Malaysian Palm Oil Council chief: Palm oil has become important revenue earner

Hanim Adnan, The Star 27 Jun 09;

AMID the industry’s quest for sustainability and environmental protection, oil palm planters from Malaysia and Indonesia have been urged not to yield to the demands of non-governmental organisations (NGOs) and environmentalists who are targeting deforestation.

Sharing global resources should mean sharing responsibility to sustain these resources, says Malaysian Palm Oil Council chief executive Tan Sri Dr Yusof Basiron at the close of the 6th International Planters Conference (IPC 2009) held here early this week.

“Right now, one part of the planet consumes and pollutes in its lavish lifestyle, while another part is forced to remain undeveloped and to preserve their forests for future generations,” he adds.

There is constant pressure to preserve the biodiversity and rainforests of the developing countries. However, this is a big burden for nations like Malaysia and Indonesia, which have to balance this with the task of ensuring economic development in their countries.

Yusof says oil palm planters cannot succumb to the NGOs’ demands because palm oil has become an important revenue earner to the developing nations.

“What is so wrong about cutting some of our forests to develop industrial areas, cities and township, and to make way for agriculture and infrastructure, given that we are developing countries?” he asks.

He warns that if planters in Malaysia and Indonesia continue to listen to NGOs such as Greenpeace, Friends of Earth and other anti-palm oil campaigners that oppose development involving deforestation, this will completely hinder the socio-economic development of the poorer nations.

Malaysia only needs 4.5 million ha to produce 20 million tonnes of palm oil, compared with 50 million ha to produce the same amount of soybean oil.

Yusof suggested the formation of a world agricultural and forestry body that will determine how much land each developing country can develop.

Indonesian Palm Oil Board vice-chairman Derom Bangun points out that Indonesian planters face significant challenges in acquiring the stringent Roundtable on Sustainable Palm Oil (RSPO) certification as well as in producing certified sustainable palm oil (CSPO).

Derom says it is tough to convince Indonesian companies that are not members of RSPO or GAPKI (the Indonesian Palm Oil Producers Association). Some 35% of Indonesia’s oil palm plantations belong to smallholders.

For large companies, the decision to move towards CSPO production depends on the size of the gap between the operating conditions of their plantations and mills, and the RSPO procedures and criteria, says Derom. A common problem for Indonesian plantation companies is obtaining the necessary licences and paperwork.

For example, certificates of land-use rights, licences to operate a plantation business and other similar documentation are difficult to produce as the law on regional autonomy is newly promulgated. This has caused confusion.

To date, 48 Indonesian companies have joined RSPO, and three of them have received certification.

Felda Plantations Sdn Bhd senior executive director plantation division Datuk Md Tahir Mohammed and Sime Darby Plantations Sdn Bhd senior vice-president II Syed Mahdhar Syed Hussain concur with Derom, that it is time-consuming to acquire RSPO certification.

Felda is still waiting for its plantation and mills to be certified despite having applied 1½ years ago, says Md Tahir.

“Unlike private sector companies, Felda manage smallholder estates in addition to its own estates. We understand why it will take us longer to get certified,” he adds.

As at this month, Sime Darby has received RSPO certification for five of its mills, with total oil palm area of 11,966ha producing 218,636 tonnes of CSPO, says Syed Mahdhar, adding that the group aims to get full RSPO certification for its remaining plantation operations.

Dr Goh Lian Tiong, head of sustainability for PT Musim Mas, the first Indonesian company to get RSPO certification, says huge investments in terms of money and other resources are ploughed into the RSPO process, but the immediate returns (that is, a premium on CSPO) is not apparent.

He wants the RSPO members, from the palm oil buyers to the processing constituents, to continuously support the RSPO initiative and promote the use of CSPO.