Palm Oil

NATIONAL CENTER FOR CASE STUDY TEACHING IN SCIENCE “What we are doing to the forests of the
world is but a mirror reflection of

what we are doing to ourselves
The Demise of the and to one another.”

– Chris Maser, Forest Primeval:
Forest People: The Natural History of an

Ancient Forest
Malaysian Palm Oil and the

Threat to Orangutans
by
Katherine A. Kurth, Tomika M. Haller, and Annalisa L. Sharkey
Center for Conservation Medicine
Cummings School of Veterinary Medicine at Tufts University
Part I – Economic History of Malaysian Palm Oil

You could hear the sadness in their voices. It wasn’t as if we could speak the language nor did we know what they were
saying, but it was almost as if the sounds of desperation in their voices could tell their story better than the words itself.
Hope and I listened to the loud wailings of tired fisherman singing throughout the entire night, often wondering if
this form of acoustic punishment would ever stop. This was our first night in Kampung Belungkor, a small fishing
village situated on the southeastern tip of peninsular Malaysia. We had just arrived earlier that day and we would
remain here for the next three weeks to study the mangrove forests. The owner of the local restaurant told us that they
sang karaoke every night and that we were welcome to attend if we wanted to. We didn’t think much of the offer until
that first night as we lay awake realizing that as long as there was karaoke, we would not sleep. Behind the restaurant
we laid in the darkness of our tiny bungalow wondering about the secrets of this forgotten little town, and what about
it made all the men sing sad songs over an empty river to an empty audience.
Groggy and tired, we reluctantly set off in the morning on our first boat tour of the mangrove forests given by a fisher-
man named Abang Ma’hid. As is customary in these rural parts of Malaysia, the men of the village were all referred to as
“Abang,” meaning brother. Abang Ma’hid was to be our local guide during the rest of our stay. Hope and I were here to
study the mangroves but more importantly, to understand the threats to forests from the perspective of the locals.
As we sat on the boat, I began to ask Abang Ma’hid all
about the villagers and the jungle and his opinion on how
to preserve the land. He started by bringing us to his fishing
spot, showing us how the changing tides helped to funnel fish
that were sheltered in the mangrove roots into the cages. He
described to us the delicate balance between the forests and
fishing, how his way of life and the rest of the villagers were
entirely dependent on the forests to provide them with fish
they ate and sold. “Fishing has been the way of life for all of
us for centuries. This fishing net was built by my great grand-
father and I still use it today. Unfortunately, I fear I will be
the last one of my kind to use it.” Seeing the bewildered look
on our faces, he continued on, telling us how the oil palm
Figure 1. Boat ride. Credit: Katie Grassle.
“The Demise of the Forest People” by Kurth, Haller, & Sharkey Page 1
NATIONAL CENTER FOR CASE STUDY TEACHING IN SCIENCE
plantations surrounding the village were destroying the forests

and polluting the rivers so much that the red snapper that was
once plentiful had since disappeared. I recalled the vast fields
of oil palm we drove through on our way to the village just
the previous day. As far as the horizon, all anyone could see
was oil palm. I was reminded of how the neat matrices of leafy
trees occupied every stretch of land from Kampung Belungkor
all the way to the next closest town an hour away. Abang
Ma’hid went on to say how much the land had changed in
his lifetime, how the jungles that he played in as a child were
no longer. “Everywhere you look are plantations. These men
that work on the plantations are not Malaysian. They are from
Figure 2. Boat ride. Credit: Katie Grassle.
Indonesia or Nepal and paid less than Malaysian workers. We
cannot afford to work those jobs. These people do not share the same values of this land and they destroy it by cutting
down the forests to plant oil palm. They think oil palm will make us rich by building roads and making jobs, but they
do not care to know what makes us rich. From these forests we are wealthy; without them we are nothing.”
With those last words, I looked at Abang Ma’hid and noticed the weathered wrinkles on his face and the tiredness in
his eyes that seemed to tell this same story. I came to realize that the songs they were singing must be of some relief to
these villagers that feel hopeless in their own land. That through song, they could somehow live in the echoes of their
past before the oil palm plantations destroyed their land. It was as if their songs could somehow carry their messages to
ancient relatives that stood guardian to this town and to their way of life for so many years. Before long, I had con-
cocted images of spirits living amongst the roots and leaves of the jungle that paralleled many stories of native folklore
I had heard throughout my lifetime.
As we sat there, baffled and troubled by the words of this wise old fisherman, he smiled and said, “But you have come
here now and you will help us save the forests.”
2
Background
Located on the Malay Archipelago, Malaysia is the only country
with territory located on both mainland Southeast Asia and on
the islands between the Asian continental mass and Oceania.
It is comprised of two major physical regions whose landscape
and climate favorably predispose the land to intense agricultural
development. The influences of a tropical equatorial climate
and ample rainfall supported the cultivation of traditional crops
such as rice and rubber for centuries prior to the introduction
of oil palm. The advent of oil palm would not come about until
the late 1950s, the same time Malaysia was granted indepen-
dence from British rule.
Agricultural Development Era

Through the leadership provided by Dutch and British coloni-
zation, Malaysia had long since been established as a dominant
Figure 3. Map of Malaysia.
producer of agricultural products in the world market. How-
ever, due to the financial costs of a Second World War and invasion by the Japanese, the British were forced to with-
draw troops from Malaysian territory and ultimately grant the country its independence. At the same time, recurrent
fluctuations of rubber prices in the world market had immediate and widespread effects on incomes and employment,
leading to hardship for many smallholders, or farmers/owners of land typically smaller than 50 acres (Fan et al., 2013).
This sudden change in the investment climate prompted concern over Malaysia’s viability and lead to the creation
of the First Malaysian Plan in 1956. Under the provisions outlined, the plan invested 15.9% of the Malaysian total
budget into programs designed to provide opportunity for agricultural and rural development throughout the country
(Bank, 1986; Yahya, 2001). Joint committees of inquiry were formed between government authorities and private
estate owners that reviewed prospects for diversification in several sectors of Malaysia’s agriculture. Reports found
diversification of tree crops as promising and promoted the expansion of cocoa and oil palm. By 1965, the agricultural
sector had undergone an unprecedented boom and generated the most substantial contributions to the national gross
domestic product (GDP) during this period (Bank, 1986).
Seeing the importance of agriculture to the development of rural areas, a major conference was led in 1969 where
then Deputy Prime Minister, Tun Haji Abdul Razak, strongly emphasized the need for agricultural diversification as
a national policy (Bank, 1986; Olaniyi & Abdullah et al., 2013). The link between agriculture and rural development
was thought to help improve the economic and social wellbeing of remote citizens as well as rectify the economic
imbalance between urban and rural areas. This national policy ultimately lead to the formation of the Malaysian
Agricultural Research Development Institute (MARDI) and the Agricultural Credit Bank of Malaysia. These authori-
ties were created to support federal and state programs that promoted the expansion of crops other than rubber.
Diversification programs continued to expand well into the 1980s where generous subsidies were given to farmers to
produce crops such as vegetables, groundnuts, tea, fruit, rice, tobacco, cocoa, and oil palm (Bank, 1986; Yahya, 2001).
Additional government intervention was focused on the risk to smallholders that regularly endured extreme misfortune
during market recessions. It was therefore decided that farms deemed un-economic in size would be modernized and
consolidated through local land development. These programs were funded through the creation of the Agricultural
Marketing Authority (FAMA) and the National Agriculture Policy (NAP), which gave producers an alternative to
private traders in exchange for their lands (Bank, 1986; Olaniyi & Abdullah et al., 2013).
Pre-Industrial Era
Many of the policies created during this time were directed towards increasing productivity and the need for the
agriculture sector to be efficient to sustain growth in the long run. By 1985, agriculture accounted for 23% of the
GDP with the greatest growth in tree crops due to the comparative advantage in Malaysian climate and soil suitability
(Lai & Ee, 1988). Production in rice, pineapples, vegetables, fruit, tobacco, tea, pepper, groundnuts, and coconut
did not meet with the same success as oil palm and continually declined throughout this era (Yahya, 2001). Upon
analysis of failed regimes, the Malaysian government decided it could no longer continue to afford to fund large scale
diversification programs if its agriculture sector wished to remain competitive. The focus shifted to tree crop produc-
tion exclusively. With this revelation, oil palm production intensified while natural resource suitability fell to the
wayside as economic factors and institutional support took higher precedence in national policy making. As promised,
government programs that funded oil palm production helped fulfill the mission of readdressing economic and social
imbalances. Oil palm production created numerous downstream supporting industries such as mills, refineries, and
manufacturers that aided in reducing poverty levels from 49% to 18% by 1984 (beginning in 1970) (Olaniyi &
Abdullah et al., 2013). The economic factors that favored oil palm production were the regular income and relative
income stability. Additionally, the continued expansion of oil palm was supported by the regular demand for labor
as well as institutional benefits that produced financial, research and marketing services readily available for further
development (Bank, 1986).
In the first half of the 1980s, palm oil and timber production rose by 60% and 12%, respectively, while all other lead-
ing exports fell drastically. The world recession in 1980 had greatly impacted the Malaysian economy due to its large
export sector (Bank, 1986; Olaniyi & Abdullah et al., 2013). The effects of the recession created highly unfavorable
conditions for the agricultural industry and priorities were given to Malaysia’s manufacturing section that appeared to
withstand market fluctuations better. The outflow of resources from agricultural programs resulted in labor shortages
as more people moved to cities to follow job opportunities in manufacturing. The associated effects of urbanization
began to deepen the challenges in the agricultural sector as increasing wages and competition for land marginalized
smallholders who greatly depended on a large government presence (Bank, 1986).
From 1965–1985, there was a 122% increase in agriculture land development, representing a growth rate of 3.54%
each year. From 1986–1995, the growth rate reduced to 1.43% as more smallholders abandoned the cultivation of
food crops in favor of oil palm (Bank, 1986). It had become economically unfit to grow other crops since cheaper
labor production costs in Burma and Indonesia made prices of food products cheaper for Malaysians to buy (Lai &
Ee, 1988; Yahya, 2001). Failure to reconcile credit operations between the government and banks failed to produce
diversification packages assisting struggling smallholders. Interested banks were left with only one alternative; they
would focus their interests in oil palm government programs as their main focus while testing diversification at its
margin (Bank, 1986).
Industrial Era
In the wake of the 1997 Asian financial crises, the Malaysian government responded with the formation of a new
National Agricultural Policy (NAP) in 1998. The plan replaced the second NAP that was made to address the ef-
ficiency, competitiveness, and productivity of Malaysia’s industries. In this new plan, Malaysia would become a top
income nation in the next few decades by maximizing income through the optimal utilization of its resources (Olaniyi
& Abdullah et al., 2013). The plan would increase the contributions of its agricultural sector to the national income
and increase earnings by substantially reducing exports in rubber, rice, coconut, and coca in favor of oil palm (Bank,
1986; Yahya, 2001; Olaniyi & Abdullah et al., 2013).
The historical changes in the socio-economic structure of Malaysia have since resulted in the current monocrop regime.
Today, Malaysia and Indonesia account for 70% of all oil palm products available in the world market. The contribution
of exports in Malaysia’s agriculture is currently at the lowest since its establishment in the mid-1950s. At the same time,
the oil palm industry accounts for 63.4% of all agricultural land use with the next greatest being rubber plantations at
19.6%. Land reserved for food crops has diminished to only 16.3% of the land, representing nearly half of the original
area that it once occupied. If the guiding focus of Malaysia is to provide income opportunities for its citizens through
growing job opportunities, it can be expected that Malaysia will continue to increase the productivity of its palm oil
industries in order to effectively compete with other low-cost producing nations (Olaniyi & Abdullah et al., 2013).
Questions
1. How will Abang Ma’hid’s life change as more native land is converted to palm oil plantations?
2. Why has palm oil production increased?
3. What are some of the negative and the positive aspects of palm oil production?
4. Given that the need for oil palm has steadily increased over the past few decades, how do the policies enacted by
the Malaysian government threaten their economic viability and susceptibility to future market crashes?
Part II – Corporate Stakeholders and Smallholders

Evans looked over the boardroom, running his hands through his hair in frustration.
“Well people, what are we going to do to save this company and the jobs of 20,000 people?”
Alexander Evans had very little time until the large agricultural conglomerate Jenkins, Vincent, & Miller Incorporated
(JVM Inc.), which he ran as CEO, went bankrupt. He had gathered the board members that day to pitch last ditch
business proposals. Evans needed something drastically more efficient to bolster his company. After hearing a mo-
notony of similar ideas all morning there was only one pitch left.
“Don’t worry Mr. Evans, I have an idea that will rid us of our worries.” Evans wearily motioned for the board member
to continue. “Palm oil. Oil palm is one of the most profitable crops. We can make six times the profit of other crops.
That kind of revenue could easily save this company.” Evans looked up, his interest piqued while the board member
continued. “We can also be a part of an association called the Roundtable for Sustainable Palm Oil. That will allow us
to present a ‘greener’ image to the public,” he emphasized with finger quotes.
“Let’s not get ahead of ourselves,” Evans admonished. “Show me the numbers and let’s go to work establishing our first
plantation. We can worry about the finer details after our crops are in the ground. We have jobs to save.”
2
Background
Corporations and agricultural conglomerates have
invested in palm oil for various reasons. Oil palm is one of
the most profitable crops. Companies average $528–$790
USD per hectare revenue (Nantha, 2009). By comparison,
corn profits in the United States at their peak were $138
per hectare (USDA, 2011). This discrepancy is due to the
demand that palm oil has garnered for both food and fuel.
Oil palm production stimulates public and political sup-
port because of its economic benefits. Due to this support,
expansion is probable (Acrenaz et al., 2014). In Southeast
Asia, demand is projected to continue to increase for
the next four years as a result of biodiesel consumption
mandates. This will require palm oil to be produced on
an even larger scale than currently, necessitating more Figure 4. Mature palm fruit.
plantations (Mukherjee & Sovacool, 2014).
Smallholders
Larger corporations and agricultural conglomerates also have the opportunity to control smallholders’ land in exchange
for supporting them. Smallholders can choose to cooperate with the private sector. This means smallholders must give
away a large portion of their ability to make decisions in terms of profit and land use in exchange for support (Mukher-
jee & Sovacool, 2014). Companies support smallholders through technical assistance, distributing seeds, fertilizers
and pesticides. These are given on a loan basis and the supporting corporate investors take a large profit margin of the
smallholders’ yields. Most contracts are binding for at least 15 years and smallholders are frequently granted no land
rights. Supported smallholders often remain in these agreements due to fear of losing their land, not understanding the
terms of agreements, and unreasonably high costs of land reclamation (Vermeulen & Goad, 2006). Popular belief is
that smallholders are treated as indentured servants who are incapable of overcoming their debt (Block, 2016).
In addition to human rights conflicts, palm oil production also comes with financial risk. By combining multiple
markets, food and fuel, producers are vulnerable to changes in the global market. This includes potential boom and bust
cycles, which are varying periods of high and low economic activity (Ancrenaz et al., 2014; Neilson, 1954). In other
words, the palm oil market is vulnerable to bottoming out, or being at the lowest market price (Ancrenaz et al., 2014).
Questions
1. What is Alexander Evan’s stakeholder position?
2. What are the financial aspects of palm oil production?
3. What should businesses presented with the opportunity of the palm oil industry do?
Part III – Palm Oil and the Global Market

The line at the airport McDonald’s flowed out the door and around the corner. My stomach growled loudly in protest.
Looks like fast food is out, but I’d promised Hope I would return with sustenance. I wandered away from the food
court toward the rows of shops selling local snacks, sodas, and terrible books. I gazed absentmindedly at the rows of
sugary snacks trying to transform them into a hamburger and fries, but alas the gummy bears remained gummy bears
and the red vines remained red vines. I was shaken from my daze by a light tap on the shoulder. I whirled around to
find a girl behind me—she couldn’t have been older than 19. Her bright red hair was coiled on top of her head and
her blue eyes sparkled.
“Having trouble deciding?” she asked.
“Am I that obvious?” I replied. She shrugged and giggled a little. “There are just so many options and the last few weeks
have taught me that I have a lot to learn about the world,” I said, sheepishly.
“Can I make a suggestion?” she offered. I nodded and she reached up for a Cadbury’s Dairy Milk Bar and Delba
Pumpernickel Snacks. “Here, try these. They aren’t made with palm oil. You never know where that stuff comes from.
Oh! That’s finally my flight being called! I’m headed to Sumatra and I can’t wait!” She handed me the snacks and with
a little wave she was gone.
“Thanks!” I shouted after her. I headed to the register and back to Hope. She would never believe this, not after our
time with the fishermen in the mangroves!
2
Background
In 2015, nearly 50% of all Malaysian palm oil was exported to three primary consumers: India, the European Union,
and China (MPOB, 2015). These nations are representative of the fastest growing populations worldwide as well as
having the three largest shares of the current world population. But what specifically about these nations is driving the
market demand for palm oil?
In terms of agricultural land use for oilseed production, oil palm accounts for only 5.5% of the total 258.9 million
hectares of land planted in 2012 (MPOB, 2012). Concurrently, palm oil and its derivatives support the greatest
proportion of vegetables oils produced at 32% of the total 186.4 million tons worldwide (MPOB, 2012). Palm oil is,
therefore, the most efficient oil seed available on the market today.
Poverty and Food Security

