The Effects of Growing Oil Palm on Biodiversity : A Study Case of Indonesia

Written by: Annisa Rahmawati -IMRE 2010 (53958-1)

ABSTRACT The rising demand, production and use of palm oil for daily consumption, energy conversion for biodiesel and biofuel of the global world has resulted in a fierce public debate. The production of palm oil in the most important producer countries, Indonesia and Malaysia, has come hand in hand with many environmental, ecological and social issues. Palm oil production of the largest producer, Indonesia, takes place in areas where large scale deforestation and losses in biodiversity are observed, where CO2 emission through losses of organic soil matter and original vegetation are high, and where forest and peatland fires are common. Oil palm plantation has been the direct cause of a host of ecological problems including deforestation, endangered wildlife species, habitat destruction and fragmentation, soil, air, and water pollution and toxic chemical contamination, and also creating social conflict and displacement of local communities. This paper will describe how the oil palm plantation can significantly leads to biodiversity loss. Based on the current research, the writer will examine function of biodiversity and find out possible solution for mitigating impacts of expansion of oil palm plantation to the biodiversity.

There are four main parts to be discussed in this paper. Explanation on the background and objectives will be presented in the first part of this writing. Second part will examine about the economic value of oil palm commodity in Indonesia, the demand and supply of this commodity and how Indonesian government try to expand of oil palm plantation to address the rising demand of palm oil will be discussed in the third part of this paper. In the fourth part, the writer will examine the oil palm plantation in the context of biodiversity, how rapid deforestation, the changing of land use and Green House Gas (GHG) emission caused by oil palm plantation. In this part also assess the habitat loss and habitat degradation, species richness and competition to underline the interrelation in ecosystem. In the last part will discuss about possible solution to mitigate negative impact of oil palm plantation expansion with different level of approach.

Table of Content I. Introduction..3 I.1. Background3 I.2. Objectives and Methodology.3 II. Oil Palm Commodity in Indonesia..3 II.1. Oil Palm and Palm Oil.3 II.2. Demand and Supply.4 II.2. Expansion of Oil Palm Plantation6 III. Ecological Impacts: Oil Palm Plantation versus Biodiversity..7 III.1. Rapid Deforestation, Land Use Change, GHG emission8 III.2. Habitat loss and Degradation ..10 III.3. Species Richness and Competition..12 IV. Mitigating impacts..14 IV.1. Preventing Oil Palm-driven Deforestation..14 IV.2. Plantation Management............................................................................................15 V. Conclusion...19 Reference..20

I. Introduction I.1. Background One of the most rapidly increasing crops in the world is Oil palm. The rise of high demand of vegetable oil and biofuels global market has encouraged the expansion of oil palm plantation in the Southeast Asia, specially Indonesia and Malaysia as two biggest country exporter of oil palm. Growing oil palm for Indonesia, in one hand is a chance for increasing economic growth currently and the next future, but in the other hand, oil palm plantations have a huge negative environmental impact on tropical rain forest. The expansion of oil palm plantation leads to huge contribution to tropical deforestation and review its biodiversity value. Oil palm has replaced large areas of tropical forest in Southeast Asia. It also supports much fewer species than forests do and often also fewer than other tree crops. Further negative impacts include habitat fragmentation and pollution, including greenhouse gas emissions. I.2. Objectives and Methodology This paper is written to examine the importance of biodiversity and how it supports ecosystem services, to understand the effect of oil palm plantation to the biodiversity loss in Indonesia and to mitigate impacts of oil palm plantation on biodiversity loss. Methodology used in this paper is literature study in the university library and internet. II. Oil Palm Commodity in Indonesia II.1. Oil Palm and Palm Oil Oil Palm Biology and Productivity Oil palm (Elaeis guineensis) is native to West Africa, where local populations have traditionally used it to make foodstuffs, medicines, woven material and wine. Oil palm was first introduced in Indonesia, in Java 1848 as ornamental plant. It is a perennial plant (25 years) which has native habitat in tropical rainforest with 17802280 mm annual rainfall and a temperature range of 24 30C. The oil palm thrives in disturbed forest and near rivers; it does not grow well under closed canopies (Corley and Tinker 2003). It is also tolerant of a wide range of soil types, as long as it is well watered (NewCROP, 1996). Typically, oil palm plantations are planted at a 9 m by 7.5 m spacing and the resulting 148 palms per ha produce one new frond every 3 weeks; each new leaf adds 4.5 cm to the trunk height (80 cm per year, 20 m in 25 years) and goes on to form one flower bunch (either male or female); typically, under well managed conditions, 1015 bunches can be harvested per palm per year, weighing 1520 kg each; total yields are thus 1530 tons of fresh fruit bunches per hectare per year. The sex determination of flower bunches depends on the level of resources in the plant and levels of water and nutrient conditions. Under good conditions, the majority of bunches are female and can lead to high fruit yields. Drought stress increases the proportion of male flowers. Oil palm has the highest yield of any oil seed crop, averaging 34 tons of mesocarp oil per ha per year in the major palm oil producing countries (Wahid, 2005).

