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How palm oil industry is having a devastating impact on Indonesia's health, rainforests, and labor market

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Abstract

Palm oil is an essential commodity in Indonesia. However, despite the importance of palm oil for Indonesia's economy, on the contrary, this sector could also harm society as palm oil industries have incentives to burn the forest for extensive land clearing, creating forest fire, and air pollution. This study estimates palm oil companies' impact on forest fires, air pollution, health outcomes, and labor market consequences in Indonesia. This study uses data from The Indonesia National Socioeconomic Survey (SUSENAS), Universal Public Insurance Claim Data from Social Security Administrator (BPJS), and Ministry of Forestry and Environment Statistics. In addition, this study also uses municipality-level data to calculate forest fire and individual-level data to estimate health and labor outcomes. Finally, this study employs ordinary least squares (OLS) and matching methods to assess palm oil company's impact on forest fire, health, and labor outcomes. Estimation result suggests palm oil company significantly increases forest fire land area. Further, it also increases the probability of asthma, increases the likelihood of inpatient, and substantially decreases decision to work—more considerable negative health impact for children and elderly, more vulnerable group to forest fire pollution. Moreover, forest fire increases inpatient for the asthmatic individual and all other individuals who experience general respiratory symptoms.

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All data generated or analyzed during this study are available from the corresponding author on reasonable request.

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Acknowledgements

The author would like to express gratitude to the Ministry of Finance of the Republic of Indonesia for providing facilities and providing funding that has made this research endeavor possible.

Funding

The author’s research is funded and supported by the Ministry of Finance of the Republic of Indonesia.

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Authors and Affiliations

  1. Fiscal Policy Agency, Indonesia Ministry of Finance, Notohamiprodjo Building 6th floor, Jl.Wahidin No.1, Jakarta, 10710, Indonesia

    B. Arifin

  2. Fiscal Policy Agency, Indonesia Ministry of Finance, Notohamiprodjo Building 7th floor, Jl.Wahidin No.1, Jakarta, 10710, Indonesia

    D. Setyawan

Authors
  1. B. Arifin
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  2. D. Setyawan
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Contributions

BA contributed to conceptualization; data curation; formal analysis; investigation; methodology; project administration; resources; software; supervision; validation; visualization; and writing—original draft. DS was involved in conceptualization; formal analysis; investigation; project administration; resources; visualization; and writing—review and editing.

Corresponding author

Correspondence to D. Setyawan.

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Conflict of interest

There is no potential conflict of interest relevant to this article reported. This study has not been published in journals elsewhere, and that it has not been submitted simultaneously for journal publication elsewhere.

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Editorial responsibility: Chenxi Li.

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Arifin, B., Setyawan, D. How palm oil industry is having a devastating impact on Indonesia's health, rainforests, and labor market. Int. J. Environ. Sci. Technol. 19, 11775–11788 (2022). https://doi.org/10.1007/s13762-022-03923-4

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  • DOI: https://doi.org/10.1007/s13762-022-03923-4

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