Measured by the number of individuals living with less
than $1.25 per day, the greatest numbers of people living
in absolute poverty reside in China and India (Roser,
2016). In a report by the World Bank, India has nearly
300 million people living in absolute poverty while the
two next countries, Nigeria and China, have 107 million
and 85 million, respectively. This extreme economic
disparity is one of the biggest drivers to palm oil con-
sumption for many developing nations. Food security
is often cited as the leading issue for many people in
India and China since financial limitations preclude
impoverished citizens from purchasing higher quality
oils (Damodaran, 2015).
Figure 5. House in Malaysia. Credit: Anna Sharkey.
Health and Nutrition

Estimates by the World Wildlife Foundation have reported that as much as 50% of all packaged products contain palm
oil. The advantages of using palm oil in manufactured goods are primarily based on the high levels of saturated fatty
acids, roughly 50%, that make additional hydrogenating processes unnecessary as with other oil types (Edem, 2002).
Hydrogenated oils, in turn, help to lengthen the shelf life of food products making the relative usefulness of palm oil a
highly cost-effective ingredient for food manufacturers (Edem, 2002; Sundram, 2016). Additional compositional benefits
include high amounts of antioxidants, beta-carotene, and vitamin E compounds that provide much needed nutritional
support for the billions of people in poorer nations who may otherwise succumb to malnutrition (Sundram, 2016).
Several reports have proven numerous health benefits of palm oil consumption. Diets rich in unprocessed palm oil
may decrease the risk of cardiovascular disease through reduction of the following (Edem, 2002; Odia et al., 2015):
• endogenous cholesterol;
• arterial thrombosis and atherosclerosis;
• platelet aggregation; and
• blood pressure.
In 2015, the World Health Organization listed stroke and ischemic heart disease as the third and fourth, respectively,
leading causes of death in low-income countries. In all other countries listed, from lower-middle income to high
income, death due to ischemic heart disease and stroke were the top two listed causes of death (WHO, 2017). Due to
this increase in prevalence of cardiovascular disease worldwide, the benefits of palm oil consumption may go beyond
just financial incentives. Unfortunately, a sizable amount of commonly used palm oil occurs in the oxidized state,
which can pose serious risks to the biochemical and physiological functions of the body (Edem, 2002). The reactivity
of oxidized palm oil has been shown to induce adverse lipid profiles and has been linked to reproductive toxicity and
toxicity of the kidney, lung, liver, and heart (Edem, 2002). Since palm oil consumption in India has increased in
“poorer households, especially in states like Odisha, Chhattisgarh, Jharkhand and West Bengal,” the associated health
risks can lead to potentially devastating medical issues that disproportionally affect the poor (Damodaran, 2015).
Biofuels
In order to meet the needs of a growing population, China
and India are likely to remain dependent on the availability
of cheap palm oil for food and consumable goods. However,
projections of the annual total population for each far
surpass the next largest consumer of Malaysian palm oil, the
European Union (Figure 6). While the majority of palm oil is
primarily used for consumption, biodiesel sourced from palm
oil has increasingly become more prevalent throughout the
European Union (EU). From 2007–2008, the EU increased
production substantially from 7,377 million liters to 9,164
million liters, making it the world’s leading producer of
biodiesel (Sorda & Banse et al., 2010). An estimated 4.9 mil-
lion tons of biodiesel were produced in 2006, of which 80%
were sold in three countries: Germany (63%), France (14%), Figure 6. Total population. Data from World Bank, http://data.
and Italy (5%) (Kutas & Lindberg et al., 2007). worldbank.org/indicator/SP.POP.TOTL.
The popularity of biodiesel in many of these countries originally came about through adoption of government policies,
such as the Renewable Energy Directive 2009/28/EC. The directive promoted increased use of renewable fuels in order
to offset greenhouse gas emissions due to fossil fuels (Council, 2009). The directive specifically “sets targets for all EU
countries with the overall aim of making renewable energy sources account for 20% of EU energy and 10% of energy
specifically in the transport sector by 2020.” In Germany and France, the top two producers of biodiesel, meeting
specific quotas from biofuel production are incentivized by specific tax reductions or exemptions (Sorda & Banse et al.,
2010). Additionally, “crude palm oil for industrial use” is the only vegetable oil used for biodiesel production free from
any import taxes (Kutas & Lindberg et al., 2007). All other imported oils, including crude soy, sunflower, and rape
oil, have a 3.2% most favored nation (MFN) bound tariff while tariffs on ethanol are considerably high: €19.2 per
hectoliter (or 63% ad valorem equivalent in 2004) (Kutas & Lindberg et al., 2007). While currently the most com-
mon feedstock for biodiesel production is rapeseed oil, estimates in Germany have proven the cost efficiency of palm
oil biodiesel is less than a third of the production cost of its oil counterpart (Kutas & Lindberg et al., 2007). Therefore,
it is anticipated that palm oil consumption in these countries will increase as long as there are policies intended to
increase biodiesel production (Kutas & Lindberg et al., 2007; Sorda & Banse et al., 2010).
Questions
1. Why is palm oil usage so widespread?
2. How likely is it that you consumed or used a product containing palm oil today?
3. Do the individual health and economic benefits outweigh the global detriment caused by palm oil production?
Why or why not?
Assignment
In order to understand how your consumer choices are contributing to the global demand for palm oil, complete the
assigned worksheet and answer the following questions.
1. Out of the products you use each day, how many contain palm oil?
2. For each product containing palm oil, find an alternative that does not contain any palm oil products.
3. Have a family member or friend complete the worksheet. Use your knowledge of the palm oil industry that you’ve
learned so far to educate your peers about making sustainable consumer choices.
4. Write a small reflection piece of your findings through this assignment. What surprised you the most? How did
your family/friends react to this assignment? Brainstorm some solutions on how to educate the public about
products containing palm oil.
Part IV – The Environment and Threats to the Orangutans