Oil palm needs humid equatorial conditions to thrive, and conditions in Southeast Asia are ideal. Seasonal droughts at higher tropical latitudes greatly reduce yields. Palms mature rapidly and fruit can be harvested as soon as 23 years after planting, although trees aged 915 years are the most productive After 2530 years, trees become too tall to harvest and A typical mature palm plantation in Indonesia now yields 24 tons per ha per year (Basiron, 2007). Water-stressed palms produce fewer female flowers and abort (drop) unripe fruit. Palm productivity benefits from direct sunshine: the lower incidence of cloud cover over much of Southeast Asia is thought to be one reason why oil palm yields are higher there than in West Africa (Dufrene et al., 1990). Palm Oil Industry Oil (triacylglycerols) can be extracted from both the fruit and the seed or nut, crude palm oil (CPO) from the outer mesocarp and palm-kernel oil from the endosperm. Most crude palm oil is used in foods. In contrast, most palm-kernel oil is used in various non-edible products, such as detergents, cosmetics, plastics, surfactants, herbicides, as well as a broad range of other industrial and agricultural chemicals (Wahid et al., 2005). The fresh fruit bunches (FFB) are 52 per cent dry weight and have an extractable oil content of 15- 25 per cent, depending on ripeness at harvesting time. Processing the fruit bunches begins with separating the stalks and empty fruit bunches (EFB, about 8 per cent of FFB dry weight) and then pressing the resulting mass, leading to press liquor that still needs to be separated into Crude Palm Oil (CPO) and Palm Oil Mill Effluent (POME). The press cake yields fiber and shell (dry weight equivalent to 8 and 5.5 per cent of FFB, respectively) and kernels (dry weight about 5 per cent of FFB, of which 45 per cent is kernel oil). Empty fruit bunches can be used as mulch and organic fertilizer, POME can be used as cattle feed or liquid fertilizer, and it contains enough methane to be a viable source of biogas. The fiber and shell can be used as fuel, source of pulp and paper or organic fertilizer (Weng,1999) II.2. Demand and Supply Palm oil is a huge agricultural commodity. By 2012, palm oil is forecasted to be the worlds most produced, consumed, and internationally traded edible oil. Global production, consumption, and trade in palm oil have soared since the 1970s. In 2002, palm oil and palm kernel oil accounted for almost 50 percent of total global exports of oils and fats. Between 1997 and 2001 alone, global palm oil production grew by 31 percent, consumption by 34 percent, and global exports by 43 percent (from 26.6 billion to 38.7 billion pounds). The worlds biggest importers of palm oil over this period (19972001) were India, China, and Pakistan, followed by the Netherlands, the United Kingdom, Egypt, and Germany. U.S. palm oil imports were a much smaller share of the global market during those years. Compared to other major oil crops, palm oil has lower production costs and produces more oil from less land. Palm oil yields 4000-5000 kg/ha as the most yield crops followed by rapeseed for 1000 kg/ha.

