Covid-19 remembered: Planters defining moments
MARCH 2020 marks a poignant milestone in our collective memory – the somber anniversary of the Covid-19 pandemic that swept across the globe, leaving devastation in its wake. On 18 March 2020, Malaysia imposed a nationwide Movement Control Order (MCO) due to a surge in Covid-19 cases.
Lockdown restrictions were gradually eased, leading to the Conditional Movement Control Order (CMCO) in May and the Recovery Movement Control Order (RMCO) in June. However, the Sabah state election and outbreaks at factory facilities in late 2020 triggered a third wave, prompting CMCO restrictions. By January 2021, MCO was reinstated nationwide, alongside a state of emergency until August. Restrictions lifted in March 2021 but reinstated in April due to rising cases, leading to a nationwide MCO in May and a total lockdown from June due to the Delta variant. Vaccination efforts led to plans to transition to endemic status by October 2021. However, a fifth wave in 2022, fuelled by the Omicron variant, led to record daily cases, although hospitalisations and deaths were lower.
As of March 2022, the Omicron subvariant was projected as the dominant strain. The country’s vaccination programme, which commenced in late February 2021 inoculated over 80% of the population and 97% of adults as of 24 April 2022.
While the sacrifices of the frontline warriors remain paramount in our hearts and minds, it is also vital to recall the pivotal role played by the oil palm sector in upholding global food security, sustaining employment opportunities and nurturing public health. Many may not be aware of the advocacy lobby for the oil palm sector to be placed as essential economic sector and forgotten about the shutdown of the oil palm sector in Sabah and the calamity after Sabah State Election.
There were key advocates for business continuity for the oil palm sector, then-Datuk Nageeb Wahab from MPOA, Jeffery Ong and the undersigned from MEOA reflect on their pivotal roles collectively with the plantation fraternity in ensuring the continuity of the palm oil supply chain while navigating stringent safety protocols.
Diving into the latest Maybank Investment Bank’s Plantation Report by Ong Chee Ting entitled “ESG on MY Plantations: The ESG-friendly side that is often overlooked”, it paid tribute to the plantation sector’s enormous contributions during the tumultuous times of the Covid-19 pandemic, serving as a moving reminder of the sectorial resilience that defined our nation’s spirit in the face of hardship.
Despite grappling with soaring costs and dwindling productivity, the plantation sector emerged as a stalwart pillar of strength, funnelling over RM23 billion into government coffers through various forms of taxes and levies, and generated other multiplying and spin-off contributions. Between 2020 and 2023, the plantation sector has contributed approximately RM6.1 billion in windfall profit levy, RM3.7 billion in export duties, RM1.3 billion in MPOB cess, RM0.2 billion in Prosperity Taxes, >RM6 billion in Sabah and Sarawak sales taxes and easily another >RM6 billion in corporate income taxes and individual taxes by the smallersized planters to the government coffers.
The sector is said to be among the highest tax contributor in terms of total taxes to government coffers. Monies collected by the government served as the lifeblood of our nation’s including contribution to free vaccinations and cash handouts during the pandemic.
Palm oil which reigns supreme with over 50% of the global vegetable oils trade, stood as a bastion of stability amid Covid-19. With all the bad news surrounding palm oil, many are not aware of the role of palm oil during the pandemic especially the often-overlooked by-product, palm kernel oil (PKO), which was quietly playing a pivotal role in the fight against the pandemic. With its indispensable role in the production of personal care, sanitising and cleaning products, PKO proved that palm oil was not just a commodity but a lifeline during humanity’s darkest hour. It was sort of a Cinderella product; nobody really notices it.
Amid the widespread economic devastation caused by the Covid19 pandemic, the plantation sector emerged as a pillar of stability and support. Within the secure confines of their workplace, workers found safety and assurance, benefiting from free Covid testing and vaccinations, as well as a reliable source of income. Despite border closures and uncertainties, foreign workers remained dedicated to their duties, earning wages that sustained their families back home amid the global crisis.
The advocates experienced defining moments during the pandemic, marked by sleepless nights and frantic calls amid uncertainties. Initially excluded from essential sectors, the plantation industry faced a oneday shutdown on 18 March 2020, threatening millions of livelihoods and the nation’s palm oil supply. Through relentless engagements, they successfully lobbied for reclassification, ensuring uninterrupted operations.