Ellie collapsed into her bunk. She was exhausted, frustrated, homesick, and downright angry; her mind raced back
to when it all started. Ellie had been five-and-a-half years old when her mother decided they could no longer stand
watching a singing mermaid. That fateful day Ellie’s favorite cartoon had been replaced by her mother’s favorite—The
Jungle Book. From the moment Ellie saw King Louie, the resident orangutan and swing music aficionado, she was
hooked. Today she was working her dream job, or so she had thought.
“‘Go to Sumatra,’ they said. ‘Work with orangutans,’ they said. ‘It’ll be fun,’ they said.” Ellie mumbled under her breath
as she knotted her bright red hair on top of her head, her blue eyes flashing in the sun. She recounted the last 14 days of
her life. She’d suffered through an overnight layover in Kuala Lumpur and then her flight touched down at Minangkabu
International Airport and she’d been swept up in a flurry of orientation slideshows, names, and faces. Before she knew it
she was thrust into a tropical rainforest looking for the elusive orangutan. They had been tracking a mother named Siti
and her offspring all over a section of forest. Usually they wouldn’t be so dogged, but they believed Siti had given birth
earlier in the week. They were honing in on the telemetry signal when they got the warning; fire had broken out just
outside the border of the sustainable oil plantations. They would have to wait until tomorrow to make sure the orang-
utans were okay. On the way out of the forest she couldn’t help but stare at the blazing sign that read “Future Home of
JVM Incorporated,” and a trickle of rage went up her spine. Another company to strip the forest clean.
2
Background
The Fires of Malaysia and Indonesia
Slash and burn farming is defined as a method of agriculture in which existing vegetation is cut down and burned off
before new seeds are sown, typically used as a method for clearing forest land for farming (EcoLogic, 2014). The purpose
of this type of land clearing is to imbue the land with nutrients, albeit short lived (Thomaz et al., 2014). The fires burning
in Indonesia cause devastation to prime orangutan habitat. Between 1997 and 1998 fires were estimated to have killed
roughly 1/3 of the orangutan population. These fires alone released one billion tons of carbon dioxide into the atmosphere.
The fires are typically worse during El Niño years because of the abnormally warm and dry seasons (World Bank, 2015).
The burning of the fires also has far-reaching human health consequences. It is estimated that the smog from the fires
is responsible for 500,000 cases of severe respiratory disease leading to 100,000 premature deaths each year. The debris
from the fires affects people across Malaysia, Indonesia, and southern Thailand. The Indonesian government estimates
the disease and loss of production cost the country $47 billion USD in 2015 (World Bank, 2015).
The Plight of the Orangutan

