The Palm Oil Controversy in Southeast Asia: A Transnational Perspective 9789814311458

Table of contents :
Contents
FOREWORD
PREFACE
CONTRIBUTORS
ABBREVIATIONS
1. Introduction
2. Malaysian Corporations as Strategic Players in Southeast Asia’s Palm Oil Industry
3. The Political Ecology of the Indonesian Palm Oil Industry
4. Evolutionary Change in the Oil Palm Plantation Sector in Riau province, Sumatra
5. Contradictions of Palm Oil Promotion in the Philippines
6. The Political Economy of Migration and Flexible Labour Regimes: The Case of the Oil Palm Industry in Malaysia
7. Migration and Moral Panic: The Case of Oil Palm in Sabah, East Malaysia
8. Reconciling Development, Conservation, and Social Justice in West Kalimantan
9. An Analysis of Transnational Environmental Campaigning around Palm Oil
10. EU Biofuel Policies and their Implications for Southeast Asia
11. Leveraging Product and Capital Flows to Promote Sustainability in the Palm Oil Industry
12. Free, Prior, and Informed Consent? Indigenous Peoples and the Palm Oil Boom in Indonesia
INDEX

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Half Title page.pdf

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The Palm Oil

Controversy in Southeast Asia

The Asia-Europe Foundation (ASEF) promotes greater mutual understanding between Asia and Europe through intellectual, cultural and people-to-people exchanges. Through ASEF, civil society concerns are included as a vital component of deliberations of the ASIA-Europe Meeting (ASEM). ASEF was established in February 1997 by the participating governments of ASEM and has since implemented over 500 projects, engaging over 15,000 direct participants as well as reaching out to a much wider audience in Asia and Europe. The Institute of Oriental and Asian Studies (IOA) of Bonn University is one of the few centres in Germany offering a high calibre programme of academic study which incorporates an exceptional range of subjects about Asia, the region’s diverse languages, religions and cultures. Courses cover Asia Minor and Japan, southern Siberia and Mongolia to South and Southeast Asia. Teaching and research also concentrate on other regional specialisms, including contemporary and classical Asian cultural languages and literatures. The link between past and present — a key to understanding Asia’s cultural self-identity — is a core aspect of teaching and research activities at the IOA. The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publishing, an established academic press, has issued more than 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world.

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Title page .pdf

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The Palm Oil

Controversy in Southeast Asia A Transnational Perspective

edited by

Oliver Pye & Jayati Bhattacharya

ASIA-EUROPE FOUNDATION Singapore

Institute of Oriental and Asian Studies Germany

Institute of Southeast Asian Studies Singapore

First published in Singapore in 2013 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2013 Institute of Southeast Asian Studies The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of the publisher or its supporters. ISEAS Library Cataloguing-in-Publication Data The palm oil controversy in Southeast Asia : a transnational perspective / edited by Oliver Pye and Jayati Bhattacharya. Papers originally presented to a Workshop on the Oil Palm Controversy in Transnational Perspective, organized by ISEAS and Universität Bonn, Singapore, 2–4 March 2009. 1. Palm oil industry—Southeast Asia—Congresses. 2. Oil palm—Southeast Asia—Congresses. I. Pye, Oliver, 1968– II. Bhattacharya, Jayati. III. Institute of Southeast Asian Studies. IV. Universität Bonn. V. Workshop on the Oil Palm Controversy in Transnational Perspective (2009 : Singapore) HD9490.5 P343A9O39 2013 ISBN 978-981-4311-44-1 (soft cover) ISBN 978-981-4311-45-8 (e-book, PDF) Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Mainland Press Pte Ltd

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Contents

Foreword by Prof Jun Borras

vii

Preface

xiii

Contributors

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Abbreviations

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  1. Introduction Oliver Pye   2. Malaysian Corporations as Strategic Players in Southeast Asia’s Palm Oil Industry Teoh Cheng Hai   3. The Political Ecology of the Indonesian Palm Oil Industry Norman Jiwan   4. Evolutionary Change in the Oil Palm Plantation Sector in Riau province, Sumatra Junji Nagata and Sachiho W. Arai   5. Contradictions of Palm Oil Promotion in the Philippines Mary Luz Menguita-Feranil

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Contents

  6. The Political Economy of Migration and Flexible Labour Regimes: The Case of the Oil Palm Industry in Malaysia Johan Saravanamuttu

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  7. Migration and Moral Panic: The Case of Oil Palm in Sabah, East Malaysia Fadzilah Majid Cooke and Dayang Suria Mulia

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  8. Reconciling Development, Conservation, and Social Justice in West Kalimantan Oetami Dewi

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  9. An Analysis of Transnational Environmental Campaigning around Palm Oil Oliver Pye

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10. EU Biofuel Policies and their Implications for Southeast Asia Joana Chiavari

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11. Leveraging Product and Capital Flows to Promote Sustainability in the Palm Oil Industry Eric Wakker

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12. Free, Prior, and Informed Consent? Indigenous Peoples and the Palm Oil Boom in Indonesia Patrick Anderson

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Index

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FOREWORD

This collection of papers on the “palm oil controversy” focuses on one crop and on one specific region, but the issues discussed in this book relate to a global controversy that has come to be known — and to be criticized — as land grabbing. In the initial surge of reports and studies on contemporary land grabbing there is a dominant assumption that the phenomenon has occurred because of the 2007–8 food crisis, which in turn was largely caused by the emerging global biofuels complex (White and Dasgupta 2010; Franco et al. 2010).1 The changes in the global agro-food system made some financially powerful countries (primarily China, South Korea, the Gulf States) that could not produce sufficient food domestically feel insecure. They started to seek control over large tracts of land overseas to secure food supply. The principal target is Africa, where vast empty lands are thought to be available, cheaply. It is generally assumed that 70 per cent of all land that was grabbed is in Africa. (Inter)national public policymaking aimed at addressing some of the serious concerns in the current land rush (expulsion of peasants from their land, corrupt land deals, and so on) has been under way and is politically contested. These assumptions have been increasingly challenged. Visser and Spoor (2011) identify the former Soviet Eurasia, and Borras and Franco (2011) Southeast Asia as important regional sites of land grabs too. Levien (2011) raises the issue of domestic land grabs, Amanor (2012) on the role of transnational corporations and global commodity chains, Hall (2011) on pre-existing crop boom-bust cycles, McMichael (2012) on the location of land grabs in the restructuring of the global food regime, Mehta, Veldwisch and Franco (2012) on the water dimension of land grabbing, Hofman and Ho (2012) on a better

