Jason Motlagh/FOR THE WASHINGTON POST - Long a preferred cooking ingredient in developing countries, palm oil is now in greater demand in Western markets because of its low price and long shelf life.
LAHAD DATU, MALAYSIA — Twenty-five years ago, Lahad Datu was just another sleepy port town on the fringe of Malaysian Borneo, frequented by traders, sea gypsies and the occasional pirate gang.
These days, big money is flowing into banks and construction projects that have multiplied in the city center, where a gaudy silver statue honors the cash crop that put the former backwater on the map: palm oil.
A global appetite for palm oil
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Long a preferred cooking ingredient in developing countries, palm oil is now in greater demand in Western markets because of its low price and long shelf life. Derived from the fruit of oil palm trees, it can be found in more than half of all the products sold in U.S. supermarkets, including cookies and cosmetics. And its use is increasing as the commercial food industry phases out trans fatsto meet government-mandated labeling requirements.
The huge global appetite is yielding billions in revenue for Indonesia and Malaysia, the world’s first- and second-largest producers of palm oil. But environmental and human rights activists warn that the boom is doing irreparable damage to rare biodiversity and accelerating the effects of global warming, with no concern for long-term social costs.
They add that indigenous people are being pushed off their ancestral land to make way for plantations staffed by tens of thousands of migrant workers, who are often denied health care and education services. Many families that have labored for decades still do not have the legal documents that would grant them and their children basic rights.
The laborers and their children “are invisible; they have no future. They just work and work and work,” said Alison Neri, the director of a social welfare organization that assists Indonesian migrants in eastern Malaysia.
The toll is most acutely felt in Borneo, the Southeast Asian island shared by the two countries that are home to one of the oldest rain forests on Earth and mankind’s closest relative, the orangutan.
According to a new study, oil palm plantations over the past two decades have cleared about 6,200 square miles of primary and logged forested land. Palm oil deforestation and hunting have combined to reduce Bornean orangutan populations to 54,000, half the total of the 1980s, according to environmental groups. At this rate, some predict, the iconic animal could be extinct within years.
Borneo started losing its rain-forest cover in the 1960s when the Malaysian government pushed the expansion of oil palms to complement rubber tree growth. Migrant workers traveled in droves from Indonesia and the Philippines to work on the plantations being carved out of the backcountry.
Palm oil has since evolved into Malaysia’s most lucrative crop. In 2011, the export of palm oil and palm-based products netted $27 billion — a five-fold increase over the past decade — as a result of brisk trade with China, Pakistan, the European Union, India and the United States, which imported record levels that year.
A changing landscape
The transformation of Lahad Datu is emblematic of the boom going on in Malaysia’s Sabah province, which accounts for about a quarter of Borneo’s land area. The local population has doubled over the past 15 years. American fast-food chains and other new businesses have arrived. And real estate prices are soaring in what has been dubbed “Palm City.”
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