Translated from the Malay and Indonesian words
meaning “man of the forest,” orangutans are categorically
a class of great ape. Orangutans are elusive creatures that
spend the vast majority of their time in the dense canopy
of the peat and tropical forests of Malaysian Borneo and
Sumatra. They have a long lifespan (35–45 years), do not
reach maturity until around 15 years old, and can take
up to eight years between offspring (Tisdell, 2011). Ac-
cording to the World Wildlife Fund, in the last century
orangutan numbers have plummeted fourfold to about
50,000 individuals remaining in the wild as of 2006.
This drop occurred at the same time as the destruction
of orangutan-suitable habitat through agriculture-
necessitated deforestation and rampant forest fires. In
the last two decades roughly 5.5 million hectares of Figure 7. Juvenile orangutan. Credit: Katie Grassle.
prime orangutan land have been lost (WWF, 2016). Deforestation is not solely to blame for the loss of thousands of
orangutans. They are also greatly valued in the illegal pet and bush meat trades (WWF, 2016).
It is important to remember that orangutans act as an umbrella species in the Malay Archipelago (Tisdell, 2011).
Preserving orangutans will, in turn, help preserve less charismatic plants and animals. Because they tend to be solitary,
it can take a large area to sustain multiple animals (Nantha, 2009). Conserving the land necessary for a sustainable
population of orangutans will also protect valuable forest land for some of the area’s other endangered species includ-
ing the Sumatran rhinoceros, the Borneo pygmy elephant, and the Malayan tiger—all of which are on the IUCN Red
List of Threatened Species as endangered or critically endangered (IUCN, n.d.).
Biodiversity refers to the variety of life. In the context of the Malay Archipelago, it refers to ecological biodiversity
or the myriad of ways animals/humans interact with the environment in which they live. A more difficult idea to
conceptualize is the economic worth of biodiversity. The orangutan, and the other endangered animals of Borneo and
Sumatra, do not carry inherent monetary value (Nantha, 2008). They are not useful as work animals, they cannot earn
money for themselves—how can their value be demonstrated to an impoverished population? According to Nantha
and Tisdell (2008) the value of the orangutan, specifically, can be broken down into two categories—direct value and
ecological value.
As discussed, the orangutan has qualities that make observing it in the wild difficult. The bulk of orangutan tourism
dollars are spent on visits to orangutan sanctuaries and rehabilitation facilities (Nantha, 2008). In addition there
are tourism companies that take visitors on expeditions to track and view orangutans in their natural habitat. One
company, Red Ape Encounters in Sabah, earns roughly $45,500 per year. They are able to funnel ~56% of this back
into the community. Aside from tourism there is no direct value of the orangutan that preserves its numbers in the
wild. Hunting for meat and poaching for illegal trade bring revenue into the community but don’t conserve the species
(Nantha, 2008).
Ecological value is much more difficult to quantify. The ecological value of orangutans stems from their natural
function in the ecosystem (Nantha, 2008). Their frugivorous diet makes them excellent seed dispersers. This directly
maintains healthy forests, which in turn provide innumerable benefits to the tropical ecosystem. What Nantha and
Tisdell point out though is that such ecological value is dispersed over the world population while the brunt of the
cost is heaped on the local people. This makes it very difficult to explain the benefits of conserving even the most
charismatic of species.
Questions
1. Discuss why orangutans as an “umbrella species” are important to the overall biodiversity of the Malay Archipelago.
2. Why would the long gap between offspring have such a major effect on orangutan population numbers?
Part V – Moving Forward
The fire control efforts continued through the night and into the next afternoon. With every passing hour Ellie lost a
little more hope that Siti and her babies would be ok. They had learned the fire was set on purpose, part of a slash and
burn campaign by a non-sustainable palm plantation. The campaign had managed to destroy 1,200 acres of old growth
peat forest in a matter of hours with this fire alone. Ellie clenched her fists as they pushed through the brush, driven by
the beeping of the telemetry receiver. They came to the edge of the decimated area and were met with a gruesome site.
Siti and her infant (a little girl) hadn’t made it out of the forest. The site of her, charred beyond belief, was almost too
much for Ellie. Behind her she heard her bunkmate sob, grown men were sniffling, nobody said a word. That’s when the
realization hit her—Siti had another daughter as well. Ellie’s heart stopped. Was there a chance for one of them? That’s
when they heard it, a small noise and movement in the brush. There, buried under a dense layer of wet foliage and mud,
the tiny face of Siti’s other daughter, the twin to the now lost infant. The little survivor was freed from her little cave and
rushed to the staff veterinarian. She suffered minor burns, mild hypothermia, and shock—but all in all she was a fighter.
She was named Ubah, which is Malay for change, before being relocated to the Bohorok Orangutan Center to grow
up with her kind. Her mother and her baby sister Sayang were removed from the forest and buried under a durian tree
on Bohorok’s grounds. Their tree, and the legacy of Ubah, would serve as a reminder that change is necessary if we are
to conserve biodiversity and save the orangutan, the man of the forest.
2
Background
International non-profit organizations, companies, and governments are making attempts to mitigate the dire situation
in Malaysia and the surrounding countries of Thailand and Indonesia. The United Nations has established a collabora-
tive program on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries with the
addition of sustainable management of forests (REDD and REDD+). They are working all over the world to reduce
deforestation and build a sustainable future (UN-REDD Programme, 2017).
In 2007 the World Wildlife Fund secured commitments from Indonesia, Malaysia, and Brunei to establish protected
and sustainably-managed forest habitat called The Heart of Borneo. This refuge is protected from both illegal logging
and hunting. It may serve as a life raft for the endangered species in the area (WWF, 2016).
Finally, the Roundtable on Sustainable Palm Oil (RSPO) has set out to change the way palm oil is manufactured. They have
gathered a variety of key stakeholders in the palm oil conversation in an attempt to transform current un-sustainable palm
oil production (RSPO, 2016). While far from perfect, the RSPO is a good first step toward a more sustainable future.
Policy Changes Ahead