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view of Chinese land grabbers, Li (2011) on centring labour in the debate, De Schutter on the right to food dimension, and Fairhead, Leach and Scoones (2012) on “green grabbing” — land grabbing in the name of the environment. Peluso and Lund (2011) offer fresh analytical insights on new frontiers of land control more generally, while Cotula (2012) offers a useful comprehensive overview on key issues in current land grabs. In short, the current trajectory of scholarly thinking is to broaden the parameters of empirical and theoretical inquiry into land grabs. The emerging common thread is that there is a need to embed land grabs within our analysis of contemporary global capitalist development, in the specific context of the convergence of multiple crises: food, energy, climate change and finance capital. Yet, to date, there remains no consensus on the definition of land grabbing. Some define it too broadly to include all land deals that lead to transfer of control over land resources to corporate elites. Others define it too narrowly to include only land deals that involve foreign companies and expel people from their land. However, the problem in defining it too narrowly is that we miss a significant dimension of the current land-grabbing process, including the role of central states and domestic capital. The problem in defining it too broadly is that we lose sight of the distinct characteristic of contemporary land grabbing. In order to avoid the problems cited above, Borras et al. (2012) offer the idea of three key interlinked defining features of contemporary land grabbing. First, a fundamental starting point is to clarify that land grabbing is essentially control grabbing: grabbing the power to control land and other associated resources such as water in order to derive benefit from such control of resources. Land grabbing in this context is often linked to a shift in the meaning or use of land and associated resources as the new uses are largely determined by the accumulation imperatives of capital that has now the control over a key factor of production, land. “Extraction” or “alienation” of resources for external purposes (national or international) is often the character taken by land grabs (Wolford 2010). Control grabbing is inherently relational and political; it involves political power relations. Control grabbing manifests in a number of ways, including, “land grabs” (capture of vast tracts of lands), “(virtual) water grabs” (capture of water resources — see Woodhouse 2012; Mehta, Veldwisch and Franco 2012), and “green grabs” (resource grabs in the name of the environment — see Fairhead, Leach and Scoones 2012). This perspective addresses the problem of a “too land-centred perspective” in the current land-grab thinking. Seen from the perspective of control grabbing, land grab does not always require expulsion of peasants from their lands. Second, a study of current land grabbing requires consideration of scale and character of land grabs. But scale and character of land grabs should

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not only be about the scale and character of land acquisitions, often within the dominant view that defines “large-scale land acquisition” as those that pass the 1,000 hectare benchmark. For us, land grabbing entails large-scale transactions in two broadly distinct but interlinked dimensions: scale and character of land acquisitions and/or scale and character of capital involved. This framework necessarily considers various forms of acquiring control: purchase, lease, contract farming, forest conservation, and so on. In other words, taking the scale and character of capital as the unit of analysis necessarily includes land as central in the operation of capital, while a “too land-centred” view (scale and character of land acquisitions only) on land grabs tends to miss or de-emphasize in its analysis the underlying broader logic and operation of capital. This framework brings capital back into our unit of analysis, casting an interrogating gaze at what has emerged to be a flurry of “land measurementoriented accounting” of land grabs. Third, and finally, the first two features are more or less the same defining features of land grabs that happened worldwide, historically. What is distinct in the current land grabs is that these occur primarily because, and within the dynamics, of capital accumulation strategies largely in response to the convergence of multiple crises: food, energy/fuel, climate change, financial crisis (where finance capital started to look for new and safer investment opportunities), as well as the emerging needs for resources by newer hubs of global capital, especially the BRICS (Brazil, Russia, India, China and South Africa) and some powerful middle-income countries. The key contexts of land grabbing arise from this: food security, energy/fuel security, climate change mitigation strategies, and demands for natural resources by new centres of capital. One offshoot of this recent development is the emergence of “flex crops”: crops that have multiple uses (food, feed, fuel, industrial material) that can be easily and flexibly interchanged: soya (feed, food, biodiesel), sugarcane (food, ethanol), oil palm (food, biodiesel, commercial/industrial uses), corn (food, feed, ethanol). It has resolved one difficult challenge in agriculture: diversified product portfolio to avoid devastating price shocks, but is not easy to achieve because of the cost it entails. With the emergence of relevant markets (or speculation of such) and the development and availability of technology (e.g., flexible mills) that enables maximization of multiple and flexible uses of these crops, diversification has been achieved — within a single crop sector. When sugarcane prices are high, sell sugarcane; when ethanol prices are high, sell ethanol. When the actual market for biodiesel is not there yet, sell palm oil for cooking oil, while waiting (or speculating) for a more lucrative biodiesel market to emerge (a feature not present in jatropha). The emergence of flex crops is a logical outcome of the convergence of multiple crises. Hence, in a single crop sector we find multiple mechanisms of land

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Foreword

grabs: food, energy/fuel, and climate change mitigation strategies. It is these broader interlinked contexts that largely differentiate current land grabs from the ones that existed before. In short, contemporary land grabbing is the capturing of control of relatively vast tracts of land and other natural resources through a variety of mechanisms and forms that involve large-scale capital that often shifts resource-use orientation into an extractive character, whether for international or domestic purposes, as capital’s response to the convergence of food, energy and financial crises, climate change mitigation imperatives, and demands for resources from newer hubs of global capital. The sector of oil palm, which is significantly concentrated in Southeast Asia — and is the overarching theme of the fascinating collection edited by Oliver Pye and Jayati Bhattacharya — is an iconic illustration of the context for and imperatives of global land grabbing and its trajectories. The current oil palm boom is a direct result of the changed global context discussed above, and illustrates what a flex crop is. It also shows the implications of flex crops for the complicated terrain of policy advocacy by social movements and civil society: it is not always easy to establish direct links between the rise of global biofuels complex and the expansion of oil palm. More generally, Southeast Asia also shows a more complex and wider range of global land grabbing than what the dominant albeit Africa-focused literature would show (see Borras and Franco 2012). In this context, the current collection is a must read for academic researchers and social movement activists who want to understand deeper the context, condition and trajectories of global land grabbing. Meanwhile, the impact of land grabbing is highly differentiated within and between countries across social class, gender, ethnicity and other social fault-lines. There are winners and losers, depending on the character of preexisting agrarian structures and institutions as well as the pattern of capital accumulation. There are two broad types of outcomes on local communities. As Tania Li (2011) explains, where the land is needed but not the labour, capital is likely to expel people from the land. But it is not always the case. There are occasions where capital needs the land and the cheap labour. In these situations, people retain their (formal) control over their lands and are incorporated into the emerging plantations enclaves. The notion of “adverse incorporation” (Du Toit 2004) becomes a relevant one. Again, this current collection that revolves around the issue of oil palm shows more highly differentiated impacts on local communities than what is generally assumed in the dominant discourse. Differentiated impacts provoke differentiated political reactions from below, mirroring the two broad types of consequences described above. Landoriented struggles — resisting land grabbing, struggling to reclaim grabbed

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lands — are dominant features in situations where peoples have been expelled or are threatened to be expelled. Reformist struggles to improve the terms of incorporation — whether around the terms of contract farming or labour standards in plantations — are dominant features in settings where people have been included in the capitalist ventures. Both are important fronts of struggle, and where linked together can develop mutually reinforcing synergies. Engaged research is a key component of any effective policy advocacy and collective action by rural social movements and civil society groups around the issue of land grabbing. While non-governmental organizations and media reports are useful and have been at the forefront of field reporting on contemporary land grabbing, biofuel expansion and local resistance, academic research and publications can also help deepen activists’ understanding and extend the reach of their political actions. Meanwhile, activists’ work can help infuse a sense of political relevance and urgency into academic research to make it more socially relevant. Ultimately, as Marx said, the point is to change the world. It is in this context that the current collection is unique and becomes a must read for everyone interested in understanding global land grabbing, the rise of flex crops and its implications, as well as political reactions from below. Saturnino M. Borras Jr. Associate Professor, International Institute of Social Studies, The Hague Editor-in-Chief, Journal of Peasant Studies

Note 1. This Foreword draws heavily from the Borras et al. (2012) paper published in the Journal of Peasant Studies (JPS). The author took the lead in drafting that section of the JPS article from which much of the current Foreword draws. I thank my co-authors, JPS and Routledge for allowing me to use some of the text from that piece.

