The Palm Scribe

Tungkot Sipayung, unraveling the myths and facts on palm oil

There are no secrets in palm oil for Tungkot Sipayung, who earned his Doctorate in Agroeconomics from the Bogor Institute of Agriculture with a Cum Laude. Sipayung has an intimate knowledge of Indonesia’s top export commodity and has published a book ”Myths and Facts in the Indonesian Palm Oil Industry as a social, economic issue and in the global environment.”

TUNGKOT SIPAYUNG:  Only palm oil has a certification, be that from RSPO or ISPO. Other vegetable oil do not have a certification. (Photo: Derry Wiratama/The Palm Scribe)

Sipayung , who is the executive director of the Palm Oil Agribusiness Strategic Policy Institute, is the person to go to if there are questions on palm oil. His book, first published in 2015 is already in its third print, the latest one issued in the middle of this year.

“Each edition always carry additions and updates, and we also included the results of discussions held at 20 universities across Indonesia, on the book” Sipayung told the Palm Scribe at his office in Bogor, West Java, on Monday (20/11/2017).

Sipayung said that in 2013, for every 100 news reports on palm oil, 90 had a negative tone. Information and literature on palm oil were scarce in the country and there was also an acute shortage of research on palm oil, even though the crop had already become a potential earner by then.

“Players in palm oil and the government were afraid to talk because they would then become the targets of attacks from the international world and from NGOs, who all say that palm oil was bad,” Sipayung said.

For Sipayung, this gave rise to a sense of moral responsibility to defend the commodity, “First of all, because I am an academic in the field of agriculture and secondly because at the time, I was still with the ministry of agriculture and one of the issues then was palm oil,” he said.

He immediately engaged himself in various efforts, including conducting literature studies and researches, forming a team to specifically study the crop and also finally, to prepare a book that would be a response to the accusations and negative issues leveled against palm oil.

Initial rejection of the book and its content was high. Students, professors, and lecturers from various universities, used to using google as their source of information, were convinced that palm oil was indeed, bad. “I got them to talk with me. Just because it is deemed to be bad, should we just dump palm oil?” Sipayung asked.

Palm oil, had by then always been linked to health problems, with opponents saying it was high in cholesterol. “This issue has already been there since the 1980s. It was the American Soybean Association that popularized this issue,” Sipayung said.

The fact is that like any other vegetable oil, palm oil has been scientifically proven not to contain cholesterol. High cholesterol levels were only found in animal oils. “It just so happened that America was abuzz with the issues of cholesterol’s effect on human health. Indonesia and Malaysia challenged this issue,” Sipayung said.

Indonesia and Malaysia are the world’s top producers and exporters of palm oil, accounting for some 85 percent of global supply.

Following the failure in using the issue of cholesterol against palm oil, the opponents then began to build up the myth that palm oil was replete with trans fat. The fact is that the process to produce oil from oil palms do not use hydrogenation as, for example, with soybean. Because of the absence of this process, no trans fat can be formed in palm oil. “This has already been proven by experts in Europe and in the United States. It is actually soy bean that contains trans fats because they have to go through a hydrogenation process,” he argued.

The palm oil industry has also been accused of neglecting the environment and even of deforestation. “It is true that deforestation has taken place but the question is, is deforestation only happening in Indonesia? And is deforestation wrong?” asked Sipayung.

He said that based on research, deforestation had already been taking place much earlier in Europe, even before 1100. In America, deforestation took place as recently as the 1930s. All countries engaged in deforestation as forests covered the earth’s entire landmass. “If there were no deforestation, no conversion from forests to non-forest purposes, where would we be building our homes, our industries? All land, cities, came from forests,” he said.

“Therefore, the issue should not be deforestation. The issue should be whether we engaged in selective deforestation or not. Europe and North America engaged in total deforestation in their times. In this total deforestation process, all biodiversity became extinct,” he said.

Sipayung said that Indonesia had a policy of not engaging in such total deforestation” We have laws on forests, environment, spatial planning, that requires that at least 30 percent of the land should be maintained as original forests. The position now is that from the 190 million hectares of our land, 88 million hectares of this are still forests,” he said.

Summing all these up, deforestation did indeed take place and it is a normal phenomenon across the world. “The difference between Indonesia and other countries is that we did not engage in total deforestation, but only a partial one. The fact is that 47 percent of our land are still covered in forests, some virgin forest which Europe and North America no longer have. Our forests are also still home to orangutans and other tropical animals. This is proof that we do not engage in total deforestation.”

Responding to accusations that palm oil plantations triggered the greenhouse effect and caused the destruction of peatland, Sipayung said that data from the International Energy Agency and other international institutions such as the Food and Agriculture Organization (FAO) regarding the top emitters of glasshouse gases, Indonesia was not even among the top ten countries. “The largest is China, India, Europe and America. Just from this we can see who is really the biggest contributors of greenhouse gases,” he said. (Read also in CNN: Experts claim the palm oil industry does not cause carbon emissions. Instead palm is a source of absorption of emissions).

Sipayung said that in Europe, peatlands are not only planted but are even mined like coal, and used for energy generation, ”They lost almost 10 million hectares of peatland. We still have many. From the 18 million hectares of peatland in Indonesia, only 6.5 million hectares are being used for agriculture and plantation. Palm oil plantations use some three million hectares only,” he said.

“If it is said that palm oil is destroying peatland, the proof is that there are palm oil plantation in East Sumatra which have been planted for more than 100 years on peatland. There are no problems there. The same can also be found in Sarawak, Malaysia. So, this issue is only being used to discredit palm oil,” he added.

