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1. Deforestation - Substantial tracts of tropical forests are cleared to make room for large plantations to service an ever increasing demand for palm oil. Studies show that the forest cover on the island of Borneo had declined from 73.7 percent in 1985 to 50.4 percent in 2005, while the projected cover in 2020 was 32.6 percent. Loss of forest cover in Sumatra, Indonesia, has also been very alarming.
2. Loss of biodiversity - Concerns about biodiversity loss are directly related to the loss of natural forests. In particular, orangutan habitats have been threatened by palm oil production. In 1900, there were around 315,000 orangutans in Indonesia and Malaysia. Today, fewer than 50,000 exist in the wild, split into small groups. The palm oil industry is the biggest threat to orangutans, with the species like to be driven to extinction within 12 years unless the devastation of their natural habitat is halted. A related problem has been that fragmentation of natural forest habitats and encroachment by palm oil development which has been resulted in serious human- wildlife (elephant, etc) conflicts.
3. Climate change - 15% of all human induced greenhouse gas emissions are caused by deforestation, forest degradation and peat land emissions. As land on mineral soil becomes less readily available, the expansion of oil palm is increasing on peat lands. . As these areas are drained, the peat is exposed to oxidation, resulting in significant CO2 release over an extended period. Other significant sources of GHG emissions associated with oil palm are the use of fires for land clearing and the emissions of methane from the effluent treatment ponds of palm oil mills. Forests are felled, peat swamps drained and burnt, creating a haze that covers large areas, affecting people’s health and disrupting economic activities.
4. Use of pesticides and fertilizers - Misuse of pesticides and fertilizers is frequently cited as a negative impact of oil palm cultivation. In general, pesticide use is low compared to many other crops, but some chemicals used, pose significant risks to operators and smallholders and the environment. Among these hazardous chemicals, the herbicide paraquat gives the most cause for concern, as it poses serious health hazards to the spray operators. The Pesticides Action Network-Asia & the Pacific has called for a ban on paraquat production and use on numerous occasions, but to no avail.