References Amanor, K. “Global Resource Grabs, Agribusiness Concentration, and the Smallholder: Two West African Case Studies”. Journal of Peasant Studies 39 no. 3 (2012). Borras, Saturnino Jr., Jennifer Franco, Sergio Gomez, Cristobal Kay and Max Spoor. “Land Grabbing in Latin America and the Caribbean”. Journal of Peasant Studies 39, nos. 3–4 (2012). Borras, S. Jr. and Jennifer C. Franco. Political Dynamics of Land Grabbing in Southeast Asia: Understanding Europe’s Role. Discussion paper, Transnational Institute (TNI), Amsterdam: January 2011.

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Cotula, Lorenzo. “The International Political Economy of the Global Land Rush: A Critical Appraisal of Trends, Scale, Geography and Drivers”. Journal of Peasant Studies 39, no. 3 (2012). De Schutter, O. “Forum on Global Land Grabbing: How Not to Think Land Grabbing: Three Critiques of Large-scale Investments in Farmland”. Journal of Peasant Studies 38, no. 2 (2011): 249–79. Du Toit, A. Forgotten by the Highway: Globalisation, Adverse Incorporation and Chronic Poverty in a Commercial Farming District of South Africa, Chronic Poverty and Development Policy Series No. 4. Cape Town: PLAAS, 2004. Franco, J., L. Levidow, D. Fig, L. Goldfarb, M. Hönicke, M.L. Mendonça. “Assumptions in the European Union Biofuels Policy: Frictions with Experiences in Germany, Brazil and Mozambique”. Journal of Peasant Studies 37, no. 4 (2012): 661–98. Hall, D. “Land Control, Land Grabs, and Southeast Asian Crop Booms”. Journal of Peasant Studies 38, no. 4 (2011). Hofman, I. and P. Ho. “China’s ‘Developmental Outsourcing’: A Critical Examination of Chinese Global ‘Land Grabs’ Discourse”. Journal of Peasant Studies 39, no. 1 (2012). Levien, M. “Special Economic Zones and Accumulation by Dispossession in India”. Journal of Agrarian Change 11, no. 4 (2011): 454–83. Li, T.M. “Forum on Global Land Grabbing: Centering Labor in the Land Grab Debate”. Journal of Peasant Studies 38, no. 2 (2011): 281–98. Mehta, Lyla, Gert Jan Veldwisch and Jennifer Franco. “Water Grabbing? Focus on the (Re)appropriation of Finite Water Resources”. Water Alternatives Journal 2012. McMichael, P. “The Land Grab and Corporate Food Regime Restructuring”. Journal of Peasant Studies 39, no. 3 (2012). Visser, O. and M. Spoor. “Land Grabbing in Post-Soviet Eurasia: The World’s Largest Agricultural Land Reserves at Stake”. Journal of Peasant Studies 38, no. 1 (2011): 299­–323 White, Ben and Anirban Dasgupta. “Agrofuels Capitalism: A View from Political Economy”. Journal of Peasant Studies 37, no. 4 (2010): 593–607. Wolford, Wendy, 2010. “Contemporary Land Grabs in Latin America”. Presentation at the FAO Committee on Food Security 36th Session, Rome, October 2010 (accessed 15 January 2012). Woodhouse, P. “New Investment, Old Challenges: Land Deals and the Water Constraint in African Agriculture”. Journal of Peasant Studies 39, no. 3 (2012).

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PREFACE

This book is a compilation of papers first presented at the workshop “The Palm Oil Controversy in Transnational Perspective” that took place in Singapore, 2–4 March 2009. The workshop was j������������������������������������� ointly organized by the Institute of Oriental and Asian Studies, ������������������������������������������������ Rheinische Friedrich-Wilhelms-Universität, Bonn and the ����������������������������������������������������������������������� Institute of Southeast Asian Studies (ISEAS), Singapore. It was funded by the Asia-Europe Foundation (ASEF). Because of the Asia-Europe focus of the workshop and the stipulations by the funding organization, the book is special in that it features a broad range of writers from Asian and European countries. Another interesting aspect of the book is that it brings together academics and practitioners from the field. Indeed, a large number of the authors are key personalities within the controversy discussed in this book and they also play a role in trying to resolve some of the most pressing issues. However, at the workshop the practitioners were asked to think beyond the everyday issues in which they are embroiled and reflect on bigger issues and the broader context. Conversely, the academics invited to the workshop were “forced” to engage with real issues and to test some of their theoretical abstractions against the vast and detailed empirical knowledge of the practitioners. The result was a very interesting three days of discussions which we hope is reflected in this publication. The book discusses the controversy around palm oil, that is itself made up of a whole range of complex controversies that could each be the subject of separate publications. This necessarily means that the collection of articles here cannot offer a comprehensive discussion of the subject and that it leaves many gaps. For example, although some of the practitioners play an active

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role within the Roundtable on Sustainable Palm Oil (RSPO), this institution is not itself the subject of any of the papers. Also, not many representatives from industry accepted the invitation to present at the workshop, although quite a few attended and participated in the discussion. Finally, the book only begins to develop systematic transnational enquiries of the palm oil industry, leaving many areas to be covered by future research. Nevertheless, we think that it offers a rather unique selection of papers by practitioners and academics that discuss important aspects of the palm oil controversy. We hope that it will contribute to a better understanding of the issues and to potential solutions.

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CONTRIBUTORS

Oliver Pye is a Lecturer in Southeast Asian Studies at Bonn University. His research areas include the social relations of nature in Southeast Asia, globalization, migration, and social movements. He is currently coordinating a German Research Foundation project in which he is working with migrant workers in the palm oil industry. Publications include Khor Jor Kor: Forest Politics in Thailand (White Lotus, 2005) and “The Biofuel Connection: Transnational Activism and the Palm Oil Boom” (Journal of Peasant Studies, 2010). Jayati Bhattacharya is currently a Lecturer at the South Asian Studies Programme at the National University of Singapore and an Associate Fellow at the Institute of Southeast Asian Studies, Singapore. She has research interests in business history, India-Singapore relations and diaspora studies in South and Southeast Asia. Jayati has recently published the book, Beyond the Myth: Indian Business Communities in Singapore (ISEAS, 2011). Patrick Anderson has worked for many years on forest-related issues in Southeast Asia. He was formerly forest campaign coordinator for Greenpeace International and later advisor to WALHI — the Indonesian Forum on the Environment. He currently works with the Forest Peoples Programme based in Indonesia. He recently authored “Free, Prior, and Informed Consent in REDD+: Principles and Approaches for Policy and Project Development”. Sachiho W. Arai is Assistant Professor at Tokyo University of Agriculture and Technology. Her research focuses on farming methods as human adaption