This fact, make oil palm to be a very demanding crop in the future as seen in the table below: Table 1. Oil Production of Palm and Other Major Crops

However, in 2001, the United States was the second largest importer of palm kernel oil. (U.S. palm oil imports could increase sharply over the next few years if food processors use it to replace a significant portion of the partially hydrogenated vegetable oil now used.) Malaysia and Indonesia dominate global production and export of palm oil. In 2001, those two countries accounted for 83 percent (42.9 billion pounds) of palm oil production and 89 percent (34.5 billion pounds) of global exports. The remainder of the worlds palm oil is produced in other humid tropical countries, such as Cameroon, Nigeria, Colombia, and Papua New Guinea, frequently by companies with large Malaysian investment or ownership. (Oil World, 2008) Figure1. World Oil Palm Demand and Production

Indonesia and Malaysia are two biggest exporter of oil palm in the world. Based on Oil World Report in May 2008, Indonesia roles 44 percent export of palm oil, while Malaysia 41percent and other countries together contribute 15 percent. As seen in table that there is a significant increase in average at 1.47 of yearly palm oil production in Indonesia. Planted area has been increasing at a pace of 300,000 hectares a year for over a decade, and the population of immature trees is very large (approximately 1.75 million hectares or 23 percent of total area). The fact that a prolonged surge of plantings began in the past 15 years means that the Indonesian oil palm crop is predominantly young, with most trees yet to come into their most productive years (10-20 years old). Based on official planting statistics from the Indonesian
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government it is estimated that 55 percent of current national palm acreage is in pre-peak yielding growth stages Figure 2. Palm Oil Age Profile and Yields in Indonesia

. II.2. Expansion of Oil Palm Plantation Indonesian forests constitute one of the world's mega centers of biological diversity. However, these forests, 10 percent of the world's remaining tropical forests, second largest after Brazil are being increasingly degraded, leaving ever fewer natural resources and causing significant ecological damage. The rate of deforestation is at alarming level reaching up to 3.8 million hectares per year, (Planning Agency of the Ministry of Forestry, 2003). Many factors contribute to the increase in the rate of deforestation. This includes illegal and destructive logging, forest conversion, forest and land fires. Forest conversion can be defined as a continuous process of forest degradation, leading from natural forests over one or several steps to the replacement of forests by other forms of land use, such as plantations (including pulp woods and oil palm), agriculture, pasture, mining, infrastructure and settlements. One significant factor of forest conversion that has been constantly under scrutinized is the conversion of forests to oil palm plantations. Oil palm expansion could in principle contribute to deforestation in four often indistinguishable ways: (i) as the primary motive for clearance of intact forests; (ii) by replacing forests previously degraded by logging or fire; (iii) as part of a combined economic enterprise, such as with timber, plywood or paper pulp profits used to offset the costs of plantation establishment; or (iv) indirectly, through generating improved road access to previously inaccessible forest or displacing other crops into forests. Land might also be deforested initially for other reasons and then subsequently be planted with oil palm. In such cases, oil palm could easily, but wrongly, be identified as a permission to clear millions of hectares of forest under the pretext of plantation establishment, without later planting them, especially in Kalimantan. Oil palm plantations often replace forests previously degraded by fire and logging, and illegal oil palm development has been reported inside protected areas.

Figure 4. Core palm Oil Expansion Areas in Indonesia

In Indonesia, oil palm plantations have been intensively developed since 1980s. In 1991, the total area of oil palm plantations was only 1.1 million ha. The figure increased to 4.7 million ha in 2001 with many predicts that to date the total area of oil palm has reached over 5.2 million ha (IPOC, 2004). This expansion is paralleled with the increase in CPO (crude palm oil) production from 2.658 million tons in 1991 to 5.247 million tons in 2003. According to the Central Bureau of Statistics (BPS), export of CPO and other oils in 1998 was 1.478 million tons and increased to 6.332 million tons in 2002 with the total CPO production reached 9.4 million tons (IPOC, 2003). III. Ecological Impact: Oil Palm Plantation versus Biodiversity Biodiversity is a fundamental characteristic of life on Earth and encompasses the whole range of variation in living organisms (Wilson, 1993). It can be defined in terms of genetic variation, species variation or ecosystem variation. Kettunen and ten Brink (2006) identify that habitat change and destruction as being the most direct reasons for biodiversity loss. Other significant factors include over-exploitation of resources, pollution and changes in ecosystem composition due to colonization by non-native plant and animal species. These will also influence to the provisioning, regulating, supporting and cultural services that underpin our supplies of food, clean water and renewable resources, and which maintain hydrological cycles and, ultimately, our climate. High levels of biodiversity are better than low levels. The presence of particular key species and functionally of ecosystem may be more important than the absolute numbers of species. Generally, it is the case that a high level of biodiversity is likely to coincide with overall stability of ecosystem. The more species there are in an ecosystem, the more likely it is that species will be ecologically similar and able to provide the same functions whenever there is exogenous change to the ecosystem.

III.1. GHG Emission and Land Use Change Rapid Deforestation Forest is very important to provide ecosystem services. They moderate air temperatures and maintain atmospheric humidity. They absorb atmospheric carbon and replace oxygen in our air. Forests are key to maintaining soil and water resources. They absorb excessive rainfall, and they regulate stream flows by gradually releasing water into streams and rivers, thus reducing flooding and landslides downstream. Trees conserve soil moisture by shading the soil, and their roots reduce soil compaction and help infiltration of water and nutrients. From 1982 to 1999, about 16,000 square miles of Indonesian tropical rainforest was converted to oil palm, timber, coconut, and all other forms of plantation. Of that total, it is study estimated that oil palm plantations were responsible for at least 44 percent about 7,000 square miles of rainforest loss. After Indonesias economy recovers from economic crisis in 1999, oil palm expansion is expected to continue, primarily within the three provinces of Riau, Jambi and South Sumatra. While the Indonesian government is expected to offer incentives to companies wishing to establish oil palm plantations in Eastern Indonesia (primarily Kalimantan and Irian Jaya), oil palm investors will prefer to establish estates in Sumatra because the island has the best climate and soil conditions in the country for cultivating oil palm. Sumatra also has the necessary infrastructure in place for palm oil processing (palm oil fruits need to be processed within 48hrs). Future expansion of oil palm in Sumatra poses a significant threat to remaining forest resources on the island. This is because the Central Government has already decided to allow the release of 843,052 ha of forest land to plantations in the near future, despite the existence of considerable conversion forest deficits and degraded areas in much of Sumatra. Around 70 percent of this forest land will be converted to oil palm. Most of this forest land lies within the provinces of Riau (417,503 ha) and Lampung (74,779 ha) (Casson, 2000). Applications for the release of another 4.4 million ha of forest land to plantation companies are still being considered by the Central government. However, some district governments, tired of waiting for central government approval, have already allocated some of this forest land to plantation companies under the auspices of Indonesias new decentralization laws. The release of large areas of forest land in Sumatra will almost certainly result in the extinction of Sumatras remaining lowland forests unless there are immediate policy interventions. The World Bank has already predicted that Sumatras lowland forests will become extinct by 2005 (Holmes, 2002).