The previously mentioned programs have established a framework for building conservation policy. What they lack
is enforcement of said policies. According to each of the key conservation groups, the governments in the impacted
countries have been very cooperative in establishing protected areas and sustainable palm oil practices. The disconnect
between corporation and conservation appears when it comes to enforcing the established policies. To assist in enforce-
ment it is proposed that the local government in the Malay Archipelago consider the following:
• Incarceration and fees for those caught hunting and/or poaching.
• Incarceration and fees for those caught in slash and burn deforestation.
• Steep taxes and fees for companies who do not adopt sustainable practices and who are not certified through the RSPO.
• Alternative employment in the form of park rangers or similar employment to provide income as well as to
police forested areas for poaching and burning.
• Consider implementation of community based forest management, giving the people ownership and
responsibility over portions of forest with the goal of re-establishing habitable grounds.
• Mandatory labeling of palm oil in products.
• Indication of sustainable and non-sustainable sources.
Question
1. What policy changes (listed or other) would be effective in this situation?
References
Angelsenm, A. 2010. Policies for reduced deforestation and their impacts on agriculture. Proc. Natl. Acad. Sci. U.S.A.
107(46): 19639–44. https://doi.org/10.1073/pnas.0912014107.
Ancrenaz, M., F. Oram, L. Ambu, I. Lackman, E. Ahmad, H. Elahan, and E. Meijaard. 2014. Of Pongo, palms and
perceptions: a multidisciplinary assessment of Bornean orangutans Pongo pygmaeus in an oil palm context. Oryx
49(3): 465–72. https://doi.org/10.1017/S0030605313001270.
Balch, O. 2015. Indonesia’s forest fires: Everything you need to know. The Guardian. Retrieved February 08, 2016,
from http://www.theguardian.com/sustainable-business/2015/nov/11/indonesia-forest-fires-explained-haze-
palm-oil-timber-burning.
Bank, W. 1986. Malaysia: an assessment of agricultural diversification prospects. Washington, DC, World Bank. 1: 42.
Block, B. 2016. Oil palm industry takes land, promises livelihood. Retrieved March 26, 2016, from http://www.
worldwatch.org/node/607.
Bolton, D. October 26, 2015. Indonesia forest fires: a third of world’s wild orangutans at risk in raging peat fires. The
Independent. http://www.independent.co.uk/news/world/asia/indonesia-forest-fires-a-third-of-worlds-wild-orangutans-
at-risk-in-sabangau-national-park-a6709596.html.
Council, E. P. a. o. t. 2009. Promotion of the use of energy from renewable sources. 2009/28/EC, European
Parliament and of the Council.
Damodaran, H. 2015. A perennial deficit: the other oil problem. The Indian Express. http://indianexpress.com/.
EcoLogic. 2014. Slash and burn agriculture. Retrieved March 29, 2016, from http://www.ecologic.org/actions-issues/
challenges/slash-burn-agriculture/.
Edem, D.O. 2002. Palm oil: biochemical, physiological, nutritional, hematological, and toxicological aspects: a review.
Plant Foods Hum Nutr 57(3–4): 319–341.
Fan, S., J. Brzeska, M. Keyzer, and A. Halsema. 2013. From Subsistence to Profit: Transforming Smallholder Farms.
International Food Policy Research Institute. International Food Policy Research Institute.
Freedman, A. 2015. Indonesia’s peat fires have released more greenhouse gases than Germany does in an entire
year. Retrieved February 09, 2016, from http://mashable.com/2015/10/16/indonesia-peat-fires-carbon-
bomb/#jFG0MYA7U5qy.
Frontline. n.d. Timeline of the panic. Retrieved February 08, 2016, from http://www.pbs.org/wgbh/pages/frontline/
shows/crash/etc/cron.html.
Gómez, M., R. Pérez, and A. Sarmiento. 2014. African palm oil elae guineensis: alternative energy resource to biodiesel
production in Colombia and its environmental impact. Prospect 12(1): 90–8. Retrieved February 8, 2016, from
http://www.scielo.org.co/pdf/prosp/v12n1/v12n1a11.pdf.
IUCN. n.d. The IUCN red list of threatened species. Retrieved March 25, 2016, from http://www.iucnredlist.org/.
Kutas, G., C. Lindberg and R. Steenblik 2007. Biofuels: at what cost? Government support for ethanol and biodiesel
in the European Union. Geneva, Switzerland, International Institute for Sustainable Development (IISD). ISBN
978-1-894784-02-3.
Lai, Y.W, and T. S. Ee. 1988. Towards effective planning in Malaysia: some strategic issues. In: Development Planning
in Mixed Economies. Urrutia, M. and S. Yukawa, ed. The United Nations University. ISBN: 92-808-0637-8.
Malaysian Palm Oil Board (MPOB). 2012. Oil palm planted area. http://bepi.mpob.gov.my/.
Malaysian Palm Oil Board (MPOB). 2015. Export of palm oil by destination. E.I.D. Division. http://bepi.mpob.gov.my/.
Mekhilef, S., S. Siga, and R. Saidur. 2011. A review on palm oil biodiesel as a soure of renewable fuel. Renewable and
Sustainable Energy Reviews 15(4): 1937–49. Retrieved February 8, 2016, from http://www.sciencedirect.com/
science/article/pii/S1364032110004478.
Merriam-Webster’s Everyday Language Reference Set. 2010. Springfield, MA: Merriam-Webster.
Mukherjee, I., and B.K. Sovacool. 2014. Palm oil-based biofuels and sustainability in southeast Asia: a review
of Indonesia, Malaysia, and Thailand. Renewable and Sustainable Energy Reviews 37: 1–12. https://doi.
org/10.1016/j.rser.2014.05.001.
Nantha, H.S., and C. Tisdell. 2008. The orangutan–oil palm conflict: economic constraints and opportunities for
conservation. Biodiversity and Conservation Biodivers Conserv 18(2): 487–502.
National Wildlife Federation. 2016. What is biodiversity? Retrieved March 25, 2016, from http://www.nwf.org/
Wildlife/Wildlife-fConservation/Biodiversity.aspx.
Neilson, W.A. 1954. Webster’s New International Dictionary of the English language: Utilizing All the Experience and
Resources of More than One Hundred Years of Merrium-Webster Dictionaries. Springfield, MA: G. & C. Merriam.
Oakford, S. July 4, 2014. Indonesia is killing the planet for palm oil. Vice News. https://news.vice.com/article/
indonesia-is-killing-the-planet-for-palm-oil.
Orangutan Conservancy. 2016. Threats to Orangutans. Retrieved February 08, 2016, from http://www.orangutan.
com/threats-to-orangutans.
Obahiagbon, F. 2012. A review: aspects of African oil palm (Elaeis guineesis jacq) and the implication of its
bioactives  in human health. American Journal of Biochemistry and Molecular Biology 2(3): 106–119. DOI:
10.3923/ajbmb.2012.106.119.
Odia, O. J., S. Ofori and O. Maduka. 2015. Palm oil and the heart: a review. World Journal of Cardiology 7(3):
144–149.
Olaniyi, A.O., A.M. Abdullah, M.F. Ramli and A.M. Sood. 2013. Agricultural land use in Malaysia: an historical
overview and implications for food security. Bulgarian Journal of Agricultural Science 19(1): 60–9.
Page, S.E., F. Siegert, J.O. Rieley, H.V. Boehm, A. Jaya, and S. Limin. 2002. The amount of carbon released from peat
and forest fires in Indonesia during 1997. Nature 420(6911): 61–5.
Power, M., and L.S. McCarty. 1998. Peer reviewed: a comparative analysis of environmental risk assessment/risk
management frameworks. Environmental Science and Technology 32(9): 224A–231A. doi:10.1021/es983521j.
Rainforest Action Network. 2013. Amazing! Orangutan asks girl for help in sign language. [Video]. Running time:
2:21 min. Retrieved February 08, 2016, from https://youtu.be/G32YehcdUAw.
Redmond, I., and T. Juniper. 2005. The oil for ape scandal. Retrieved February 8, 2016, from https://www.foe.co.uk/
sites/default/files/downloads/oil_for_ape_full.pdf.
Roser, M., and E. Ortiz-Ospina. 2017. Global extreme poverty. Retrieved from https://ourworldindata.org/extreme-poverty.
Roundtable of Sustainable Palm Oil (RSPO). 2016. About us. Retrieved March 29, 2016, from http://www.rspo.org/about.
Sorda, G., M. Banse and C. Kemfert. 2010. An overview of biofuel policies across the world. Energy Policy 38(11):
6977–88.
Sundram, K. 2016. Palm oil: nutrition and health benefits, revisited. from http://mpoc.org.my/Palm_Oil-;_Nutrition_
and_Health_Benefits,_Revisited.aspx.
Tata, H.L., M.V. Noordwijk, D. Ruysschaert, R. Mulia, S. Rahayu, E. Mulyoutami, . . . and S. Dewi. 2014. Will
funding to reduce emissions from deforestation and (forest) degradation (REDD ) stop conversion of peat
swamps to oil palm in orangutan habitat in Tripa in Aceh, Indonesia? Mitigation and Adaptation Strategies for
Global Change. 19(6): 693–713. https://doi.org/10.1007/s11027-013-9524-5.
Thomaz, E.L., V. Antoneli, and S. H. Doerr. 2014. Effects of fire on the physicochemical properties of soil in slash-
and-burn agriculture. Catena 122: 209–15. doi:10.1016/j.catena.2014.06.016.
Tisdell, C., and H.S. Nantha. 2011. Comparative costs and conservation of wild species in situ, e.g. orangutans.
Ecological Economics 70(12): 2429–36. doi:10.1016/j.ecolecon.2011.07.026.
Union of Concerned Scientists. n.d. Palm oil. http://www.ucsusa.org/global_warming/solutions/stop-deforestation/
palm-oil-and-forests.html.
United States Department of Agriculture (USDA). 2011. Agricultural statistics. https://www.nass.usda.gov/index.php.