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to regional environmental and socio-economic changes. She has conducted intensive field research into oil palm plantations in Riau, Sumatra. Joana Chiavari is a former Policy Analyst at the Brussels office of the Institute for European Environmental Policy (IEEP) and was responsible for analysing the impact of policies related to climate change and energy issues at EU and international levels. She is now a Senior Analyst at the Climate Policy Initiative (CPI) in Rio de Janeiro. Joana has published many articles on European climate policy. Fadzilah Majid Cooke is Associate Professor in Environmental Sociology at the School of Social Sciences, Universiti Malaysia Sabah (UMS). She is currently leading the Sabah team for the Malaysian Human Rights Commission’s (SUHAKAM) national inquiry into indigenous rights to customary lands. Her latest publications include Community-Investor Business Models: Lessons from the Oil Palm Sector in East Malaysia (IIED/IFAD 2011; co-authored with Toh and Vaz) and “The Land Issue on Banggi Island, Sabah, Malaysia” in Scrase and Lahiri-Dutt, eds., Displacement in the New World Order (Ashgate, 2012). Oetami Dewi is Deputy Director for Cooperation in the Directorate of Social Security, Ministry of Social Affairs, Republic of Indonesia. She conducted her PhD research on palm oil conflicts in West Kalimantan. Since then, she has worked on palm oil, indigenous peoples, and development issues. She is also a lecturer at the Department of Sociology, Universitas Negeri Jakarta. Norman Jiwan is the Head of Department for Social and Environmental Risks Mitigation at the NGO and palm oil watchdog Sawit Watch, whom he represents on the Board of the Roundtable on Sustainable Palm Oil (RSPO). Norman is the author of several publications on land issues and smallholders, including (with Marcus Colchester) Ghosts on Our Own Land: Indonesian Oil Palm Smallholders and the Roundtable on Sustainable Palm Oil. Mary Luz Menguita-Feranil is Fellow of the Philippine Network of Rural Development Institutes (PhilNet-RDI) in Mindanao and a Consultant on research, gender and development projects among various civil society organizations in Southeast Asia. Her more recent research work include projects on agrofuels with PhilNet-RDI and on gender and information and communication technologies on Burmese migrant women in ThailandMyanmar border areas of Mae Sod and Chiangmai.

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Dayang Suria Mulia is a Senior Lecturer in the Sociology and Anthropology Programme, School of Social Sciences, Universiti Malaysia Sabah (UMS). Her primary research focus is on gender and migration, women’s studies, and rural development, with particular attention to Filipino and Indonesian immigrant communities in Sabah, East Malaysia. Dayang is an editor of Bumantara, a journal published jointly by the School of Social Sciences, UMS, and Universiti Nasional Indonesia (UNAS). Junji Nagata is Associate Professor at the Department of Human Geography at the University of Tokyo. His research focus is on the interaction between society and nature in Southeast Asia and Japan. He has been following palm oil issues in Malaysia and Indonesia since the 1990s and is currently working on the dynamics of social and economic change in the oil palm plantation sector in Riau, Sumatra. Johan Saravanamuttu is Visiting Senior Research Fellow at the Institute of Southeast Asian Studies, Singapore and was formerly Professor of Political Science at Universiti Sains Malaysia (USM) in Penang where he served as Dean of the School of Social Sciences (1994–96). His latest books are Islam and Politics in Southeast Asia (ed.) (Routledge, 2010) and Malaysia’s Foreign Policy, the First 50 Years: Alignment, Neutralism, Islamism (ISEAS, 2010). Teoh Cheng Hai is a former Director of Quality and Environment for Golden Hope Plantations Berhad and was the first Secretary-General of the Roundtable on Sustainable Palm Oil (RSPO), in 2004. Currently, he is a Non-Executive Director of CSR Asia Malaysia and ProForest SEA. He is the author of numerous articles and reports on sustainability of the palm oil industry, including “Key Sustainability Issues in the Palm Oil Sector”, a discussion paper commissioned by the World Bank Group. Eric Wakker is a consultant working with Aidenvironment and currently heads Aidenvironment Asia. He has worked extensively on palm oil issues since the late 1990s. He developed the resource trade cycle model, which demonstrates how actors at different levels influence the market chain of major global agro-commodities. Eric is the author of numerous reports on the impacts of the palm oil boom and on interlinkages with Europe.

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ABBREVIATIONS

ABERDI AMAN APO ARB ARMM ASA ASEAN BIMP-EAGA CADC CERD CLOA COFCO CPO CSPO DAR DG ENV DG TREN EIA FCI FFB

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A. Brown Energy and Resources Development, Inc. Aliansi Masyarakat Adat Nusantara (Alliance of Indigenous Peoples of the Archipelago/Indonesia) Asian Productivity Organisation agrarian reform beneficiaries Autonomous Region of Muslim Mindanao Advertising Standards Authority (United Kingdom) Association of Southeast Asian Nations Brunei-Indonesia-Malaysia-Phlippines–East ASEAN Growth Area certificate of ancestral domain UN Committee on the Elimination of Racial Discrimination certificate of land ownership China National Cereals, Oils & Foodstuffs Corp. crude palm oil certified sustainable palm oil Department of Agrarian Reform (Philippines) European Commission’s Directorate-General for Environment European Commission’s Directorate-General for Energy and Transport environmental impact assessment WWF Forest Conservation Initiative fresh fruit bunches

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FoE FPIC FSC GAPKI GHG H&C HCV HME HMPB IFC ILO ILUL INGO IP ISEAS IUCN KGB KKPA KUD LBP LGU M&As MEDCo MNLF MPOA MPOB MPOC NARCICO NBPOL NEP NGO NGPI NREAP NUPW P&C PIR PIR-BUN

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Abbreviations

Friends of the Earth free, prior, and informed consent Forest Stewardship Council Indonesian Oil Palm Growers Association greenhouse gas Harrisons & Crosfield high conservation value Harrisons Malaysian Estates Harrisons Malaysian Plantations Berhad International Finance Corporation International Labour Organisation indirect land-use changes international non-governmental organization indigenous peoples Institute of Southeast Asian Studies International Union for Conservation of Nature Kumpulan Guthrie Berhad Kredit kepada Koperasi Primer untuk Anggotanya (Credit to Primary Cooperative for its Members) Koperasi Unit Desa (Village Unit Cooperative) Land Bank of the Philippines local government unit mergers and acquisitions Mindanao Economic Development Council Moro National Liberation Front Malaysian Palm Oil Association Malaysian Palm Oil Board Malaysian Palm Oil Council Nabunturan Agrarian Reform Community Integrated Cooperative New Britain Palm Oil Limited National Economic Policy (Malaysia) non-governmental organization National Development Corporation – Guthri Plantations, Inc. National Renewable Energy Action Plan National Union of Plantation Workers (Malaysia) sustainable palm oil principles and criteria perusahaan inti rakyat perusahaan inti rakyat perkebunan

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Abbreviations

PIR-KKPA PIR-TRANS PKO PNB POME PORIM PPBOP PPDCI PTPN PTPNV RED REDD RELA RETRAC RSPO SPDA SPKS SRT TAN TAP TNC TP3K TQEMS TSMO UMNO UPB UPKO WALHI WRM WTO

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perusahaan inti rakyat Kredit kepada Koperasi Primer untuk Anggotanya perusahaan inti rakyat transmigrasi palm kernel oil Permodalan Nasional Berhad palm oil mill effluent Palm Oil Research Institute of Malaysia PPB Oil Palm Berhad Philippine Palm Oil Development Council Inc. PT Perkebunan Nusantara PT Perkebunan Nusantara V European Union’s Renewable Energy Directive reducing emissions from deforestation and forest degradation People’s Volunteer Corps (Malaysia) Resource Trade Cycle Roundtable on Sustainable Palm Oil Southern Philippines Development Authority Serikat Petani Kepala Sawit self-reliance team transnational advocacy network Triputra Agro Persada transnational corporations Tim Pembina dan Pengembangan Perkebunan Kabupaten Total Quality and Environment Management System transnational social movement organization United Malays National Organisation United Plantations Berhad United Pasokmomogun Kadazandusun Murut Organisation Wahana Lingkungan Hidup Indonesia World Rainforest Movement World Trade Organization