Oil palm investors are more likely to establish large-scale oil palm plantations in Kalimantan and West Papua as land resources becomes limited in Sumatra. Expansion of oil palm on to forest land in these two provinces will largely depend on the Indonesian governments ability to establish suitable infrastructure. Applications for the establishment of plantations on another 3.2 million ha of forest land in Kalimantan and Irian Jaya had already been accepted by the Ministry of Forestry by 1999. The vast majority of GHG emission originates from the degradation of Indonesia peat lands in east Sumatra and central Borneo, accounting for 4% of global GHG emissions. Oil palm plantations are often established in newly cleared rainforest and peat-swamp forests (sometimes with an intermediate period of logging), instead of on degraded land or disused agricultural land, such as old rice paddies or old plantations. Deforestation contributes to regular landslides, loss of reliable water supplies, salt water intrusion and the development of acid sulphate in soils in coastal areas. Whilst logged and degraded forest is susceptible to fires and holds far less carbon than virgin rain forest, it is nonetheless rich in biodiversity and capable of regeneration if given a chance, oil palm plantation are nearly devoid of wildlife, which deplete the soil and are treated with pesticides and fertilizers. Some of the worlds most bio diverse habitats are lost and countless species, including the Orangutan, the Sumatran tiger and Rhinoceros are on the brink of extinction Peat Land Degradation Peat swamps are vital for biodiversity, for regulating the fresh water cycle, and for local economies. They provide huge number of fish richness in fire wood, rattan and medicinal products. At least 550 billion tons of carbons are stored peat globally. This is the equivalent of about 75 percent of all the carbon in the atmosphere at present, or 70 years of fossil fuel emissions at current rates. Carbon in peat is released into the atmosphere through oxidation if the peat is drained and damaged, and also through fires, which are more common where peat has already been drained, where peat forests have been logged and degraded, and during droughts, which are becoming more frequent and severe as a result of global warming. Most of the global peat is in the tropics land contributes number of 30 percent. Indonesia holds 60% of this percentage, with more than 22.5 million hectares (while 3.7 millions of peat having been completely destroyed already). According to a new study by Delft Hydraulics, Wetlands International and Alterra in 2004, peat degradation alone accounts for 97-238 million tons of carbon being emitted every year from South-east Asia, about 90% of that from Indonesia. The most likely figure is around 172 tons of carbon per year. Those emissions stem solely from the oxidation of drained peat and do not include emissions from peat fires. Wetlands International predicted that Indonesia is the third largest emitter of carbon dioxide worldwide, after the US and China if peat emissions are taken into account. If all of the carbon in peat, possibly as much as 50 billion tons, is allowed to enter the atmosphere, this will significant increase risk of global temperatures more than 2C above pre-industrial levels This level of

warming is widely understood to constitute dangerous warming as defined by the Convention on Climate Change. All the above figures are based on carbon dioxide emissions. Methane emissions from forest and peat fires are harder to calculate, however one study suggests that Indonesias fires in 1997 may have increased global emissions of methane by as much as 10 percent in that year (Buttler., et al, 2005). Different types of emission from forest and peat fires can at least temporarily reduce the atmospheres ability to break down methane quickly. Finally, peat drainage, fires and deforestation do not just emit carbon into atmosphere, they also destroy one of the most important terrestrial carbon sinks, which take carbon out of the atmosphere and help to regulate the global climate. Reason to choose new plantation from peat land in the side of oil palm estate is because it is much more cheap compare to rehabilitate disused agricultural land to prepare it for oil palm than it does to clear new land. A further incentive in many cases is that the plantation company can finance its new planting by logging and selling valuable tropical timber trees. Burning of loggedover forests and debris is still a widespread means of clearing land for oil palm plantations. Cash is recouped much faster if a company clears land cheaply by burning after logging and then plants oil palm, rather than waiting years for valuable timber trees to grow again, unlike timber, agricultural crops are short-term investments that increase cash flow quickly. Emissions from peat oxidation and fires are expected to increase considerably in coming years and decades, as peat land deforestation and drainage is expected to increase from the current 45 percent to near 100 percent in the absence of any major policy changes in countries of peat lands. III.2. Habitat loss and Degradation The response of biodiversity to land-cover change depends upon the extent to which natural habitat features are replicated and upon variation in the sensitivities of species to change. Oil palm plantations are structurally less complex than natural forests, with a uniform tree age structure, lower canopy, sparse undergrowth, less stable microclimate and greater human disturbance and are cleared and replanted on a 2530 year that in forest. Oil palm monocultures support an indisputably lower level of biodiversity, regular rows of oil palm with little understory vegetation offers far fewer opportunities for wildlife to find food, hide from predators or find a place especially the case for species that have specific habitat requirements. A large number of forest species are unable to survive within oil monocultures and even species living near plantations can suffer negative effects. The greatest threat to biodiversity is loss of habitat which refers to extreme changes that make them unable to support more than a fraction of their original processes and species. Habitat loss and fragmentation have affected biodiversity in terrestrial, freshwater and marine systems. At landscape level the loss of habitat is often gradual with a fragmentation process which disrupts extensive habitats into increasingly isolated patches of remnant vegetation. As far as
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terrestrial habitats are concerned, failure to embrace landscape management means that eventually, the background matrix can be readily distinguished from the habitat patches and corridors it contains. Figure 5. Process of Fragmentation

