Jatropha Biodiesel Roadmap Philippines

8/14/2019 Jatropha Biodiesel Roadmap Philippines

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Bio-fuelling Poverty?

Potential Social Impacts of Biofuel Developments

in Indonesia and the Philippines

and the Need for Social Standards

Shanghai, 13 November 2007


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Biofuelling Poverty, or development?

Biofuels should offer development and povertyalleviation opportunities for poor peoples:

- Opportunities for poor farmers

- Opportunities for agricultural labourers

- Opportunities to reduce oil imports

- Opportunities to increase access to energy

But in the absence of comprehensive and enforceablesocial standards, biofuel production poses more in the

way of threats for poor people


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List of Content

Context & Background

Oxfams Position

1. Social Impacts

2. Social Principles


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Context and Background

IndonesiaPhilippines


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Context and Background-Indonesia

Indonesia Quick Profile:

Population: 224.328 million (2007) About 60 percent reside in rural area and work in

agriculture sector (2007)

Top agri export commodities: oil palm, rubber

Poverty level: 16.58 percent or 31.17 million citizens(2007)(poverty line at IDR 166,697 (about USD 19) /month/cap)

about 80 percent of the poor reside in rural area(Suryahadi, Suryadarma, Sumarto and Molyneaux, 2006)


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1. Existing and potential biofuels

feedstock production (palm oil,jatropha, cassava, sugarcane etc)Indonesia and Malaysia account forabout 80 percent of global palm-oilproduction

(Indonesia: concern grows over palm oil

production, Oxford: Oxford Analytica,2007).


Biofuels Development:

2. Significant expansions to increase biofuels feedstock production

(plantation expansions, new investments etc)Palm-oil cultivation is set to expand from its current six millionhectares to 20 million by 2020


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1. The shift of policy focus from energy diversification to

poverty alleviation and employment creation(through the President Decree No. 10/2006 on theFormation of the National Committee for BiofuelsDevelopment to Accelerate Poverty and Employment

Reduction)2. The important position of biofuels: 1. to contribute to

5 per cent total energy mix (the President RegulationNo. 5/2006); 2. Its policymaking and implementation

involves wider government institutions national andlocal

Biofuels Policy:


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3. Main policy target to reduce poverty andunemployment is hard to achieve:

Shortage of land for plantations Industry structure and value chain problems,

which prevent smallholders to get adequate

benefits Lack of policy incentives and governmentfinancing, especially for smallholders/micro,small and medium enterprises


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Employment Projection from Biofuel Development -2010

Source: National Commitee on Biofuel, 2007

87,13711,5386,25068,1821,167Indirect Labourers

3,500,000750,0001,500,000500,000750,000Direct Labourers

TotalCassavaSugarcaneJatrophaOil Palm


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Emerging IssuesBiofuels development is seen asopportunities to raise farmersincome, create employment andboost rural development:

1. The Government of Indonesia

2. Parcell and Westhoff, 2006

However, while potentiallycreating new market, employment

and livelihood opportunities,biofuel developments insteadcould create negative socialimpacts.


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Emerging Issues

In Indonesia, these impacts are emerged mainly causedby following situations:

High and increasing demand of biofuels feedstockproduction from developed countries along withpoor standardisation

- EUs target that biofuels must provide ten per centof member states fuels by 2020(European Commission, Renewable Energy Roadmap)

- From 1993 to 2003, biodiesel production in EUcountries have increased by around 1500 per cent(http://dataservice.eea.europa.eu)


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Insufficient regulations and its implementations

(Lack of coordination between governmentinstitutions in central level and inter-level ofgovernment: central, provincial and district level)

Gaps in private sector engagement


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SocialImpacts


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Main Social Impacts Palm oil Case:

Potential competition between foodand biofuel feedstock productioncould cause food price rise.