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1 Introduction Oliver Pye

The oil palm, elaeis guineensis, is native to central Africa, but can be grown successfully as a commercial crop in tropical lowland areas. The products from the palm — crude palm oil, palm kernel oil, palm kernel meal, and their derivates — are extremely versatile, and, in addition to widespread use as cooking oil, are important ingredients for the food, cosmetics, and chemical industries and as animal feed. Indonesia and Malaysia together account for over 80 per cent of global production and Europe is one of their biggest markets. The boom in the palm oil industry is breathtaking. Global output of crude palm oil increased by 65 per cent between 1995 and 2002. The area devoted to oil palm plantations in Indonesia and Malaysia doubled to ten million hectares between 1995 and 2005. New plantations and expansion targets are being developed in the Philippines, in Thailand, and in Papua New Guinea, but also in Africa and Latin America. The expansion of oil palm plantations is a key component of government development strategies across the region. The links to, and importance of, Europe in this development are profound and manifold. Europe is not only an important and expanding market for palm oil products. European banks, the food and chemical industries, and agribusiness are intertwined with the industry at different levels. At the same time, the European Union and the Association of Southeast Asian Nations (ASEAN) are cooperating both in expanding free trade between the regions 

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and in environmental protection. This includes joint initiatives against the problem of haze, for the protection of biodiversity, and, more recently, to stop global warming and to promote sustainable energy. In this context, one of the key issues linking — and dividing — Europe and Southeast Asia today is the controversy around palm oil.

The Controversy European action to combat climate change, perhaps ironically, has intensified the controversies surrounding palm oil. Environmental non-governmental organizations (NGOs) based in Europe, concerned by the rapid expansion of oil palm plantations in Southeast Asia, had been targeting the industry in the 1990s, campaigning around media-responsive species such as orang-utans. The exposure of the industry to negative publicity led to the formation of the Roundtable on Sustainable Palm Oil (RSPO). The stakeholder initiative, which includes leading corporations and the WWF, set down criteria for sustainable palm oil, such as a zero-burning policy and no conversion of High Conservation Value Forests. However, plans within the European Union to introduce mandatory biofuel targets for the transport sector (COM 2007) led to a furious bout of campaigning and lobbying by environmental groups against the palm oil industry. A coalition of over two hundred organizations called for a moratorium on the targets, claiming that they would lead to a massive conversion of tropical forests and contribute to global warming, rather than mitigating it (Econexus 2007). The criticism of the biofuels target is closely connected to the expansion of oil palm plantations, and is threefold. Firstly, the huge expansion, especially in Indonesia, and the resultant conversion of natural habitat to monocultures is expected to result in an accelerated loss of biodiversity (Buckland 2005; Goossens et al. 2006; Nellemann et al. 2007), symbolized by the threat to the orang-utan. Research has shown that the conversion of formerly logged or degraded forest into oil palm plantations can lead to a reduction of bird and butterfly species by 60–80 per cent (Danielsen and Heegaard 1995; Wilcove 2008). Secondly, biofuels from palm oil are seen as a “fake solution” to climate change, as the land-use changes involved in conversion release large amounts of carbon into the atmosphere (Greenpeace 2007). This applies particularly to peat forests, as highlighted by the 1997/98 and subsequent forest fires, although a similar albeit more gradual effect is achieved by draining. An influential report by Wetlands International calculated that the draining

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of Southeast Asian peatlands result in 2,000 megatonnes of annual carbon emissions, putting Indonesia “in 3rd place (after the USA and China) in the global CO2 emission ranking” (Hoijer et al. 2006). Thirdly, the palm oil industry is criticized for a number of social reasons, with reports highlighting land conflicts, labour conditions, and human rights abuses (Wakker 2005; Marti 2008). Most recently, biofuels in general have been associated with the food crisis (Bailey 2008), with a World Bank report claiming that they were accountable for 75 per cent of the rise in food prices (Mitchell 2008). The anti-palm oil “backlash” has provoked strong reactions from industry. The CEO of the Malaysian Palm Oil Council (MPOC), Yusof Basiron, argued that “attacks from overzealous NGOs” may threaten “food oil and income for the poor in producer countries” (Basiron 2008, p. 10). The attacks on palm oil by European NGOs is seen as a kind of neocolonialism, with double standards prevailing (for example, with the United Kingdom’s ratio of agricultural land to forests being 70:12 per cent as compared with Sarawak’s of 8:76 per cent [Basiron 2008]). Criticism of palm oil is also seen as being influenced by the soybean lobby and by protectionist interests in the European Union, and Basiron (2008) has also threatened to challenge a perceived discrimination against palm oil within the World Trade Organization (WTO). The “right to development” remains a key plank in Southeast Asian governments’ promotion of continued palm oil expansion. The Indonesian Agricultural Ministry’s head of research and development, Gatot Irianto, recently justified plans to reopen peat lands for oil palm plantations on the grounds that “the sector has been the main driver for the people’s economy” (Adianto 2009). In addition, the industry has been keen to promote the sustainability credentials of palm oil. A series of conferences (such as the 2008 International Palm Oil Sustainability Conference in Kota Kinabalu) and high-profile lobbying visits to Europe headed by the then Malaysian Minister for Plantations and Commodities Peter Chin have aimed to counter claims that Malaysian palm oil plantations have been established on areas covered by rainforests and to convince European Union policymakers to allow palm oil biodiesel access to the privileged European biofuels market. Proponents of the “green palm oil advantage” (Teoh 2004) stress the high productivity in relation to other oil and energy crops (with a seven-times higher yield per hectare than soybeans) and the relatively low energy and pesticide inputs (Teoh 2004). The role of the industry in reducing greenhouse gas emissions is also highlighted (Mohd et al. 2006), in particular when the methane generated

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by the anaerobic treatment of palm oil mill effluent is captured and used as an energy source (Van Zutphen 2008). A central role in the counterclaims by industry is played by the RSPO, which has been working towards improving the management practices of its members via a set of voluntary principles and criteria. These range from the commitment not to convert high-conservation value forest, a zero-burning policy, the use of integrated pest management (including the use of barn owls against rats in Peninsular Malaysia), the right to form trade unions, and the principle of free, prior, and informed consent when establishing new plantations on local peoples’ land (RSPO 2007). The RSPO is seen as integrating profitability and sustainable development in the “Triple Bottom Line”: People, planet, and profit (Teoh 2007). Although the RSPO has managed to integrate some of the NGOs critical of palm oil expansion, such as the WWF and Oxfam, it has itself become a focus of contention. Several reports have claimed that RSPO members violate the RSPO principles in practice (Milieudefensie et al. 2007; Greenpeace 2008). In 2006 the International Union of Foodworkers critized the RSPO as a “branding operation” that legitimized the “brutal exploitation that characterized the industry” (IUF 2006), and in 2008 the Center for Orangutan Protection (2008) stated that the stakeholder initiative had become “a tool to deceive the public and legitimize the environmental crimes committed by oil palm companies”. More recently, over 250 organizations signed an “International Declaration Against the ‘Greenwashing’ of Palm Oil by the Roundtable on Sustainable Palm Oil” (Anon 2008). The controversy between environment movement and industry was replicated within the political structures of the European Union, with, in the words of one commentator, a “war” taking place between the European Commission’s Directorate-General for Energy and Transport (DG TREN) and their colleagues in the DG for Environment (DG ENV). The intense debates resulted in a kind of compromise in which the mandatory target of 10 per cent renewable energy in the transport sector by 2010 remains, but where other energy sources (such as hydrogen or electric cars) can be used and where a series of sustainability criteria (Art. 17) have been attached to the sourcing of biofuels (European Parliament 2008). However, the controversy over palm oil, biofuels, certification, and the RSPO seems set to continue for some time.