(source: Government of Malaysia, 2008)

Ultimately, the system will deteriorate from a perforated to a fragmented or even relictual landscape which is significantly less suitable to the combined flora and fauna of a region. In highly fragmented landscapes it is difficult for individuals (e.g. juvenile animals, seeds, or spores) to disperse to other suitable patches. If mobility is prevented then the individuals occupying a fragment may effectively constitute a small independent population, which is more likely to disappear. Even when fragmentation only leads to partial isolation, this may change one large population into several patch populations which may also affect overall viability and survival. This decline in biodiversity will drastically reduce the flow of ecosystem services on which society and individuals depend. Land clearance for oil palm plantation creates open area of the forest and leads to fragmentation process. The landscape matrix that surrounds habitat fragments may be hospitable to some native species, or may allow movement among fragments. However, other species require core habitat for their survival and are incapable of traversing the intervening man-made landscape of urban areas, industrial parks, highways, agricultural crops, and so forth. Under such conditions isolation typically causes inbreeding and eventually local extinction. Without the interconnectedness that natural habitat provides, there will be no re-colonization. With increased fragmentation and isolation of habitat patches some species become trapped in the landscape (i.e. when they cannot cross the intervening matrix). The population is fragmented into smaller and more isolated components, making them prone to systematic and random factors that may arise in the environment (Clark et al., 1990).

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In the case of oil palm plantation, some mammal species such as Borneo Orangutans (Pongo pymaeus), Sumatra Orangutans (Pongo abelii), Sumatran Tiger (Elephas maximus), Asian Elephant (Panthera tigris sumatrae) and Sumatran Rhinocerros ( Dicerorhinus sumatrensis) becoming significantly extinct due to their habitat disturbance and population isolation. (Cruel Oil, WWF) Most Indonesian terrestrial species are forest animals and can survive only in rainforest habitat, not on plantations. Of the more than 400 land mammal species of Indonesia, 140 (32 percent) are threatened, according to the Red List of Threatened Species of the World Conservation Union (IUCN). The IUCN Red List is the accepted world standard list of species at risk. Of those 140 species, 15 are critically endangered. Indonesia has 112 threatened terrestrial bird species, mainly rainforest birds. The numbers of threatened species are still greater when terrestrial reptiles and amphibians are included. Once oil palm has replaced the immense variety of hundreds of species of trees, vines, shrubs, mosses, and other plants found on every acre of lowland rainforest, most animals can no longer live there. As an industrial plantation crop, oil palm is grown as a monoculture. Most of the other plants found are low-growing ground cover. Without the rainforests plenteous variety of fruits, nuts, leaves, roots, nectar, bark, shoots, and other plant materials to eat, most animals cannot survive, without plenty of plant-eating prey animals such as deer to hunt, carnivores such as tigers cannot survive either. Additionally, open area in the fragmented forest, road and factory construction will give more access to the pouching and trafficking of mentioned endangered species activities. The edge of their habitat becoming reduced and leads them to have more conflict with human settlement, while in the side of oil palm estate, those species consider as pet (juvenile Orangutan likes to eat fresh fruit of oil palm) and most of the report from field that those species threaten the safety and security of workers. III.3. Species Richness and Competition Complex relationship between biodiversity and ecosystem services is that as species adapt to one another and to their communities, they form niches and associations. The development of more complex structures allows a greater number of species to coexist with one another. The increase in species richness and complexity acts to protect the community from environmental stresses and disasters, rendering it more stable and facilitating a continuous flow of ecosystem. The interaction between three ecosystem properties corresponding to vegetation cover (the more extensive the better) structural complexity of habitat (horizontally and vertically), and species composition or species richness (i.e. usually the higher the number of different species the better) supports ecosystem processes, landscape resilience, and the quantity and quality of ecosystem services at local, state, regional and national levels. (Government of Malaysia, 2008) There is no specific research and published studies of plants regard the biodiversity in the oil palm plantation and just 13 of animals that compared biodiversity in oil palm plantations with that in forest. Oil palm consistently held fewer than half as many vertebrate species as primary forests, whereas invertebrate taxa showed more variation. Oil palm also had much lower species
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richness than disturbed (logged or secondary) forests, although the differences were not so great. One study of bees found more species in oil palm than in forests, but might have underestimated species richness in forests because the canopy was not sampled. Across all taxa, a mean of only 15% of species recorded in primary forest was also found in oil palm plantations. Figure 5. Species Richness Comparation

