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Peatlands and Palm Oil Certification: Whither an Exit Strategy?

Author: Dr Helena Varkkey, University of Malaya (helenav@um.edu.my)


The use of peatlands for oil palm cultivation has been controversial, for several reasons. Firstly, the normally submerged peatlands prevent decomposition of organic material below the waterline. This makes peatlands excellent carbon sinks, locking away tonnes of carbon and helping to slow down climate change. Clearance and drainage of peat in preparation for planting unlocks and releases this carbon into the atmosphere.


Secondly, when peat is drained, the organic matter dries up quickly and becomes very combustible. Any spark, either accidental (from cigarette butts or lightning) or intentional (as a cheap and easy way to clear land), can start fires that are notoriously hard to put out. These fires spread quickly underground and the smoke that is released is thick, sooty, and contains particulate matter that is highly dangerous to human health. Especially during the dry season, smoke can travel across national boundaries in the form of transboundary haze.


Because of this, planting oil palm on peatlands is nowadays generally considered unsustainable. However, legacy issues in both Indonesia and Malaysia (pre-approved permits and licenses; plantations that have been already operating on peat for generations) has complicated the governance of plantations on peat.


The three main sustainable palm oil certification systems, the Roundtable for Sustainable Palm Oil (RSPO), the Indonesian Sustainable Palm Oil (ISPO) and the Malaysian Sustainable Palm Oil (MSPO) all approach the issue of oil palm plantations on peat differently. This article compares and contrasts these differences, while considering how this will affect peatland governance and sector longevity in the two major oil palm growing countries in the world.



Heavy machinery on peatlands in Sarawak


RSPO, ISPO and MSPO on Peat

RSPO is a voluntary certification system. Among the three, RSPO has the strictest approach to peatland use. Its current Principles and Criteria 2013 has stipulated a firm “no new planting on peat” rule.

However, on peatlands that have already been converted to plantations, RSPO requires the implementation of its Best Management Practises (BMP) for peatland management. Specifically, for areas with extended dry seasons, the BMP recommends to raise the water levels as high as possible at the end of the wet season, so that in subsequent dry periods the level can be maintained at 40-50cm in the field. High groundwater tables are important to reduce fire-risk in peatlands.


Both Indonesia’s ISPO and Malaysia’s MSPO are compulsory and are based on the laws of its countries. While the ISPO started out with a fairly lenient outlook to peatland use, recent legal developments have indirectly strengthened peatland management under the ISPO.


Just this month, President Jokowi made permanent a moratorium on forest clearance on peatland areas. This means that, similar to RSPO regulations, there should no longer be any new planting on peat in Indonesia. Plantations already on peat must be managed “by observing characteristics of peat so as to not cause damage to environmental functions”. This is clarified under the Governmental Regulation No. 57/2016, which requires managed peatlands to maintain a 40cm groundwater table all year round.


As land use is governed under state law in Malaysia, individual states are permitted to gazette peatlands for agricultural use. However, MSPO recommends that plantings on such fragile lands like peatlands such be minimised. All plantations on peat should be as per the Malaysian Palm Oil Board’s (MPOB) guidelines for best practises on peatlands. Current guidelines state that groundwater tables in the field should be maintained between 30cm and 50cm.


Managing Peat or Managing an Exit?

While RSPO and ISPO regulations will limit most new plantings on peat, the issue of the management of converted plantation continue to persist. As the previous section details, all three certification systems have their own different BMPs for peatlands, which begs the question if there is in fact such thing as a best management practise on peatlands.


Indeed, the jury is still out on this, with many peatland scientists insisting that drained peatlands cannot be managed sustainably. Even “well-managed” drained peatlands are prone to repeated fires, and will continue to release carbon into the atmosphere.


As part of Indonesia’s Peatland Restoration Agency’s efforts, a land swap policy exists for pulpwood and logging companies whose concessions are more than 40% protected peat ecosystems. However, besides the problem that land that has been identified for these swaps include natural forests, this policy also does not extend to oil palm plantations.


Oil palm plantation companies are wont to voluntarily divest from peatlands because of the high costs already invested in these areas. The cost of land clearing, especially using heavy machinery (and thus without fire), is especially high. Furthermore, the long life-cycle of the oil palm, that can be productive for more than 20 years, will discourage any early exists.


Hope Beyond Certification?

Despite the leeway provided by these certification systems, worldwide consumer pressure has encouraged major palm oil buyers to commit to “No Deforestation, No Peat, No Exploitation” (NDPE). This private initiative was seen as a market-led effort to remove palm oil that has been grown on peat from the global supply chain.


When first announced, it was foreseen that companies that continue to plant on peat would end up with “stranded assets”; plantations that produce oil palm that are not marketable. However, traceability limitations have resulted in many of these brands breaking their commitments, enabling palm oil produced on peat to continue “leaking” into the market.


With the failure of such private voluntary mechanisms, the focus returns to certification systems. Thus far, much of the BMPs under these certification systems have been largely focused on groundwater table management for fire prevention.


Subsidence and Sector Sustainability

However, another major problem with oil palm plantations on peat is subsidence. As dried peat topsoil is gradually washed away, the ground level drops by up to several centimetres each year. To add to this, climate change is already causing accelerated sea level rise in Southeast Asia. Hence, plantations on coastal peatlands will eventually subside down to the sea level and beyond, resulting in flooding. This means that, barring prohibitively expensive diking strategies, almost all plantations on peat will eventually become flooded and unusable.


On top of the short term-focus of fire prevention, these certification systems should thus also move towards a longer-term strategy focusing on ensuring the longevity of the sector itself. Hence, what is really needed is a peat exit strategy and an increased focus on intensification. This will help ensure the long-term economic sustainability of the oil palm sector in Indonesia and Malaysia, while at the same time reducing the negative impacts of this sector on the environment.

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