A Transnational Perspective In many respects the debate around palm oil is still framed by what Pries (2001) calls the “national container state”, i.e., a world view in which the

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nation and the territorial state coincide and form the basis of international relations as the interaction between and the sum of national states. In most media coverage and most analyses, one can read about “Indonesia” producing seventeen million tonnes of crude palm oil, about superior “Malaysian palm oil”, about the problem of haze for which “Indonesia” is responsible and under which “Malaysia” and “Singapore” suffer, the campaigns of “European” NGOs etc. In many ways the use of categories and reference points that operate with the “national container state” paradigm lag behind economic, social, and political realities that are increasingly transnational in scale and logic. As an analytical framework, the concept of transnationalism, which undertakes to understand the emergence of connected and overlapping but distinct economic, social, and political spaces which cross and connect nation states without necessarily becoming a general, global phenomenon, can be useful in unearthing some of the dynamics involved in the controversy over palm oil. This contrasts with a concept of globalization as a process of global homogenization with the supposed loss of sovereignty and regulative power by nation states. Although the problem of global warming is by definition global, the underlying causes are not, and the results will be felt differently in different parts of the world. Conceptually, the global environmental governance of climate change is not a simple system of international agreements and interlocking global, regional, national, and local levels in which decisions are made and implemented, but rather an “interplay of functional interdependencies on different geographical scales” (Flitner and Görg 2008) in which different “governance networks and nodes” converge to create overlapping levels of “administrative-political and discursive-interpretative categories”. In other words, the European decision to set mandatory biofuel targets has a massive impact on a different geographic region, Southeast Asia, without being subject to any kind of negotiation between nation states within the United Nations Framework Convention on Climate Change. As an economic concept, the emergence of transnational corporations is an old phenomenon that has long been acknowledged and understood. However, it is important to stress the qualitative shift that has taken place over the last three decades from a world economy to a global economy, in which transnational linkages are absolutely key. Robinson (2004) explains this shift as one from a system of a “national circuit of accumulation and productive apparatus with international trade and financial flows” to one of “transnational productive apparatuses with a globalized circuit of production and accumulation in a single global market”. In our case, rather than palm oil and its products being produced nationally and then exported around the world, they are part of global production chains, in

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which transnational corporations (TNCs) link upstream and downstream activities across national borders. As these “avenues of capital” (Vertovec 1999) shape transnational economic spaces they can often initiate new social spaces through migration flows. Transnationalism as a concept of social science developed in the context of migration studies, after it became increasingly clear that migrants could no longer be differentiated between temporary “export products” who would return to their home country or immigrants who would eventually assimilate into their new country of residence, but that new — transnational — communities were emerging: “the key defining feature of transnational communities is that they are based in two or more countries and engage in recurrent and significant transactions, which may be economic, political, social or cultural over long periods” (Castles 2004, p. 25). The spread of oil palm plantations across Southeast Asia is creating distinct social formations of migrant workers and networks characterized by a “multi-sited social morphology”, “diaspora consciousness”, “cultural translation and hybridity”, and the “(re)construction of locality” (Vertovec 2004, pp. 449–56). The emergence of transnational communities leads to the “de-territorialization of the national space and … the de-nationalisation of the territorial state” (Mazzucato 2004, p. 143), undermining “the principle of territorial sovereignty by creating durable cross-border links, multiple identities and divided loyalties” (Castles 2004, p. 22). However, these new social spaces are still defined and regulated (for example by migration policies) by nation states: “the continued importance of the ‘nation-state’ is a key feature distinguishing ‘transnationalism’ from the supposedly more deterritorialized concept of ‘globalisation’ ” (Willis et al. 2004, p. 1). In the political terrain, transnationalist approaches have analysed ethnic diasporas and their political links with their home nation. An early example is Basch, Schiller, and Szanton Blanc’s (1994) discussion of the Haitian migrant community in New York and their sustained activities against the Duvalier dictatorship. President Aristide subsequently pronounced the New York migrants Haiti’s “Diziem Departaman” for their efforts. Yeoh and Willis (2004) discuss the transnational political spaces of Southeast Asian diasporas and their relation with the nation state. However, for the political debates around palm oil, a different kind of phenomenon is more relevant: the emergence of international nongovernmental organizations (INGOs), transnational advocacy networks (TANs), and transnational social movement organizations (TSMOs) (Smith 1997). The palm oil controversy can be conceptualized as a transnational “site of political engagement” in which “campaign coalitions” (Tarrow 2005)

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linking activists in Southeast Asia and Europe compete with industry lobby organizations and national ministries over discursive hegemony and political decision making.

The Transnational Turn in the Palm Oil Industry Although the origins of the palm oil industry in Southeast Asia date back to colonial times, substantive development, both in terms of plantation area and in industrial depth took place in the context of Malaysia’s national development strategy of the 1970s and 1980s (Teoh 2002). The plantation industry played a central role within the New Economic Policy, as symbolized by the state-coordinated takeover of the British plantation companies Sime Darby (in 1976), Guthrie (in the so-called “dawn raid” in 1981), and Harrisons and Crossfields (in 1982) (Searle 1999; Teoh 2002). This phase was clearly characterized by “national production circuits and international trade”, with government agencies such as the Federal Land Development Agency (Felda) and state capital playing a central role. The “transnational turn” since the mid 1990s was a threefold process of capital concentration, horizontal and vertical integration into global production chains, and geographic expansion of oil palm plantations from Malaysia to Indonesia and beyond. The role of TNCs was paramount. As Teoh Cheng Hai’s contribution in this volume shows, Malaysian companies in particular play a key strategic role in the region, expanding both horizontally into Indonesia, as well as downstream into further processing activities. Two leading companies, Sime Darby and Wilmar International, symbolize the rate of concentration in the industry and the growing importance of TNCs. Sime Darby is the result of a politically orchestrated fusion between the three most important state palm oil companies, Sime Darby, Guthrie, and Golden Hope (formerly Harrisons and Crossfields). With 545,000 hectares of plantations and 65 palm oil mills in Malaysia and Indonesia, accounting for approximately 6 per cent of global palm oil production (Sime Darby Plantation 2008), it is a global player in the industry. Wilmar International can be seen as Sime Darby’s private sector counterpart. Based in Singapore, it is basically a fusion between the Malaysian Kuok group, the Indonesian Martua Sitoris, and the U.S. agribusiness TNC Archer-Daniels-Midland (van Gelder 2007), with a market capitalization of over US$12 billion (Wilmar International 2007). In the financial year 2007 it accounted for the refining and/or trade of roughly 13 million tonnes of palm oil, nearly one quarter of the world total (Wilmar International 2008).