The biodiversity impact of converting forests to plantations is shown by comparing species richness and forest species richness in (a) oil palm relative to primary forests, (b) oil palm relative to degraded (logged and secondary) forests. Species richness is scaled so that forest richness in primary or degraded forests equals 1. Each vertical column contains a study of one taxa (NA = not applicable). In most taxa, the highest species richness is found in primary forests. There is a large reduction in species richness in oil palm compared with both primary and degraded forests, illustrated by the gap between the bars and the line of forest equivalence. The reduction in forest species richness is even more marked in most taxa. Most studies found large differences in faunal species composition between oil palm and forests. The species lost were not a random subset of the original forest fauna, but tended to include species with the most specialized diets, those reliant on habitat features not found in plantations (such as large trees for cavity-dwelling species), those with the smallest range sizes and those of highest conservation concern. Plantation assemblages were typically dominated by a few abundant generalists, non-forest species (including alien invasive) and pests. 40 percent of the ant species found in oil palm plantations in Malaysia were aliens, including the highly invasive crazy ant Anoplolepis gracilipes. Densities of rats (e.g. Rattus tiomanicus) can reach 600 per ha, providing abundant food for predators such as blood pythons Python brongersmai, barn owls Tyto alba and leopard cats Prionailurus bengalensis.(Fitzherbert et al., 2008) Several methodological shortcomings are likely to reduce the apparent difference in biodiversity measures between forest and oil palm. It is more difficult to detect many taxa in rain forests, because rain forests have a taller canopy and more structural complexity than plantations . Also,
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estimates of species richness from small areas of oil palm or near forest edges will be artificially inflated by the presence of transient species from nearby forests. Even standardizing results based on effort (which was not done in most studies) does not fully remove these biases, especially when only a small number of species are sampled. Finally, a time lag between habitat loss and extinction might lead to the recording of some species in oil palm plantations that cannot ultimately persist there. Potential Pollutant Following plantation establishment, the greatest environmental impacts are likely to come from pollution. Water pollution from plantations and onsite mills is likely to affect aquatic biodiversity ,but such impacts have not been assessed in relation to oil palm. Potential pollutants include Palm Oil Mill Effluent (POME), fertilizers, insecticides, rodenticides and herbicides. Efforts to reduce the impacts of some of these pollutants are already in place in some plantations. POME is usually purified, so it can be harmlessly discharged into rivers; widespread use of integrated pest management and leguminous cover crops reduces use of insecticides and herbicides; and oil palm requires less fertilizer per unit of output than other oil crops. IV. Mitigating impacts IV.1. Preventing Oil Palm-driven Deforestation The ecological impact of oil palm will be determined largely by the extent to which it causes large-scale deforestation. Governments, environmental and social organizations, scientists, producers, financial institutions, buyers and consumers together have the capacity to soften the impact of palm oil production on biodiversity. Although the best strategies for impact mitigation will differ within and between countries, there are several emerging opportunities. Governmental and nongovernmental organizations can work to develop national strategies for land allocation that integrate maps of conservation priorities and agricultural suitability. Such strategies give no assurance that impacts are being minimized unless they are integrated into land use allocation and coupled with effective regulatory systems. Some efforts of Governance in Indonesia have been ongoing process. Currently, since the implementation of decentralization system of governance in Indonesia, at least 3 provinces made efforts to forest conversion. The Government of Aceh has implemented a moratorium on industrial logging and forest conversion. Aceh plans to develop 200,000 hectares of oil palm without deforestation. In the scheme of Moratorium of Deforestation on plantation expansion within planned forest areas are in the following activities: peat soils are protected from clearance, drainage and degradation, protection to the high conservation values forests/areas, protection to indigenous peoples and other forest dependent communities give their free, prior and informed consent to new plantation developments on their customary lands and full supply chain traceability and segregation systems are established which exclude palm oil from groups that fail to meet these criteria.

