Indonesia palm oil lobby pushes 1 million hectares of new Sulawesi plantations

A palm oil industry body and a state-owned company are proposing a vast new palm oil plan encompassing around 1 million hectares (nearly 2.5 million acres) of new plantations across the Indonesian island of Sulawesi.

“This growth will not only increase income for companies, but also for smallholder farmers who depend on oil palm cultivation for their livelihoods,” said Machmud Achmad, acting head of PT Sulsel Citra Indonesia (SCI).

SCI is a form of municipal state-owned company, known in Indonesia as a Perseroda, which is owned by the South Sulawesi provincial government. SCI has proposed the new plantation area together with the Indonesian Plantation Companies Association (GPPI), an industry body.

On May 21, SCI and GPPI signed a memorandum of understanding to collaborate toward initiating the project, dubbed the Sulawesi Palm Oil Belt. The new palm oil belt plan includes areas in South Sulawesi province covering 100,000 hectares (247,000 acres), 290,000 hectares (717,000 acres) in Southeast Sulawesi, 120,000 hectares (297,000 acres) in West Sulawesi and 300,000 hectares (741,000 acres) in Central Sulawesi, with Gorontalo at 95,000 hectares (235,000 acres) and North Sulawesi at 70,000 hectares (173,000 acres).

Palm oil companies in Indonesia, the world’s leading producer of the ubiquitous edible oil, cleared 30,000 hectares (74,100 acres) of rainforest for plantations in 2023, an increase from 22,000 hectares (54,400 acres) in 2022.

Estimates vary, but the total area used for oil palm plantations in Indonesia accounts for at least 13 million hectares (32 million acres), a combined area the size of Greece. The vast majority of that has been established this century in one of the greatest explosions of industrial agriculture the world has seen.

The memorandum of understanding includes plans to invest around 1.3 trillion rupiah ($81 million) to develop palm oil downstreaming facilities, which would connect plantation areas to supporting processing factories.

The proposal details construction of a palm oil mill with a capacity of 45 tons per hour, which would be capable of producing 30 million liters (7.9 million gallons) of cooking oil annually. The mill would also produce fertilizer marketed as organic to the agricultural sector.

Machmud expects the project has the potential to transform local economies in much of Sulawesi, creating thousands of jobs and supporting small farmers.

He also said the public company should be able to obtain revenue from carbon credits owing to the belief that fertilizer produced will have a lower emissions profile compared with fertilizers reliant on inputs from natural gas.

Face palm
Uli Arta Siagian, plantations lead at the Indonesian Forum for the Environment (Walhi), a prominent national pressure group, said the million-hectare plan would worsen the ecological crisis unfolding across much of Sulawesi owing to mining.

The eastern Maluku and Sulawesi region of Indonesia is already enduring extensive disruption by the mining industry as the epicenter of an extraction boom for the nickel used in electric vehicle batteries. The six provinces in Sulawesi lost a combined 906,100 hectares (2.2 million acres) of old-growth forest and 2.2 million hectares (5.4 million acres) of total tree cover from 2002-23, according to Global Forest Watch.

Uji said deforestation for palm oil that was then sold as an environmentally sound fertilizer should not be considered applicable for climate financing.
“How is it possible that downstream businesses can get carbon incentives, while upstream industries produce carbon by clearing forests?” Uli told Mongabay Indonesia.

The province in the Sulawesi region with the greatest loss was Central Sulawesi, which experienced a reduction of 396,000 hectares (979,000 acres) of primary wet forest and 813,000 hectares (2 million acres) of tree cover, resulting in 563 metric tons of CO₂e emissions.

“This million-hectare oil palm project is exploitative, will add new burdens and eliminate Sulawesi’s ecological capacity to protect the lives of surrounding communities,” Uli said.

Arie Rompas, forests lead at Greenpeace Indonesia, said the plan risked extensive deforestation that the nation could not afford under its remaining carbon budget.

President Joko Widodo has committed to the United Nations Framework Convention on Climate Change to reduce Indonesia’s emissions by 31.9% by 2030, with a majority of the emissions saved from changes to the land use sector.

“This project has the potential to create deforestation,” Arie said. “This will limit raw materials and derivatives from being accepted by the global market.”

A palm oil boom overseen by an inexperienced regional company could exacerbate an already precarious situation, he noted.

Impact zone
Sulawesi is part of the Wallacea region, a biogeographic transition zone rich in biodiversity named for naturalist Alfred Russel Wallace, who identified much of its unique fauna and flora in the 19th century. According to research by the Makassar Forestry Research Center, Sulawesi is home to at least 127 types of mammals, 79 of which are endemic, such as the anoa, tarsier, babirusa, Sulawesi bear phalanger (Ailurops ursinus) and Selayar tarsier (Tarsius tarsier). Sulawesi also accounts for 328 known bird species, 230 of which are nonmigratory, including the critically endangered yellow-crested cockatoo (Cacatua sulphurea).

Riszki Is Hardianto, a researcher from the Auriga Nusantara Foundation, an NGO, warned that the million-hectare palm oil plantation project could have a devastating impact on already threatened biodiversity in Sulawesi.

“With such a large area, there is a big risk of encroaching on the habitat of endemic species in Sulawesi,” Riszki told Mongabay Indonesia.

Gifvents Lasimpo, director of the Kompas Peduli Hutan Foundation (Komiu), said that much of the existing palm oil landscape in Sulawesi was subject to land conflicts.

A 2021 report by Greenpeace and technology consultancy TheTreeMap showed that 3.12 million hectares (7.7 million acres) of oil palm plantations, an area equivalent to the size of Belgium, have been established within government-designated forest zones in Indonesia, where commercial agriculture is legally prohibited.

Work by the Komiu Foundation found three out of 16 palm oil companies in Sulawesi had encroached into state forest areas, destroying the habitat of endemic animals.

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