On October 2001, the Tagbanua community in Barangay Simpocan had been offered by at least 2 palm oil companies to sign a contract with them. The agents of these companies promised financial support and a ready buyer if the tribe converted their lands to palm oil. They offered them great prices for all the palm oil produce they harvested. Their investors were obscure but someone mentioned they might be Malaysian. The agents had reached various municipalities of Palawan like Taytay, El Nido, Roxas, Puerto Princesa, Aborlan, Quezon and other areas. Our office has been receiving reports on the conversion and clearing of forested areas under stewardship and tax declaration to give way to palm oil plantations.


During the Annual Planning Conference of the Provincial Development Council, the Palawan Integrated Zonal Plans for 2003-2012 were presented. It was noticed that Palm Oil plantation development is included in the Zones 3, 4 & 5 particularly in the municipalities of Taytay, Aborlan, Puerto Princesa City, Quezon, Rizal, Bataraza, Brooke’s Point and Espanola.


Basic Facts


The oil palm (Elaeis guineensis) is native to West Africa, where local populations have used it to make foodstuffs, medicines, woven material and wine. Today’s large-scale plantations are mostly aimed at the production of oil (which is extracted from the fleshy part of the palm fruit) and kernel oil (which is obtained from the nut).


Oil palm plantations composed of specially selected cloned varieties of palm trees start to poduce fruit after four to five years and reach maturity and the highest rate of productivity when the trees are 20 to 30 years old. The fruit bunches, each weighing between 15 and 25 kgs., are made up of between 1000 and 4000 oval-shaped fruits, measuring some three to five centimeters long.

Once harvested, the fleshy part of the fruit is converted into oil through a series of processes, while the palm kernel oil is extracted from the nut itself. The processing of the crude oil gives rise to two different products: 1) palm stearin and 2) palm olein. The stearin (which is solid at room temperature) is used almost entirely for industrial purposes such as cosmetics, soaps, detergents, candles, lubricating oils, while the olein (liquid at room temperature) is used exclusively in foodstuffs (cooking oil, margarines, creams, cakes and pastries).



Oil Palm Plantations Around the World


Oil palm plantations are being established principally in tropical regions where, by 1997 they occupied 6.5 million hectares and produced 17.5 million tonnes of palm oil and 2.1 tonnes of palm kernel oil.



In Asia, the two main oil palm producing countries are Malaysia and Indonesia (both with more than two million hectares of plantations), which have become the world’s principal producers of palm oil. Malaysia generates 50 per cent of world production (of which 85 percent is exported), while Indonesia is the next largest producer with almost 30 per cent of global production (of which 40 per cent is exported). However, other countries are joining them in large-scale production. The most important of these are Thailand (with more than 200,000 hectares) and Papua New Guinea (which is the world third-largest palm oil exporter). Ambitious plans also exist for the Philippines, Cambodia and India, as well as the Solomon Islands.


Issues Around the World






To respond to strong demand from national and international markets, the Cameroonian government has long played a key role in national palm oil production, particularly through the involvement of public-sector companies. For many years, such public-sector firms, together with a few private sector agroindustrial companies, have monopolized large scale- cultivation of oil palm.

Oil palm plantations are estimated to cover 80,000 has. The area under the industrial palm plantations- not including small and medium-sized plots- has reached 58,300 has divided into 18 plantations.

· The promotion of large scale oil palm plantations is a major cause of deforestation in Cameroon.

· The widespread use of agrochemicals in oil plantation increasingly affected local populations’ health as well as local ecosystems

· Plantation investors acquire land at the expense of local communities’ customary land rights, which are not recognized by a state that claims ownership over all land.

· Oil palm’s ability to generate emplyment is very limited and the jobs provided are of low quality in all respects. Employment losses resulting from deforestation and substitution of fallow lands by palm plantations will almost certainly be greater than the jobs generated by this activity.

· The main beneficiaries of the oil palm boom are the large enterprises-increasingly foreign.


The company that established the plantation, Mong Reththy Investment Cambodia Oil Palm Co. Ltd., is a joint venture between Mong Reththy and three partners.

The US$12 million investment consists of 3,800 hectares of oil palm plantation and a processing factory due to be completed by 2002. 70% of the factory’s output will be for export, largely to China and South Korea, with the remainder going to local soap manufacturers.