UN-REDD Programme. 2017. About REDD+. [Webpage]. http://www.unredd.net/about/what-is-redd-plus.html.
Urrutia, M. and S. Yukawa, ed. 1988. Development Planning in Mixed Economies. Hong Kong: The United Nations
University. ISBN: 92-808-0637-8.
Vermeulen, S. and N. Goad. 2006. Towards better practice in smallholder palm oil production. Natural Resource Issues
Series No. 5. International Institute for Environment and Development. London, UK.
World Bank. 2015. Indonesia’s fire and haze crisis. Retrieved March 28, 2016, from http://www.worldbank.org/en/
news/feature/2015/12/01/indonesias-fire-and-haze-crisis.
World Health Organization (WHO). 2017. The top 10 causes of death. http://www.who.int/mediacentre/factsheets/
fs310/en/.
World Wildlife Fund (WWF). 2016. Orangutans. Retrieved February 8, 2016, from http://wwf.panda.org/what_we_
do/endangered_species/great_apes/orangutans/.
Yahya, T.M.B.T. 2001. Crop diversification in Malaysia. FAO. Bangkok, Thailand, Regional Office for Asia and the
Pacific.
2
Case copyright held by the National Center for Case Study Teaching in Science, University at Buffalo, State University of New York. Originally
published May 7, 2018. Please see our usage guidelines, which outline our policy concerning permissible reproduction of this work.

Palm Oil

Uploaded by

Copyright:

Available Formats

Palm Oil

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Palm Oil

Uploaded by

Copyright:

Available Formats

NATIONAL CENTER FOR CASE STUDY TEACHING IN SCIENCE “What we are doing to the forests of the

world is but a mirror reflection of

The Demise of the and to one another.”

Forest People: The Natural History of an

Malaysian Palm Oil and the

Part I – Economic History of Malaysian Palm Oil

plantations surrounding the village were destroying the forests

Agricultural Development Era

2. Why has palm oil production increased?

Part II – Corporate Stakeholders and Smallholders

2. What are the financial aspects of palm oil production?

Part III – Palm Oil and the Global Market

Poverty and Food Security

Health and Nutrition

Part IV – The Environment and Threats to the Orangutans

The Plight of the Orangutan

Policy Changes Ahead

United States Department of Agriculture (USDA). 2011. Agricultural statistics. https://www.nass.usda.gov/index.php.

You might also like