Biofuels, oil palm and agribusiness in Southeast Asia – planning for sustainability?

This SEI briefing synthesizes research from 2011-2014 on the expansion of the oil palm and biofuels industry in Thailand, Cambodia, Indonesia, and the Philippines. It finds that while governments promote these industries for energy security and poverty reduction, the actual benefits to local communities are often skewed or unsubstantiated. Key issues identified include unclear land tenure leading to disputes, the vulnerability of small-scale producers who struggle with certification and market access, and systemic failures in the implementation of environmental laws and dispute resolution mechanisms. The report argues that investments often precede inclusive development planning and recommends prioritizing 'upstream' social and economic planning to ensure sustainable outcomes.

• Governments in Southeast Asia are promoting the biofuel industry to improve domestic energy security, create jobs, reduce poverty, and stimulate rural development. This is supported by national strategic plans, such as Thailand’s Alternative Energy Development Plan (AEDP 2008–2022) and the Philippine Development Plan 2011–2016, as well as mandatory fuel blending targets and subsidy schemes in Indonesia, the Philippines, and Thailand.
• Research indicates that the claimed benefits of biofuel feedstock projects for poverty reduction are often unsubstantiated. In the studied cases, there were no attempts to assess the impact of transitioning from subsistence farming or local market crop production to plantation wage labour. In Palawan (Philippines) and Central Kalimantan (Indonesia), evidence showed labour rights infringements and disregard for minimum wage rates, with some workers facing threats or job loss after complaining.
• Land tenure disputes are common because biofuel projects often claim to use “vacant lands” that are actually in use by communities with customary rights. This issue was observed in Indonesia, the Philippines, and Cambodia. In Cambodia, there is a significant discrepancy in land data: the government claimed over a million hectares of available arable land in 2013, while the Cambodian Centre for Human Rights reported only 300,000 hectares of unclaimed arable land remained in 2011.
• Small-scale producers face significant vulnerabilities. In Indonesia, farmers report a lack of extension support services and a lack of commitment from companies regarding agreed quantities and price levels. In Thailand, where smallholders account for approximately 85% of production, only 2.3% of palm oil production was certified as of May 2015, as the high transaction costs and documentation requirements of schemes like the Roundtable for Sustainable Palm Oil (RSPO) are difficult for smallholders to meet.
• Legal and environmental frameworks are poorly implemented. In Indonesia, provincial and district executives hold the mandate for implementing regulations, but environment and river basin offices lack the tools to penalize companies for breaking environmental laws, possessing only the mandate to monitor and report to the central ministry. Similarly, in the Philippines, laws were rarely enforced despite documented illegal expansion of oil palm into forestlands and indigenous ancestral lands.
• There is a critical lack of effective dispute resolution mechanisms for local communities. In Indonesia, while palm oil plantations are a major source of land conflict—with 570 conflicts reported in 2008 alone—the provincial environment agency in Central Kalimantan reported it could investigate less than 1% of complaints.

APA

Larsen, R. K., Atteridge, A., Kemp-Benedict, E., Nguyen, H., & Osbeck, M. (2015). Biofuels, oil palm and agribusiness in Southeast Asia – planning for sustainability? Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-DB-2015-biofuels-southeast-asia.pdf

Chicago

Larsen, Rasmus Kløcker, Aaron Atteridge, Eric Kemp-Benedict, Ha Nguyen, and Maria Osbeck. Biofuels, oil palm and agribusiness in Southeast Asia – planning for sustainability? Stockholm Environment Institute, 2015. https://www.sei.org/mediamanager/documents/Publications/SEI-DB-2015-biofuels-southeast-asia.pdf.

Wikipedia

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BibTeX

@techreport{larsen2015biofuels, author = {Larsen, Rasmus Kløcker and Atteridge, Aaron and Kemp-Benedict, Eric and Nguyen, Ha and Osbeck, Maria}, title = {{Biofuels, oil palm and agribusiness in Southeast Asia – planning for sustainability?}}, institution = {Stockholm Environment Institute}, year = {2015}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-DB-2015-biofuels-southeast-asia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }