Oktober 2009 Environmental Challenges and the Controversy about Palm Oil Pro­duction – Case Studies from Malaysia, Indonesia and Myanmar Björn Richter, FES Singapore • After palm oil was brought to South East Asia from central Africa in the 20 th century the worldwide production has grown by 65 percent over the past decade. Demand is still in­creasing, especially after the European Union agreed to its 10 percent target for biofuels in their total transport consumption. • As biggest and second biggest producer of palm oil Indonesia and Malaysia account to­gether for more than 85 percent of the production for the world market, and trade mainly with China, the European Union and India. • Myanmar started as well with palm oil production but is also investing heavily in ´Jatropha curcas´-tree for an alternative biofuel. • The massive growth of the plantations is causing enormous environmental problems like monocultures, loss of biodiversity and climate change but as well social issues caused by lack of workers' rights and diverse conflicts with indigenous people. • The“Roundtable on Sustainable Palm Oil“ was founded in 2004 to tackle these issues, but so far the multi-stakeholder platform consisting of the palm oil industry, related manufactur­ers and civil society has only made limited progress. From Seeds to World Markets During the last couple of years palm oil pro­duction was not only booming in South East Asia but is well-known also in Europe and other Western industrial nations due to the transnational campaigns against the environ­mental and social problems caused by the huge plantations. The palm oil plant, Éä~Éáë= ÖìáåÉÉåëáë, originates from central Africa and was brought by the British colonial industry to South East Asia only in the beginning of the last century. After almost 100 years palm oil is now increasingly being produced on large­scale plantations in tropical lowland regions especially in Indonesia and Malaysia as well as on the Philippines, in Myanmar and Thailand. Today the world market consists of 38.13 mil­lion tons annually, and Indonesia and Malay­sia as largest and second-largest producer of palm oil in the world account together for more than 85 percent of exports, mainly to China, the European Union and India. The world largest companies páãÉ= a~êÄó(state­owned by Malaysia, 531,299 hectares planta­tions, 65 palm oil plants in Malaysia and In­donesia, around 100,000 workers) 1 and táäJ ã~ê= fåíÉêå~íáçå~ä(world biggest private palm oil trader with 500,000 hectares plantations, 33 palm oil plants all over the world, around 70,000 workers) 2 give an idea of the rate of concentration in this industry. The plant and their derivates cannot only be used for biofuels but for more than 60 related products. Today it is widely used also as cook­ing oil, food ingredients and cosmetic prod­ucts, for products of the chemical industry as well as animal feed. Big multinational compa­1 See Sime Darby, 2008:“Annual Report 2008”, Kuala Lumpur 2 See Wilmar International, 2008:“Growing in Challeng­ing Times”, Singapore