Sarawak rejects trade barriers

BY OOI TEE CHING – 17 OCTOBER 2015 @ 11:00 AM

THE Malaysian Palm Oil Board data showed that Sarawak produced 3.4 million tonnes of crude palm oil (CPO) last year. This year, with more trees maturing, the state is expected to achieve 3.5 million tonnes.

In December 2013, Wilmar International Ltd signed a “No Deforestation, No Peat, No Exploitation” pledge in its palm oil trade with consumer goods giant Unilever Plc.

Wilmar’s refinery in Bintulu, Sarawak, was the main buyer from 41 palm oil mills across the state, absorbing 1.7 million tonnes of CPO, or half of the state’s production.

In sourcing CPO to feed its refinery, the Wilmar-Unilever pledge dictated to planters in Sarawak that starting January, it will stop buying oil from estates where there are allegations of land grabbing from natives.

The pledge will also lead to a halt in the sourcing of palm oil from farmers who have planted their trees in areas of “high carbon stock” and peat swamp.

In an interview at his longhouse in Silas Estate near Bintulu, village head Meikle Ding spoke about his people’s sentiment.

When asked if the native customary rights (NCR) landowners had seen any tangible benefits from the Wilmar-Unilever pledge, Meikle replied: “It looks protective of us natives, but in reality our genuine business partner is Ta Ann Plantation.”

He said Ta Ann, as the 60 per cent shareholder in Silas Estate, had taken considerable risk in coming up with up-front capital to lay in infrastructure to plant oil palms.

From the start of planting, even before the trees have started to bear fruit, it had given incentive payments to landowners.

“What our business partner promised, it delivered. Ta Ann has shown commitment to this long-term partnership. Throughout the years, we have received tangible benefits, we have received our dividends,” he said.

“Our land is now a lot more valuable compared with the time when it was left idle. Since 2010, the state government has been carrying out perimeter and individual lot surveys. Pending this initiative, our joint-venture partner has issued letters of confirmation to all NCR landowners in the state. We are assured of land ownership,” he said. “As rural folks, we are simple people, but we’re certainly not simple-minded.

Many of our children are working as doctors, lawyers and high-ranking diplomats serving the government in overseas missions. When asked to comment on anti-palm oil campaigns run by green activists, Meikle explained that natives were landowners as well as shareholders in the business of oil palm planting.

“When our 60 per cent business partner is unfairly hurt by false allegations of exploitation, we, as 30 per cent partners in this business, suffer as well.

Throughout the years, we know who are our genuine friends and who are looking to take advantage of us,” he said. Just like the soyabean and rapeseed farmers in Western countries, Meikle said his people were equally deserving of their right to sell their palm oil without trade hindrance. He noted that his people felt Wilmar and Unilever’s pledge was restrictive of Sarawak’s freedom to export to an open market.

“The Wilmar-Unilever pledge dictating to planters in Sarawak to comply with it by the end of the year is discriminatory. We prefer a meaningful pledge that states “Yes” to high palm oil prices, “Yes” to our right to prosperity and “Yes” to business growth,” he added.

Meikle also questioned whether the Asia-Pacific Economic Cooperation (Apec) and Trans-Pacific Partnership (TPP) agreements would address discriminatory and oppressive business dictates from buyers like Wilmar and Unilever.

His query has struck a poignant chord on global edible oils trade politics. Earlier this week, Indonesia and Malaysia agreed to harmonise and combine palm oil certification standards. Indonesia’s Chief Natural Resources Minister Rizal Ramli told the Parliament that it was time for Indonesia and Malaysia to fight and regain sovereignty on their own turf.

“We are the biggest palm oil producers. Why should consumers from developed countries set the standards for us?” he asked.

Indonesia and Malaysia, which account for 85 per cent of the world’s total palm oil output, have since August last year been discussing a plan to set up an inter-governmental organisation called the Council of Palm Oil Producer Countries (CPOPC).

The move came after major palm oil firms in Indonesia and Malaysia signed the Indonesian Palm Oil Pledge and Sustainable Palm Oil Manifesto. Rizal said the pledge protected the interests of developed countries’ vegetable oil markets, adding that CPOPC would instead set a standard that take the welfare of smallholders into account.

In a separate interview, Sarawak’s Land Development Minister Tan Sri James Masing welcomed the move by Malaysia in joining hands with Indonesia to tackle non-tariff trade barriers that are increasingly disguised as environmental protection or concerns for human right.

Masing likened the Wilmar-Unilever pledge’s unreasonable prohibitions on its palm oil suppliers to economic bullying. “The Wilmar-Unilever pledge is very disastrous because it could stop the government’s poverty eradication programmes.”

The Wilmar-Unilever pledge prohibits cultivation of oil palm on peat land and confines the opening up of oil palm plantations to only young scrub and cleared/open areas.

“The state government will not succumb to baseless allegations. We do not agree with the argument that planting oil palms in logged-over areas and peat swamps is bad for the environment,” he said, adding that good peat soil management was the basis for sustainable food production and was a preventive measure against the spread of fire. “We need to differentiate between managed and unmanaged peat,” he said.

He explained that land compaction and establishment of a trench system was a prerequisite to any oil palm development in Sarawak’s peatlands. A lot of efforts go into ensuring water levels in the maze of trenches are at 50cm to 75cm from the surface.

This is achieved through a series of stops, weirs and water gates. “Oil palm planters in Sarawak follow a set of proven, good agricultural practices that balance the needs of the people, planet and profits,” he said.

In a separate interview, community leader Enyang Menchol, 55, who represents some 2,000 households in Kanowit, testified that his people rejected the Wilmar-Unilever “No Deforestation, No Peat, No Exploitation” pledge.

“We do not agree with the Wilmar-Unilever directive. We were not consulted; we were just told it will take place. After discussion with others we find that it hinders my people from making productive use of their idle land,” said Enyang.

When asked to elaborate on the “No Exploitation” aspect of the Wilmar-Unilever pledge, the community leader noted that there were land disputes and natives had the option of going to the courts for resolution. He also said many years ago, rumours were rife that some people fell victim to broken promises and were cheated of their land.

Enyang said he and his family finally decided to partner with the Teamplete Group in developing his plots. “After a few years, many more neighbouring lots joined in when they saw how oil palm planting is a profitable and honest business venture that will sustain for generations to come,” he said.

Since joint-venture companies have started to pay yearly incentives, many more NCR landowners are now signing up with the Teamplete Group. Teamplete Group executive director Lawrence Leow confirmed that oil palm development necessitated identification of land boundary and this had helped settle arguments and disputes over ownerships.

NCR landowners’ participation in commercial oil palm planting is voluntary as Leow’s team has been actively engaging in dialogue sessions on the risks and prospects of the business. “As business partners, we trust and respect each other. Teamplete Group has been paying out yearly incentives to NCR landowners via e-banking.

This is to ensure the exact amount is paid to the correct landowner,” he added.

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