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Research Report

The local impacts of oil palm expansion in Malaysia: An assessment based on a case study in Sabah State

Awang Ali Bema Dayang Norwana
Rejani Kunjappan
Melissa Chin
George Schoneveld
Lesley Potter
Rubeta Andriani
Copyright Date: Jan. 1, 2011
Pages: 26
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Table of Contents

  1. (pp. 1-1)

    This study is part of a broader research process assessing the local economic, social and environmental impacts from feedstock expansion for the growing biofuel sector (see German et al. 2011). Nonetheless, in the Malaysian context, biofuel production volumes are negligible despite government interest in promoting sector expansion. Since Malaysia is the second largest palm oil producer in the world, palm oil is slated to become the primary feedstock for biofuel production in the country. Since palm oil consistently outperforms all other substitute vegetable oils on price, it is also becoming an important feedstock globally. While a rapidly growing global biofuel...

  2. (pp. 1-3)

    The production of palm oil has long been associated with reports of tropical deforestation, biodiversity loss, water pollution, and violation of customary land rights (Anon. 2004, 2009; Koh and Wilcove 2008; Then 2009). In the past, Malaysia was among 14 countries with annual deforestation rates in excess of 250 000 ha per year (Wood 1990). Most of this is attributable to the country’s large timber industry and the growing oil palm plantation sector. An analysis by Koh and Wilcove (2008) suggests that during the period 1990–2005, close to 60% of the oil palm expansion in Malaysia was at the...

  3. (pp. 3-5)

    The case study was conducted in the Beluran District of the Sandakan Division in Sabah (Figure 1). In 1980, around the time that oil palm was first introduced as an industrial crop in the area, the district had a population of 30 066 (Department of Statistics Malaysia 2010). By 2008, the population had more than tripled to 96 900 (Beluran District Office 2010). The main ethnic groups in Beluran District are the Kadazandusun, Sungai and Tidong. According to figures from the Department of Agriculture, the area planted with oil palm in the district amounted to 217 949 ha in 2007,...

  4. (pp. 6-7)

    The methodology used for data collection consisted of three basic components: (i) key-informant interviews⁴ with management staff of PPB OP Berhad, relevant local authorities and village heads; (ii) household surveys using structured questionnaires with respondents from identified stakeholder groups, to gather information on impacts, which are largely based on local perceptions; (iii) small focus-group discussions (FGDs) with selected respondents for each stakeholder group; and (iv) remote-sensing analysis to understand the land-cover changes in the concession area. Household surveys were conducted in four villages neighbouring the estates and falling within Mukim⁸ Sapi, namely Toniting, Bintang Mas, Ulu Sapi and Lidong. The...

  5. (pp. 7-14)

    Before the land where the Sapi estates are located was converted to oil palm, it consisted predominantly of forest cover. Local stakeholders suggested that much of the area has been logged as a result of commercial logging pressures since the 1950s, yet those impacts are not possible to detect in the satellite imagery. In 1970, most of the area was still covered by forests, with only small sections converted to oil palm. McMorrow and Mustapa (2001) indicate that the decline of forest cover in Sabah occurred mostly in the 1970s and early 1980s, when forests began to be converted to...

  6. (pp. 14-14)

    Oil palm development has brought significant impacts, according to respondents, to different stakeholder groups. The impacts felt by the respondents depend on the location of their villages and the extent to which they are dependent on natural resources. Generally, oil palm has brought positive impacts, such as increased income, secure employment, and improved access to social services. However, involvement in oil palm has also caused many local communities to move away from traditional practices.

    The independent growers in particular have been willing to forgo their traditional way of life, including dependence on ecosystem services such as river water quality and...

  7. (pp. 14-15)

    This paper assesses the social, economic and environmental impacts arising from oil palm cultivation in Malaysia in order to draw lessons for an incipient biofuel sector. Key-informant interviews, household surveys and focus-group discussions with various local stakeholders point to largely positive impacts from oil palm on local livelihoods, particularly independent oil palm growers and migrant employees. Despite this perceived positive outlook, adverse impacts on the environment, such as deforestation and river pollution, were shown to be a concern among those who continue to rely on traditional land-use activities or depend on the river for household uses – illustrating high variability...