Palm Oil Industry In Indonesia

Although Indonesia is heavily operated by commodities, they have caused destruction to Indonesia’s stunning forests, terrains and animals. “Palm oil is an important and versatile vegetable oil which is used as a raw material for both food and non-food industries” (The social and environmental impact of palm oil). According to the WWF, overconsumption of palm oil has destructively impacted Indonesia’s geography. The reason why palm oil plantations causes deforestation is because they have to be situated in rainforests, as they grow most effectively in rain forest climates. “Globally there are between 12 and 13 million hectares of palm oil plantations. The majority of these are located in Indonesia and Malaysia” (The social and environmental

“Despite uncontrolled growth, the coal sector makes up a mere 4% of Indonesia’s GDP and prospects for future growth are even more limited” (How coal mining hurts the Indonesian economy). This is evident that some commodities are not as valuable. Large coal industries are harming the stability of Indonesia’s economy, unbalancing Indonesia’s stability of income and ratio of interchange. Additionally, coal does not hold much value and worsens Indonesia’s poverty situation. “The palm oil industry has the potential to generate significant economic and social development in Indonesia” (The Economic Benefit of Palm Oil to Indonesia). Surprisingly, vegetable oil is one of Indonesia’s utmost profitable agrarian material. In 2008, beyond $14.5 billion dollars were distributed in products made of palm oil. Moreover, it provides 14% of its GDP, service for more than 41% of all citizens in Indonesia, and more than half of the countryside’s domestic revenue. On the other hand, Indonesia has exported a total of $2,200 US dollars of gold. “Around 60 percent of the gold production is used for jewelry, 40 percent for investments and 10 percent for industries” (Gold). Therefore, some commodities have led to great fortunes for Indonesia, while others contributed very little towards Indonesia’s

Since Indonesia consists of many coal reserves, the government has been constructing more coal-powered industries, to upsurge coal deals. “The Indonesian government is currently stimulating the establishment of national processing industries in order to increase profits by exporting products that have added value, while preventing the current over-exploitation of the country's national resources” (Gold). Due to gold’s current success as a commodity, government is trying to find methods to further enhance Indonesia’s managing business. “Law 41/1999 on forestry was introduced. This law strongly prohibited open mining in protected forests and mandated the revocation of all mining licenses that had been granted in protected forests” (Devi, Bernadetta). Lastly, to encourage the utilization and sustainability of plant oil production, the Indonesian government started an obligatory organization known as ISPO, and CPO to try to reduce the negative effects palm oil plantations have on the environment as much as possible. In summary, in order to sustain a secure utilization of commodities, new laws were made and the government took advantage of the success of commodities to find ways to maximize their