Palm oil is everywhere. It’s used in hundreds of supermarket products and increasingly, for biofuel production, nevertheless it is one of the most devastating crops for the environment. Palm oil is not just ecologically damaging but ethically unsound, its production reinforces abject poverty which is amplified and consolidated by the most novel manifestation of late-modernity; globalisation. Consumerism drives demand for palm oil rich products in the global North, but simultaneously ‘modernisation’ and ‘development’ can promote extreme inequality in the South – even via the very economic instruments purportedly in place to assist such countries escape deprivation, namely export-led growth.
Indonesia was born of global trade and has always been a source of cheap raw materials and even cheaper labour for foreign powers. The great-grandparents of today’s Indonesians originated from Java and came to work under contract on the Dutch cocoa and rubber plantations. These workers, although technically free, were tied into 3 year contracts to pay off their initial boat trip from Java. Their wages were so low that the majority of their salary went towards debt repayments and were therefore forced to borrow further from the plantation owners, in order to pay for living costs during these 3 years. This forced them into even more debt and thus longer contracts to repay ever increasing loans. They essentially became bond slaves to the Dutch, trapped by cycle of debt repayments and extended loans. This was hundreds of years ago, surely the lot of the average Indonesian must have improved since colonial times?
In 1965 the communist leader Sukarno attempted to re-nationalise the country’s wealth and natural resources, withdrawing Indonesia from the World Bank and IMF. Within one month a US and UK supported military coup overthrew the government placing General Suharto in power, a position he held for the next 33 years. The dictator allowed the IMF and World Bank to re-enter Indonesia, securing billions of dollars of loans – in 2006 the total outstanding debt stood at $144b (domestic debt of $76.8b and external debt of $67.7b). It is estimated that just under a half (around 4/9) funded military equipment, one third remains unaccounted for/missing and just under one fifth (2/9) was spent on enticing big business to ‘develop’ Indonesia. During this period of ‘modernisation’ it is estimated the regime massacred between 1-2 million civilians.
Today the big money is in palm oil. Indonesia is the largest producer of the oil but its agricultural workers are some of the lowest paid in the world at between $1–$1.50/day, the dominance of the regional trade forces millions into low paid, unsecure plantation jobs. They are required to sign 30 year contracts, with no sick pay, holiday entitlement or health and safety protection as these are not required under WTO regulations, despite pesticides poisoning and killing 40,000 agricultural workers globally per annum. Gramoxone, the brand name for Paraquat, is used on the palm oil plantations. The chemical is the primary ingredient in Agent Orange. The plantation worker barracks have mud floors, metal roofs, regularly no plumbing or drainage, and can sleep between 5–8 workers. Each worker’s daily picking quota is 1 tonne of palm fruit, and worth around $32.38 to the company, yet the workers receive around $1.14/day. As such their families regularly help out to meet the quota at no extra wage. Weekly the rainforests are felled and levelled to make way for plantations destroying complex ecosystems, even expanding into ‘conservation’ peat flats which, once disturbed, release hundreds of tones of CO2 into the atmosphere – all paid for by the World Bank in the name of ‘development’.
These loans are intended to encourage economic growth from palm oil exports, but on the ground the reality is very different. For these workers, globalisation, modernisation and development has meant infinitely more spent on tanks, fighter planes, helicopters and landmines to suppress social movements than on education or housing. The loans taken out by the Indonesian government expand big business but destroy smaller competitors and local economies. Workers become both the bargaining chips and the means to pay back the debt. New loans are taken to repay the interest on the debt alone, increasing national debt further and perpetuating the cycle. The instruments of globalisation have essentially made Indonesia and its people bond-slaves to the international market, as their ancestors were to the Dutch. They are forced to accept whatever conditions their creditors impose with no prospect of ever paying-off the debt or improving their own individual prospects.
“ ...we often hear that globalisation and free-market politics will bring good fortune to all humanity. That’s what you hear big businesses and governments say – in their opinion globalisation is our inevitable fate. But actually, globalisation is their creation, their own language, a system they have created to further their own interests and profits.”
Palm Oil Plantation Worker, Sumatra.