Cooking oil price has increasedby around 50 per cent in the lastfive months

The Increase of imported corn

price for farm animal feed thateventually do harm to breeders

1. Food security


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2. Land Conflict

There are several types of conflict, but at root many ofthem share the same problem: well-resourcedcompanies are given legal concessions to clear the landby the district governor. In contrast, the villagers rarely

have any legal titles, but base their claim on what iscalled customary land rights

1. Happened in Kalimantan, Sumatera, Sulawesi andWest Papua;

2. The number of communities involved in conflictsdriven by palm oil plantation has mushroomed toabout 400 in the whole of the country. (Sawit Watch)


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3. Biofuels-driven deforestation

Natural forests in Indonesia are being cleared sorapidly that up to 98 percent may be destroyed by2022 (UNEP)

Palm oil plantations are accused as a significant driver

of deforestation 50 percent of new plantations are allocated on peat

lands

(Wetlands International)

a lack of reliable statistics to confirm the exact rate ofdeforestation and what percentage is caused by palmoil development.


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4. Unequal benefits for smallholders

The highly unequal structure of the palm oil industry inIndonesia suggests that the lions share of the benefits willaccrue to large companies

There is strong evidence to suggest that the recent palm oilboom is resulting in a shift to a more trans-national industry

structurepalm oil production: 30 percent in the hands of smallproducers, about 50 percent by private companies and 20percent by state companies. About 1.8 million hectares ofthe 6 million hectares are held by small producers underdifferent landholding arrangements, and as many as 4.5million poor people (if we include all family members) areestimated to be dependent on the sector (Colchester and Jiwan,2006)


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The other smallholders problems:

(James Painters interview with local producers, the small producersassociation (SPKS) and Indonesian NGOs, July 2007)

1. Selling contract at fixed and low prices;

2. Long-term debt to the companies;3. The small size of landholdings (two or three hectares);4. Lack of proper consultation and transparency in the

companies dealings

Other Problems:

- The exacerbation of social and economic divisionswithin communities

- Increased migration to find labour


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Urgencies:

More transparent price setting At least five hectares per farmer to have a decent

living

Less harsh credit terms Proper consultation with small producers

Greater recognition of customary landrights/improved land tenure


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Context and Background-Philippines

Country Profile : Quick Facts

Population 88.7M (2007 projection)

70% rural; 2/3 depend on farming (41M) ~50% of the labor force engaged in

agriculture 30% (26.6M)of the population are poor 11M live on less than $1/day

Land Area 30,000,000 hectares Agricultural land 14M has. Forest lands 16M has.

Top Agri products: rice, corn, coconut,sugarcane

Farm Size: small farms averaging 2 has;85% of all farms no more than5 has.


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o RP-China Bilateral Trade Agreement

4/17MOUs involve land dealsamounting to 1.24M has for hybrid

corn, hybrid rice & sorghum(www.bulatlat.com)

o Dept of Agriculture (DA) currently

facilitating over 725,000 has of land forvarious foreign investors (Australia, Japan,

US, China, UK, Germany, India) for

feedstock cultivation (sugarcane, cassava,

jatropha, oil palm & coconut)(www.da.gov.ph)

o 2 M has are being targeted for

agribusiness devt by 2010 (www.da.gov.ph)




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o Lands currently planted to sugarcane and coconut

are insufficient to meet demand for biodieselfeedstock production.(roadmap to bioethanol,www.da.gov.ph)

o Feedstock Requirements: SugarcaneBlend Yield Liters Ethanol Area Required*

5% min blend 223 million 49,000 has.10% min blend 482 million 106,000 has

*at 4550 liters ethanol/ha sugarcane (roadmap to bioethanol,www.da.gov.ph)

o Coconut: 122,000 hectares of coconut land areneeded to meet the demand for coco diesel underthe new law. (www.da.gov.ph)




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o In related developments, 454,000 has are being

earmarked for oil palm plantations in Mindanao;(www.allheadlinenews.com)

o For Jatropha, 1.1 M hectares are required to produce5.5 MMT of biodiesel feedstock (www.da.gov.ph)