Desperate for intervention, they appealed to the Prime Minister, stressing the industry’s vital role, safety measures and ability to operate amid the pandemic. Their efforts led to a conditional exemption, allowing operations to resume on 19 March 2020. Over the next two years, they navigated uncharted territory, engaging stakeholders, dispelling misconceptions and also lobbied planters to provide support to hospitals and communities.
Despite overcoming initial challenges, the industry faced a critical setback when the Sabah government announced a shutdown of the oil palm supply chain on 24 March 2020. This decision posed a significant threat to plantation operations in the state, prompting advocates to mobilise their networks, media and engage with state officials to highlight the industry’s essential role in Sabah’s economy.
However, the situation worsened following the Sabah State Election, which became known as Malaysia’s pandemic election. Campaign activities led to a surge in Covid-19 cases due to lax compliance with safety protocols, not only within Sabah but also across Malaysia.
In response to the pandemic, industry associations joined forces to issue united statements, emphasising their commitment to enforcing rigorous safety measures across the palm oil supply chain during the MCO. A significant achievement was reached as planters proactively developed comprehensive Covid19 standard operating procedures (SOPs) with notable contributions from entities like MEOA and IJM Plantations prepared by its members and staff. These sector-specific SOPs were tailored to address the unique challenges of the palm oil supply chain, serving as a blueprint for safety protocols not only in Malaysia but also shared globally through the Council of Palm Oil Producing Countries (CPOPC) to Indonesia and Costa Rica. The overarching goal was to advocate for the uninterrupted continuation of plantation operations under strict safety measures.
Covid-19 and oil palm in Sabah Despite the eventual classification of plantations as an essential economic sector by the Federal government, the oil palm industry encountered a critical juncture when the Sabah state government announced a bold shutdown of the oil palm supply chain.
Initially impacting plantations in three districts, the shutdown expanded to six districts. While the State government aimed to protect public health and curb the spread of the virus, the decision led to a cascade of obstacles and issues amid the MCO on the oil palm sector. With the affected districts encompassing 65% of Sabah’s total planted hectares and contributing 75% of the state’s overall production, the economic implications were profound.
Additionally, the closure directly jeopardised the livelihoods of some 100,000 plantation workers, exacerbating economic uncertainty. The situation escalated as conflicting interpretations of MCOs and a lack of understanding of plantation operations by local authorities fuelling confusion on the ground.
In the face of mounting calls for shutdowns, advocates emphasised the unique nature of the plantation sector compared to conventional industries. Unlike factories and urban enterprises, plantations interact with living biological produce across vast expanses of land, subject to the unpredictable forces of nature. Shutting down plantations would not only result in irreversible losses of oil palm crops and income but also present the challenge of managing perishable biological produce.
The industry’s plea extended beyond self-preservation, highlighting the distinct challenges of their trade and advocating for the continuation of operations under stringent safety. While prioritising public health, they underscored the irreplaceable impact on the livelihoods and sustenance of thousands of plantation workers and their families. On 10 April 2020, a collective sigh of relief swept through the palm oil industry as appeals and engagements bore fruit.
The State government, heeding these efforts, granted permission for the resumption of plantation operations, albeit under stringent conditions mandated by the state.
However, the saga continued as Sabah faced escalating challenges. On 17 April 2020, state orders to shut down jetties aimed at controlling crossborder movements inadvertently affected private jetties crucial for palm product transportation. This decision, stemming from ambiguous directives, disrupted downstream operations, impacting refineries and crushing plants. Despite being non-entry points, private jetties faced closure, leading to a significant reduction in raw materials.
Planters rallied to appeal for the resumption of private jetty operations, highlighting their pivotal role in the supply chain. Eventually, authorities relented, allowing operations to resume. However, the ordeal highlighted the slow decision-making process and lack of understanding of the palm oil sector’s interconnected supply chain.
