Economical and versatile, palm oil has become the world’s most widely used vegetable oil. However, its production comes at a heavy environmental cost, especially in Indonesia and Malaysia, the two main producers. Efforts to make its production more sustainable still have a long way to go.
The rising demand for palm oil has many environmental impacts. Before the conversion of the lands for palm oil plantations, it consisted predominantly of forest cover. The forests used to be home to a variety of animal species which have now lost their natural habitats. As entire forests are cultivated with palm plantations, locals can no longer even hunt or collect wild fruits for consumption and are forced to intrude on surrounding forest reserves. Additionally, the forests are now partially degraded and show signs of human disturbance and intrusion due to land clearing for agriculture, illegal logging, hunting and improved road access. However, the perceived environmental impacts of palm oil vary according to the location and level of dependency on natural resources by different stakeholder groups. Neighbors around the forests are also affected. For e.g. negative changes in water quantity and quality leading to loss of pot-ability of the river water due to pollution, and erosion of the river banks, resulting in decreasing water depth. River surfaces often become oily affecting the aquatic life. This is critical as many people are dependent on the river and aquatic resources for their livelihoods and domestic water consumption.
Palm oil is a key ingredient used by many companies such as PepsiCo and Ferrero SpA. The demand for palm oil has sharply increased over the years as it is one of the cheapest vegetable oils available on the global market with no trans-fats. The rising demand is linked to extensive deforestation across South East Asia. With time, the Malaysian state of Sabah has transitioned towards the development of a cash-crop estate economy, in which powerful state associations are granted powers to allocate the land and control the trade in key products such as timber and palm oil. Forests on state lands not identified as forest reserves stay unprotected. Thus, the state has the right to alienate such lands for development and they are usually logged and cleared for agriculture.