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Biofuels Policy: Legal and Institutional Context of the Biofuels Policy

Philippine Energy Plan 2005-2014

60% self-sufficiency by 2010 and beyond(www.doe.gov.ph)

Biofuels Act of 2006 (RA9367)

1% blend with diesel fuel in 2007; 2% by 2009

5% blend with gasoline fuel in 2007; 10% by 2010

Mandates the Dept of Agriculture to ensure increasedproductivity and guarantee sufficient supply of biofuel

feedstock; identify potential areas suitable for expansion

and production of raw materials as feedstock (DOE Dept

Circular No DC 2007-05-0006)(www.doe.gov.ph)


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Biodiesel Program & Bioethanol Program(www.doe.gov.ph)

CME or coco-biodiesel and jatropha

for bioediesel Sugarcane and cassava for fuel

ethanol


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Emerging Issues:

o Lack of transparency and meaningful consultations

could encroach on land rights and affect rurallivelihoods and smallholders;

o Land agreements being entered into violateconstitutional provisions on the lease of lands toforeign citizens; and threatens the agrarian reformprogram of the State

o Conventional plantation agriculture can deplete

water resources and cause soil degradation


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o Labor relations in sugar plantations in the countryhave been traditionally exploitative and oppressive

o Potential demand for non-food use and for supplyingneeds abroad, can compete with local food andenergy requirements, and thus threaten food andenergy security.

o The Biofuels Act is silent on environmental andsocial standards on biofuels production


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Oxfams Position

1. Social Impacts

2. Social Principles


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Main Social Impacts

1.Destruction of livelihoods

2.Indecent work

3.Exploitation of smallholders

4.Food Security


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Main Social Impacts

1. Destruction of livelihoods

Displacement of people from their land; 60million indigenous peoples (UN Report) and 5million of these are in the Indonesian region ofWest Kalimantan

Unsustainable practices of conventionalplantation agriculture can harm water, air andsoil which eventually do harm to peoples

livelihoods


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Main Social Impacts

2. Indecent Work

In oil palm plantations in Indonesia, women are

drawn into unpaid work; and are routinelydiscriminated against

Proper training and safety equipment are lacking,

with serious implications on health

Trade union rights are weakened by intimidationand long mediation processes


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Main Social Impacts

3. Exploitation of Smallholders

30% of Indonesian palm oil is produced by

smallholders, supporting up to 4.5 million people

Smallholders are bonded to the palm-oil companiesthat provide the credit and planting materials, as

debt accumulates over the first eight years beforeoil palms become profitable

Smallholders have no choice to whom they sell,

they are price takers


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Main Social Impacts

4. Food Security

Biofuel production creates competition for resources

for food and other agricultural products, and poorpeople become at risk of increased food insecurity,in terms of increasing food prices, & vulnerability toeconomic shocks (e.g. link b/w oil & food prices)

Low income countries that rely on food imports aremost at risk;

FAO lists 82 countries as Low Income Food DeficitCountries (LIFDCs); there are 40 in Africa and 21 inAsia Indonesia and the Philippines are included inthat list (FAO, Nov 2006)


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Social Principles

More flexibility on targets (such as EU biofuelstarget) by taking account sustainability

Develop social standards which apply to all bio-fuelssuch that:

All workers, men and women, enjoy decent

work as defined by the ILO Feedstock cultivation does not adverselyimpact on local communities or indigenouspeoples

Women and men smallholders are treatedfairly and transparently

The right to food is preserved


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Social Principles

The process for developing principles and criteriashould be inclusive and participatory;

Standards should provide means by whichsmallholders can seek certification, such as groupcertification schemes;

Ensuring that transport emissions reductions donot come at the expense of poor peopleslivelihoods.


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Oxfam works with others to find lasting

solutions to poverty and suffering.

Documents

Jatropha Biodiesel Roadmap Philippines