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The Government of Central Kalimantan is reviewing permits for oil palm plantations, rogue economics, land banking, peat burning and Governor of Papua and West Papua are reviewing forest conversion plans to be more social concerns. Nongovernmental organizations can be helpful to increase transparency by disseminating information to plantation managers and other stakeholders. The Indonesian civil society for better governance contribute important role to control palm oil industry expansion through moratorium are Sawit Watch (member of RSPO Executive Board), WALHI (Friends of the Earth Indonesia), AMAN (Indonesia Indigenous People Network), Palm Oil Smallholders Association (SPKS). IV.2. Plantation Management Oil palm estate has the core role to find solution in daily operation of oil palm plantation and industry. They shall reducing conversion of primary forests to oil palm plantation, encourage use of idle, degraded and other marginal land while promoting best management practices in production, processing to make sustainable yield improvement while managing their impact wisely to the environment by reducing land degradation, pollution, biodiversity preservation and recommended to establish Corporate Social Responsibility (CSR) to integrate social concern and improve living standard of adjacent community. Smallholder also becomes an important party to be involved. Especially to improve access to high-yielding varieties, retain diversification, encourage establishment of smallholder cooperatives to coordinate action of managing impacts. International community shall also contribute active roles to address the issues since palm oil is not just only Indonesia or any developing countries problem, but it creates global concern because its impacts on global market, environment and climate change. It is hoped that international community is be able to coordinate national policies, market interventions and accelerate multilateral trade liberalization. Additional effort that could be done is to reward the producer or exporter countries that implement green policy to reduce emission such as REDD project or similar project. In the sector of worldwide biofuel, international organization shall improve policy planning and coordination, harmonization of trade regulations, enhancing sustainability standards and promoting transition to 2nd generation technologies and feedstock while coordinate research and investment to address this problem.

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V. Conclusion Palm oil plantation and industry is important to provide dietary fat for the world, to create job and raise economic growth in Indonesia. But in the other hand, that fast growing of oil palm set the negative effects on ecology especially biodiversity. Oil palm monocultures serve lower level of biodiversity, regular rows of oil palm with little understory vegetation offers far fewer opportunities for wildlife to find food, hide from predators or find a place especially the case for species that have specific habitat requirements. A large number of forest species are unable to survive within oil monocultures and even species living near plantations can suffer negative effects. Land use change for oil palm plantation in the forest ecosystem and peat lands, land clearance methods used by estate, principally is the change on original structure of former ecosystem in which the new ecosystem have less flexibility to provide its service. Forest fragmentation caused by oil palm plantation and industry has effects on wildlife populations that are far greater than simply the area of forest lost or the number of trees destroyed by the infrastructure. Fragmentation causes disproportionate habitat loss for such large forest mammals as elephants, tigers, and rhinos, because those animals avoid forest boundaries. It needs a strong will of all key stake holders such as governance, communities, oil palm industry to reduce impacts of oil palm on biodiversity. The Governments must ensure that full social and
environmental impact assessments are carried out prior to the development of any new oil-palm plantations, and their results made public and incorporated into the management plans while developing and enforcing the law and regulation to address this problem.

Oil palm plantation estate shall join the Roundtable on Sustainable Palm Oil (RSPO) to apply
sustainable agriculture and minimizing negative impacts on environment, both nature and social environment. It is recommended to the estates to have Corporate Social Responsibility (CSR) to

contribute for the nature conservation efforts and improve the living standard of communities nearby.

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