· Failure of the plantation company to fulfill the following promises:

1. Promise of work on an palm oil plantation

2. Two hectares of palm plantation each may of the squatters were willing to move.


In 1985, oil palm plantations covered 600,000 hectares. By 1996, they extend over some 2.2 million hectares. More recent figures suggest that there are now 2.4 million hectares of oil palm, of which state-run companies possess 443,000 hectares of older productive plantings, smallholders have 824,000 hectares and private companies the rest, primarily new, immature plantations, some 6.8 million hectares of land has been recently released for future plantations. This figure does not include applications to develop new plantations, which has reached 9 million hectares by June 1998. At present, Indonesia is the second to Malaysia in exporting palm oil products.

Social Impacts:

· Violation of Land Rights of Indigenous People and local communities

· Human Rights Violations

· Foreign Investment

· Destruction of Community Based Economies

Environmental Impacts:

· Deforestation

· Forest Fires

Those who benefited:

· Indonesian Conglomerates with links to the Soeharto Family

· Foreign Companies and financial Institutions

Costa Rica

Palma Tica is a company which works in the cultivation, processing and production of palm oil products. It owns thousands of hectares of plantations. In 1995, it started an aggressive campaign of land purchasing for expansion as it faced a competitor Agroindustrial Cooperative of Oil Palm Producers.

· Deforestation resulted from Palma Tica’s expansion and clearing of a secondary forest area

· Despite the order from the country’s Ministry of the Environment, Palma Tica ignored its “recommendations”

· It took a complaint in Court before the Palma Tica stopped from dredging a wetland



Oil Palm Plantations in the Philippines


The first palm oil plantation in the Philippines was established by Menzi and Co. in Basilan. Sometime in 1967 Kenram Philippines, Inc. started converting their ramie plantation into oil palm. No new plantation was put up until 1981 when NDC, in partnership with Guthrie of Malaysia, organized the Filipinas Palmoil Industry, Inc., and began developing in Agusan del Sur the biggest oil palm plantation in the country. In 1983 some local businessmen, together with their Singaporesan partners, organized the Agusan Plantations, Inc.









§ Irreversible destruction of large expanses of tropical rainforests and loss of biodiversity
Oil Palm plantations will need large-scale clearing of forest (usually done through massive burning of local trees species) for establishing palm crops. This is alarming news for the stability of forest ecosystems of Palawan, already in a critical condition as a result of unsustainable resources-extraction practices such as illegal logging and kaingin.


As with any large-scale monoculture, Oil Palm plantations will be established at the expense of the highly diverse ecosystem of the Province, putting species in jeopardy of extinction.


§ Intensive use of chemicals generate long-term negative effects such as contamination of underground water, river and streams; adverse effect to the health of the mangrove ecosystem and consequently to aquatic life; a decrease in soil fertility, a perturbed soil fauna, and air pollution from spraying


§ Exposure of soils to solar radiation and rainfall leading to soil erosion, compression and impoverishment


§ Exacerbation of climate change through forest destruction and associated carbon releases into the atmosphere which by causing global warming, may further accelerate deforestation


§ Hydrologic changes due both to deforestation and to the channeling and draining of streams; and


§ Possible introduction of harmful insects and pests attracted to Oil Palm.





Socio-economic Impacts:

§ Possible neglect of the existence of the indigenous people (IP)
Oil Palm plantations entail appropriation of IP lands. Palm companies will be clearing not only forest but also the local communities. Most of the forested areas of the Province are still inhabited by the IPs.


Concentration of land in the hands of palm companies will not only expropriate the IPs from their lands but also depriving them of their rights to preserve their culture and resource-based means of livelihood, destroying their social structures and traditions.



§ Destruction of local economies


If millions of hectares of lands are converted to Oil Palm plantations the regional and people’s economy will be very dependent on a single economy that is subject to international price fluctuation. Subsequently, dependence on capital and new technology, dependence on commercial monopolies and market dependence emerge.



§ Health issues
Agro-chemical contamination affecting workers and families living near plantations, either directly through contact with the chemicals or indirectly through ingestion of contaminated water is undeniably a great risk.


Alongside with this, liver and skin diseases caused by contact with or ingestion of water contaminated by the pesticides use in palm plantations.


§ Domination of the agricultural labor force by the contractors who are in charge of hiring and paying palm plantation workers.


§ Reduction of labor requirements


Oil Palm companies tend to provide only temporary jobs mainly in the harvest season. The more high-tech the operations and the greater the size of the plantation, the fewer the agricultural workers are hired.



§ Displacement of farmers
After farmers have sold their land to oil palm companies they move to nearby village, large cities or other forest areas where they start cutting trees to meet their primary needs.


This also means that there is and will be high concentration of land holdings. Experience shows that when indigenous and local peoples’ lands are expropriated for this purpose, many more people become landless and are thus pushed into a massive poverty process.