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In terms of global production chains, the scale is immense. Wilmar International’s “business activities include oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing & merchandising, specialty fats, oleochemicals & biodiesel manufacturing”, in which 67,000 people work in over 160 processing plants (Wilmar International 2008, p. 5). The Sime Darby group has also expanded downstream, with Golden Hope taking over plants in Europe, including the oil refinery company Unimills B.V. which it bought from Unilever, and Cognis Deutschland GmbH & Co., making it one of the biggest oleochemical companies in the world” (Golden Hope Plantations Berhad 2007, p. 85). The transnational expansion of oil palm plantations accelerated rapidly in the wake of the Asian financial crisis, partly because the International Monetary Fund (IMF) rescue package in Indonesia liberalized foreign investment in the palm oil sector (Ginting 2005). Casson (2000) lists a total of 45 Malaysian investors for 1998, who, together with their Indonesian partners, accounted for 1.3 million hectares in Indonesia, or nearly half the total area at that time. Both Wilmar and Sime Darby have become major plantation operators in Indonesia. Teoh Cheng Hai (Chapter 2) argues that the Malaysian corporations not only shape transnational economic spaces, but, through their “direct participation and influence” in organizations such as the Malaysian Palm Oil Association (MPOA) and the Malaysian Palm Oil Council (MPOC) also play a strategic role in the political regulation of the industry. Cheng Hai, the former secretary-general of the RSPO, argues that those companies within the roundtable can play a strategic role in improving the sustainability of the industry if they proactively pursue a “philosophy and management system that embraces the Triple Bottom Line”. In his analysis of the “Political Ecology of the Indonesian Palm Oil Industry” (Chapter 3), Norman Jiwan — on the executive board of the RSPO for the NGO Sawit Watch — takes a rather more sceptical view of the environmental and social sustainability achievements to date in Indonesia. He points to widespread land conflicts and to environmental problems such as peat land expansion, heavy dependency on agrochemicals, and waste from the mills that still plague the industry. Jiwan argues that despite the transnational dimensions of the palm oil sector, the close collaboration between large corporations and government shows the continuing importance of the state and that in addition to voluntary initiatives such as the RSPO, “government regulation is needed to enforce corporate accountability”. In their study of Riau province in Indonesia, one of the main expansion areas, Junji Nagata and Sachicho Arai from Tokyo University give evidence of a

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new trend within the expansion dynamics of oil palm plantations (Chapter 4). They show that although state and large private capital was important in the initial expansion phase, this has now been eclipsed by the role of independent smallholders, a process they term the “indigenization” of palm oil expansion. They conclude that studies of transnational economic spaces in the industry need to be qualified by an understanding of “evolutionary change” under the specific conditions of the different outer islands of Indonesia. Taking up the theme of state intervention, Mary Luz Menguita-Feranil of the Philippine Network of Rural Development Institutes takes a look at the Philippine Government’s promotion of palm oil as a development strategy (Chapter 5). Various incentives are deployed to woo transnational (mainly Malaysian) capital, but these have not been particularly successful. Violent conflicts in the main expansion areas in Mindanao and issues of food sovereignty, environment, and indigenous peoples’ rights have prevented many of the grandiose expansion plans from materializing, and those projects that do take place are of questionable development value.

Labour Migration and Transnational Social Spaces Historically, the plantation industry in Southeast Asia has been dependent on migration labour. Migrant workers were brought in from India and China to work in the plantation belt on the west coast of Peninsular Malaysia and across the Strait of Malacca in northern Sumatra. Although they initially had the status of temporary contract workers, they gradually formed permanent ethnic communities. Labour struggles in the plantation sector were an important part of the fight against the British and Dutch colonial powers and, after independence, the migrant workers were awarded citizenship, contributing significantly to the multi-ethnic composition of the modern day nation states (Ramasamy 1994; Stoler 1995; Lindblad 1999). Today the expansion of the palm oil industry is transforming the social reality of millions of people across the region. As landscapes are being shaped by extensive plantations, small-scale farmers and indigenous peoples are becoming oil palm smallholders or workers in the plantations. This transformation is accompanied by large scale movements of people from Java and Madura to the new plantation areas in Southern Sumatra, Kalimantan, West Papua, and Malaysia. In the Malaysian oil palm plantations, companies have found it increasingly difficult to recruit Malaysians for work that is seen as difficult, dirty, and dangerous (Daud 2006). The descendents of the original plantation workers

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have moved to better paid jobs in industry (including industrial downstream activities in the palm oil sector) and services (Jain 2000). For these reasons, migrants dominate work on the oil palm plantations. And although they can legally be “sourced” from a number of countries (Indonesia, Thailand, Cambodia, Myanmar, Nepal, Laos, Vietnam, the Philippines, and India; Daud 2006), Indonesians now account for 90 per cent of all foreign workers in this sector (MPOA 2005). Government policies towards the new migrants aim to keep them in a temporary status, with the tenure of employment restricted to a 3+1+1 year duration (Daud 2006), registration being linked to one employer without the right to switch, and the children of plantation workers basically having an illegal status without the right to attend Malaysian schools. However, these attempts at regulation are being constantly undermined by transnational networks made easier by the vicinity of Indonesia to Malaysia and by new and cheaper technological possibilities: “the idea of the person who belongs to just one nation-state, or at most migrates from one state to just one other, is undermined by increasing mobility, the growth of temporary, cyclical and recurring migrations, cheap and easy travel, and constant communication through new information technologies” (Castles 2004, pp. 24–25). Johan Saravanamuthu (Chapter 6), from Universiti Sains Malaysia and the Institute of Southeast Asian Studies (ISEAS) in Singapore, analyses this “transnational space” as a “flexible labour regime” characterized by “static flexibility” that depends on numerical regulation of the workforce and a subcontracting system: He writes: Paradoxically, the plantation economy today mirrors that of its colonial predecessor in that the articulation of flexible migrant labour in today’s plantation economy is equally marked by the extraction of surplus and in conditions far from satisfactory from a human rights perspective. To put it plainly, migrant plantation workers come under a labour regime which exhibits a modernized form of surveillance, control, and suppression.

One aspect of this labour regime is the definition of workers as immigrants by the Malaysian state, whose immigration law only allows for temporary employment — a system backed up with periodic expulsion campaigns. Fadzilah Majid Cooke and Dayang Suria Mulia (Chapter 7), from Universiti Malaysia Sabah (UMS), takes a look at the “moral panic” created by the media in Sabah by depicting the migrant workers as “Others” who are involved in illegality and crime. They contrast this with views of informal taxi drivers (piret) and local plantation workers who are in daily contact with migrant workers.

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11

Interestingly, contradictory views by the locals exist, with most personally having no negative experience and having casual friendships with migrants, but some nevertheless accepting some of the media stereotyping. Oetami Dewi, from the Indonesian Department of Social Affairs, discusses the social implications of palm oil development in West Kalimantan (Chapter 8). Contrasting two transnational mega-projects, the “Heart of Borneo” conservation project and the “Kalimantan Border Oil Palm Mega Project”, that were drawn up for the same spatial area but which represent very different development paradigms, she argues that both fail to take the local community culture of the indigenous Dayak into account. To reconcile a perceived contradiction between development and conservation, she argues that indigenous communities need to keep control over their common land and participate in the potential benefits of palm oil development by becoming independent smallholders rather than plantation workers or “plasma farmers”.

