheap prices, the groups said. Many of those affected are impoverished or indigenous communities whose ownership of the land is often not recognized by local authorities.
"The situation is getting critical at the moment. The companies are expanding more and more," said Kalyana Bujang, director of the Borneo Resources Institute of Malaysia, which has documented 200 court cases in the state of Sarawak alone. "The communities are caught unaware. They don't know what to do, or where to go."
Kalyana Sundram of the Malaysian Palm Oil Council, an industry group, acknowledged that court cases have been filed in Sarawak, one of the few places left in Malaysia with plentiful land available for plantations.
"There has been a lot been said, a lot of debate," Sundram said. "Let the courts decide. There is a legal process ongoing at the moment. Let them decide."
Gandi Sulistiyanto, managing director of Indonesian company Sinar Mas Group, which manages hundreds of thousands of acres (hectares) from Sumatra island in the west to Kalimantan in the east, said his company follows all necessary regulations.
"Because we are a big company, we have been managing the factory and plantation in line with government regulations," he said in a phone interview.
Together, Malaysia and Indonesia provide 87 percent of the world's palm oil. The industry has argued that it only attempting to meet the booming demand for vegetable oil in places like China and India and biofuels in Europe and that its plantations are much more sustainable than critics contend.
Palm oil plantations represent only 1 percent of all agriculture land planted, Sundram said, and are four times more productive than any other vegetable oil being considered for use in biofuels like rape seed or soy beans.
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