Plants are part of the lungs of the ecosystem, and this includes oil palm trees. “Therefore if it said that palm oil damages the environment, that is clearly not true, That there are problems in the management of peat, is the real problem. So, if there is problem there, what needs to be done is to improve their management, and not shoo palm oil away from peatlands. That is a mistaken view.”

“Just so you know, across the world, only palm oil has a management. Only palm oil has  certification, be that from RSPO or ISPO. Other vegetable oils do not need certification. If they really care about the environment, they also should have a good management,” Sipayung stressed.

Whatever is being done with palm oil, the crop will continue to be the target of attacks as the main reasons for these attacks are not environmental problems but rather business competition. So far, there are four main commodities in vegetable oils – soybeans, rapeseeds, sunflowers and palm oil.

From among these four, soybean had ruled for hundreds of years. When palm oil appeared, especially since Indonesia’s success in planting the crop in 2006, the market share of soybean oil decreased, with palm oil eating up soy’s market share. Other vegetable oils also lost to palm oil in economic terms.

Because its detractors could not advance strong economic reasons against palm oil cultivation, they resorted to raising non-economic issues.

“That is the background. It doesn’t matter if the certification palm oil was issued by angels, the attacks will continue to take place,” Sipayung said.


Profile of Tungkot Sipayung: 

Born in Simalungun on October 25, 1965, Sipayung completed his doctorate in agro-economic sciences with a cum laude distinction from the Bogor Institute of Agriculture in 2000.

Tungkot Sipayung, executive director of the palm Oil Agribusiness Strategic Policy Institute

His wide experience covers there different fields, — academia, bureaucracy and business. In the government, Sipayung was special assistant for agribusiness development to the minister of agriculture in 2000 to 2014. He was also a member of the government delegation to the World Agriculture Forum in St Louis, Missouri, United States, in 2002 and to the World Food Summit in Rome in the same year. He was coordinator of the North Sumatra Agropolitan Region Development in 20023 until 2005 and is an economic advisor to several provincial and district governments.

In business, Sipayun led several private companies, including as member of the Board of Commissioners of PT Petrokimia Kayaku Gresik from 2002 until 2007 and later of PT Perkebunan Nusantara IV Persero in 2008 to 2013 and he was the chairman of the Risk Management Monitoring Committee. He has since 2011 become head of palm oil advocacy and policies with the Association of Palm Oil Producers of Indonesia (Gapki) and is the founder and executive director of the Palm Oil Agribusiness Strategic Policy Institute since 2013.

Sipayung has taken part in comparative studies to the ASEAN Potassium Mining Corp. in 2000, to the Malaysian palm oil agribusiness sector in 2009, to India’s downstream palm oil industry in 2010, to the downstream industry in China in 2010 and to the Oleochemical market and industry in the European region in 2012.

His academic experience includes being a senior researcher at the Center for Development Studies at the Bogor Institute of Agriculture (1994-2008), Lecturer at the same institute’s master studies (1996-2000), instructor in credit financing and risk management for several state-owned banks 91997-2000) and instructor in project evaluation and planning with the LPME of the University of Indonesia. Since 2000, he has been teaching macro-economics, managerial economics, economic research and providing tutoring for postgraduate students at the Trisakti University’s economy faculty as well as in several other universities in Jakarta.

Sipayung has also worked as a consultant in economics for several state institutions since 1988 and also actively conducted researchers in the fields of agriculture and food, agribusiness, palm oil industry, poverty, regional development and economic policies. He is a frequent speaker at seminars, both national and international, is a prolific author and editor and has published numerous research papers in a number of scientific journals.

His bibliography, authored or edited includes:: Pembangunan Agribisnis; Paradigma Baru Pembangunan Ekonomi Berbasis Pertanian(agribusiness development: a new paradigm in economic development)  (1999, Pusat Studi Pembangunan IPB); Suara Dari Bogor, (Voice from Bogor) (2000, Pusat Studi Pembangunan IPB); Agribisnis Pulp and Paper (Pulp and paper agribusiness) (1999, PSP); Pengembangan Agropolitan dan Dukungan Sarana Prasarana (Agropolitan development and the support of facitlities and infrastructure) (1998, PSP/PU); Perkebunan Kelapa Sawit Dalam Pembangunan Ekonomi Dan Lingkungan Hidup Sumatera Utara (Palm oil plantation in the economic development and environment of North Sumatra) (2011, IPB Press); Ekonomi Agribisnis Minyak Sawit Palm Oil Agrobusiness Economy) (2012, IPB Press); Transformasi Revolusioner Bisnis Perkebunan (Revolutionalry transformation of the plantation business) (2012, IPB Press). Industri Minyak Sawit Indonesia Berkelanjutan (Sustainable Indonesian palm oil industry) (PASPI, 2014); Blue Print dan Roadmap Industri Minyak Sawit Indonesia Menuju 2050 (Blueprint and Roadmap of the palm oil industry moveing towards 2050 (PASPI, 2014); Kontribusi Industri Minyak Sawit dalam Pembangunan Ekonomi dan Lingkungan Hidup (The contribution of the palm oil industry to the development of the economh and the environment (PASPI, 2014); Industri Minyak Nabati Dunia Menuju 2050 (World’s vegetable oil industry going towards 2050) (PASPI, 2014); and, Industri Minyak Sawit Dunia Menuju 2050  (the world’s palm oil industry moving towards 2050) (PASPI, 2014).


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