Transnational Environmental Activism around Palm Oil Transnational campaigning around palm oil has broadened, differentiated and intensified over the last years. If, in the early stages, the campaigns can be viewed as a continuation of anti-logging conservationist work, they are now thematically much more diversified and embedded within global “master frames” (Tarrow 2005) such as climate change or the food crisis. Correspondingly, a shift has taken place from campaigns undertaken by INGOs to “campaign coalitions” made up of TSMOs (with a broader and more active constituency or membership) and TANs (as horizontal networks of autonomous organizations) working for a common campaign goal. This deepening and differentiation corresponds in part to the transnationalization of the industry and to the expansion of oil palm plantations to Indonesia, in part to a general trend towards cross-border activism, and in part to differences in strategy within activists and NGOs working on palm oil related issues. In very rough schemata, a first “orang-utan phase” was framed within the discourse of biodiversity, in which conservationist INGOs targeted palm oil expansion in Malaysia using money collected in Europe for funding conservationist projects in Sabah. As palm oil products became ever more popular in consumer products of TNCs concerned with the image of their brands, environmental groups targeted end product users like Unilever, retail groups, and financial institutions in “no logo” type campaigns. In a third phase, corresponding to the expansion of oil palm plantations in Indonesia, campaign

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coalitions have been specifically targeting European Union decision-makers around biofuels policies. All three types of transnational activism continue to operate side by side, with varying degrees of linkages. In this way, political decisions by the European Union Parliament, decisions by consumers over which products to buy and which supermarkets to avoid, and general hegemony in public discourse and media coverage have all become part of a transnational political “palm oil” space. Naturally, this political space is also contested by the palm oil industry, which has also developed its own strategies that have moved away from condemnation and confrontation in the direction of adaptation to and integration of critics as symbolized by the RSPO. Industry is thereby creating a counter-discourse in which corporate environmental and social responsibility plays a key role, and that is directed primarily towards Europe. The emergence of this transnational political space does not mean that the actions of nation states have become obsolete. On the contrary, the decisions of European Union member states in relation to national action plans for renewable energy and their varying influence within the European Union political structures have become key areas of political struggle. And the Malaysian Government, at least, has become a key actor within this transnational debate, as shown by its repeated lobbying visits to Europe over the last years. The contribution by Oliver Pye (Chapter 9) gives an overview of campaigning around palm oil and the different connections between activists from Southeast Asia to Europe. After campaigning along the supply chain, some INGOs initiated the Roundtable on Sustainable Palm Oil in order to cooperate with industry in developing benchmarks of sustainable production. These principles and criteria remain an important reference point for campaigners working inside and outside the RSPO. However, this “institutionalized consumer power stakeholder initiative” was eclipsed by a new “transnational campaign coalition” for a Moratorium on Agrofuel Targets in the European Union. Hundreds of local groups and NGOs joined together to create networks connecting Southeast Asia with Europe in order to oppose what they saw as a “false solution” to climate change. They are worried that burning palm oil as fuel will increase demand and exacerbate many of the problems associated with palm oil plantations. One result of this campaigning has been the environmental sustainability criteria within the European Union’s Renewable Energy Directive (RED), as discussed by Joana Chiavari (Chapter 10), formerly of the Institute for European Environmental Policy. She shows that the biofuels targets adopted in the RED will likely increase demand for palm oil in Southeast Asia, but that producers will also have to meet European criteria in order to

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access this growing market. However, loopholes within the RED criteria, in particular the issue of “Indirect Land Use Change”, mean that these criteria will not necessarily guarantee future sustainable production for the sector as a whole. RED and the contentions around sustainability criteria and the use of palm oil for biodiesel redefine the context in which campaigning around palm oil takes place. Eric Wakker, a consultant at the organization Aidenvironment, shares their “Resource Trade Cycle (RETRAC)” model that was developed to “analyze capital and product flows between oil palm plantation companies in Southeast Asia and relevant decision makers” in Europe (Chapter 11). RETRAC became the basis for several successful campaigns that used it to put pressure on key brand sensitive manufacturers and banks in Europe, including Unilever and Rabobank. Wakker argues that it has also “helped trigger market-based initiatives to address the problems” (i.e., the RSPO), but that effective government regulation is nevertheless necessary to curb some of the excesses in the industry. The sustainability criteria required by Europe gives an added boost to voluntary governance initiatives like the RSPO. In this context many NGOs have become involved in ensuring that RSPO criteria are implemented on the ground. One particularly important principle — of “free, prior, and informed consent” — is discussed by Patrick Anderson from the Forest Peoples Programme (Chapter 12). He shows that one reason for many of the land conflicts associated with the expansion of oil palm plantations is that they are established on customary lands without the consent of indigenous communities. Although RSPO members adhere to this principle, they might often not have a clear idea about how to follow it. Sawit Watch and the Forest Peoples Programme have therefore developed a training programme for communities and companies, and have managed to solve some conflicts such as the case of Wilmar subsidiaries in West Kalimantan.

Looking Ahead The contributions in this publication show that the interaction between Europe and Asia is much more complex and dynamic than a simple relation between supply and demand, or of government policy within the framework of international conventions. A specific, contested regime of environmental and development governance is emerging and changing, framed by coalitions from industry, civil society, and government that operate transnationally. Although different economic, social, and political spaces can be defined conceptually, they are, of course, connected to one another even if they are

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not simultaneous in a territorial sense. The transnational turn in industry, with the related expansion of plantation area, has influenced campaigning by environmental NGOs and, at the same time, has accelerated migration. However, migration and labour issues play a subordinate role in transnational campaigns, with few links between European environmental groups and the emerging migrant rights advocates in Southeast Asia. Campaigning in Europe, reciprocally, has had a significant effect on the industry in Malaysia, symbolized first and foremost by the founding of the RSPO. The impact of the RSPO on plantation practise is again a subject of controversy and, at the same time, forms the basis of public relations campaigns by industry and government spokespersons in Europe. As the controversy around palm oil continues, new questions and important areas for future research are emerging. The expansion and concentration of an ever-growing industry requires constant monitoring to keep up with key players and their upstream and downstream businesses. In particular, as suggested by Teoh (this volume), Chinese investment into upstream facilities and new expansion plans by Chinese and Malaysian corporations into Africa could transform the industry in the future. An under-researched theme remains the key social transformations connected to an expanding industry. One key area of enquiry is the emerging multi-sited social morphology being created by the migrant workers of the oil palm plantations and mills. Looking at the politics of palm oil, examinations of European policy and transnational activism should be contextualized within the overall framework of political debate and decision-making that will link Europe and Asia on this issue in the years to come.

References Adianto P. Simamora. “Govt to Allow Peatland Plantations. Jakarta Post, 2009 (accessed 21 February 2009). Anon. International Declaration against the “Greenwashing” of Palm Oil by the Roundtable on Sustainable Palm Oil (RSPO), 2008 (accessed 6 February 2009). Bailey, Robert. Another Inconvenient Truth. Oxfam Briefing Paper 114. London: Oxfam International, 2008. Basch, Linda et al. Nations Unbound: Transnational Projects, Postcolonial Predicaments, and Deterritorialized Nation-states. Amsterdam: OPA, 1994. Basiron, Yusof. “The Way Forward towards Branded Malaysian Palm Oil”. Paper delivered at the International Palm Oil Sustainability Conference, Sutera Harbour Resort, Kota Kinabalu, Malaysia, 13–15 April 2008.

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