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<\/p>\nMost parts of Indonesia have been experiencing hot weather over the past few days with the Meteorology, Climatology and Geophysics Agency (BMKG) reporting hottest temperatures in the outskirts of Jakarta of between 37 and 41 degrees Celsius. Whether we see the phenomenon as a heat wave or just seasonal hot weather with the coming dry season, we cannot help but conclude that the scorching heat is part of the impact of climate change, especially as Indonesia is far behind on its target of implementing its just transition program.<\/p>\n
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This means Indonesia remains one of the world\u2019s biggest carbon dioxide emitters. And when it comes to greenhouse gas emissions, we immediately remember deforestation or slash and-burn farming practices. The fear of deforestation also has resurfaced with the announcement of president-elect Prabowo Subianto\u2019s program to increase the production of palm oil-based biodiesel from B30 to 40 and 50 (meaning diesel fuel containing 50 percent of fossil diesel fuel and 50 percent fatty acid methyl ester or FAME) from palm oil.<\/p>\n
Even though Indonesia is now the world\u2019s largest producer of palm oil with an annual output of more than 50 million tonnes a year, the planned increase in the use of palm oil for biofuel will require the further expansion of palm oil production with an increased risk of deforestation. The government and palm oil companies have significantly improved the sustainability standards of the oil palm cultivating business, but the steady expansion of oil palm estates has been cited as the main culprit behind deforestation in the country.<\/p>\n
The risk of deforestation within the palm oil industry has been attributed to the steep increase in the number of crude palm oil (CPO) mills, which have been built without an adequate fresh fruit bunch (FFB) supply from their own oil palm plantations.<\/p>\n
These mills are locally known as berondolan (plantation-less) mills because they buy or procure their FFBs from anywhere, whether from legal or illegal plantations or even stolen from big companies\u2019 plantations.<\/p>\n
The mushrooming operations of the so-called berondolan CPO mills has often stirred social conflict, illegal opening of oil palm plantations and even crop theft and looting. The mills incite the surrounding communities to grow on available land, including prohibited forest areas, given the high economic value of palm oil. Such continued new land clearance in forest areas has given palm oil a bad image as a driver of deforestation, rendering efforts to de-link palm oil and deforestation futile.<\/p>\n
We wonder why hundreds of plantation-less CPO mills have been operating in major producing areas as Kalimantan, Sumatra and Papua, whereas Agriculture Ministerial Regulation No.98\/2013 stipulates that CPO mills have to be supported with their own oil palm plantations, which meet at least 20 percent of their processing capacity. But the reality is that many regents have licensed plantation-less CPO mills without fulfilling the minister\u2019s legal directive.<\/p>\n
Plantation-less mills are beginning to threaten the other palm oil mills that have their own plantations by provoking massive crop theft in surrounding estates. The plantation-less mills are often built without adequate studies, which also trigger unfair competitive practices in FFB pricing and trade. The business people or investors who own plantation-less CPO mills tend to resort to speculative business practices and short-sighted policies to remain competitive with local mills, which have their own plantations as the main source of their FFBs.<\/p>\n
The operations of CPO mills without the support of their own plantations have also encouraged local communities to grow oil palm even on forested land and tempting them to compromise on their sustainability commitment. But such practices have often been immediately blamed on big plantation companies in view of the lucrative prospects of palm oil as a commodity.<\/p>\n
Palm oil mills without plantations, if not regulated or supervised more strictly, will discourage the implementation of sustainable standards in the palm oil industry and will sabotage Indonesia\u2019s efforts to have its palm oil product certified as sustainable under international sustainability standards such as the European Union Deforestation Regulation, which will take effect later this year.<\/p>\n
The uncontrolled socio-environmental impacts caused by the proliferation of plantation-less palm oil mills must immediately be addressed through a number of measures ranging from a nationwide assessment and review of palm oil plantation production and plantation-less mills, policy review and permit and license requirements for the plantation-less mills and law enforcement.<\/p>\n
The mapping of plantations and mills is the basis for formulating government policies for the feasibility of plantation-less mills. In the short-term, upon completion of a comprehensive assessment and mapping of the palm oil mills, the government may need to introduce a new moratorium on permits for mills without own plantations.<\/p>\n
Plantation-less mills can be licensed only in the areas that do not yet have operating mills and where there are sufficient FFB supplies from smallholders, cooperatives or small estates to support the milling capacity. The licensing guidelines for the establishment of plantation-less palm oil mills should require strategic long-term partnerships between the owners of the mills and local smallholders to secure sustainable FFB supplies.<\/p>\n
Subsequently, the capacity of palm oil mills should be limited and determined in accordance with supply chain capabilities as outlined in partnership agreements with raw material suppliers. The absence of a partnership agreement can be used as a basis for revoking the operational license of a palm oil mill without its own plantation.<\/p>\n