Whose Forest? The palm-oil business is pressuring wildlife.

Byline: Lorien Holland

In Malaysia and Indonesia, palm oil is viewed as the "wonder oil." It's easy to see why: Malaysia's production of the oil has doubled over the last 20 years, while Indonesia's has tripled. Between them, Malaysia and Indonesia now account for 84 percent of global production of the cash crop and 88 percent of global exports--worth some $11 billion last year between them. And demand for palm oil is rising: since 2004, it has pipped soybean oil as the world's biggest vegetable-oil crop. It's widely used in Asia for cooking, and in Europe for processed foods and toiletries ranging from bread to soap, ice cream to lipstick. In the United States, where usage is low, imports have been rising steadily because palm oil, unlike other vegetable oils, contains no trans fats. Palm oil also has potential as a biofuel, particularly with prices for crude oil so high.

The problem is that oil-palm plantations need land to expand, and their swelling size has raised alarms among environmentalists. The land occupied by oil-palm plantations in Malaysia has risen dramatically, from 642,000 hectares in 1975 to nearly 4 million hectares in 2004. Much of that space has been carved out of primeval forest, home to the endangered orangutan. According to Friends of the Earth, a London-based environmental group, the business has become "the primary threat" to the survival of the orangutan and other endangered species in the forests of Southeast Asia. Other environmental groups describe palm as the "cruel oil."

The standoff is prompting a debate echoed in China, India and other developing countries: can economic growth coexist with a healthy environment? Malaysian and Indonesian officials, bristling at the criticism, note that oil-palm planters tend to use land that has already been logged, not virgin forest. And they point out that on Nov. 23 in Singapore, the Roundtable on Sustainable Palm Oil (RSPO), a fledgling organization representing environmental, government and plantation-owner groups, agreed to a ban on new plantations in areas with so-called high conservation-value forest--meaning, ...