Concurrently, the entire Malaysian palm oil sector found itself confronted with an additional challenge as it endeavoured to meet the environmental regulations imposed by the Department of Environment (DOE). Amid the backdrop of the MCO, the sector faced looming deadlines for the implementation of air pollution control measures in palm oil mills, as well as limits on 3-MCPDE levels which included washing of CPO in palm oil mills as mandated by the MPOB licensing conditions. In the situation, the mills faced the complexities posed by the MCO with the inability for overseas technicians and experts not allowed to leave their country of origin nor enter Malaysia, coupled with the near impossible task to import essential equipment.
In June 2020, the palm oil industry faced a setback when the Human Resources Ministry announced a freeze on new foreign worker intake, including in plantations. Advocates spearheaded appeals for exemption, urging the return of existing foreign workers and prioritising Malaysians for job vacancies.
Plantation companies launched recruitment drives amid the economic downturn, but the response from locals was lukewarm due to perceptions of 3D plantation work and the absence of mechanisation solutions for critical tasks. The industry struggled with labour shortages and local reluctance to fill the void, presenting ongoing challenges exacerbated by the pandemic’s economic impact.
Amid ongoing challenges, the government announced stringent SOPs impacting businesses, including mandates for operating at 50% workforce capacity and limited working hours. In Sabah, oil palm planters faced significant revenue losses estimated at RM900 million monthly, excluding palm kernel revenues. Advocates appealed for exemptions, citing existing reduced workforce numbers in estates and shift-based operations in mills, which made compliance with the SOPs a non-issue to start with.
Covid assistance from planters During the pandemic, planters spearheaded proactive CSR initiatives to address pressing needs.
MPOA established a Covid-19 Fund, collecting RM5 million from its members. These funds were vital in procuring essential medical equipment such as ventilators and test kits for hospitals in Peninsular Malaysia. Meanwhile, MEOA utilised its Covid Fund to provide medical supplies to hospitals in Sabah.
Overcoming logistical challenges posed by limited flights and empty airports, they coordinated with other mercy flights to transport the medical supplies to healthcare facilities in Sabah grappling with the pandemic.
As vaccination efforts gained momentum in March 2021, oil palm planters also played a pivotal role.
In Peninsular Malaysia, the MPIC-MPOA Vaccination Programme was inaugurated at Ladang Tannamaram. Meanwhile, in Sarawak, SOPPOA and Sime Darby Plantation, joined forces with the Sarawak Disaster Management Committee (SDMC) to establish the state’s first publicprivate partnership industrial vaccination centers (PPVIN) in Rajawali Estate, Bintulu, which subsequent expanded throughout Sarawak.
MEOA collaborated with an NGO, Earth Heir which works with artisans from women’s cooperatives, indigenous tribes and refugee groups to produce medical PPE equipment for their contribution to a number of hospitals. In Sabah, MEOA funded Sandakan’s third vaccination center (PPV) in Libaran, with essential equipment such as computers and handphones.
In addressing vaccination challenges for migrants and their dependants in rural Sabah, innovative solutions were urgently sought. In an IJM retreat site known as Hundred Acre Wood in Sugut, vaccination discussion led to the agreement between planters and health authorities to establish PPVs in estates, beginning with IJM Plantations in Sandakan. The retreat site offered fatigue frontliners the opportunity to have well-deserved rest after their daily vaccination works and to enjoy the bountiful seasonal durian fruit in production.
The plantation sector’s comprehensive support, including cold storage facilities, logistics and medical personnel assistance, ensured a successful partnership and extended benefits to surrounding rural communities. Thereafter, more PPVs in estates were established. By September 2021, follow-up vaccination initiatives were extended to youths aged 12-17 further bolstering efforts to achieve herd immunity.
The success of mobile vaccination units and in situ PPVs served as a model for expanding vaccination coverage across Sabah, ensuring safe bubbles within plantation and mitigating risks associated with the workers and villagers going to the urban vaccination centers.
17. By 2022, operations were gradually back to normal amid acute shortage of foreign workers and plantations struggling with their prolonged harvesting rounds. The shortage of 63,000 foreign workers in the oil palm sector severely affected yield and saw Malaysia lose out on an estimated RM20 billion in revenue in 2022.
According to reports, as of 10 February 2023, Malaysia has recorded over five million confirmed Covid-19 cases, a high of approximately 323,000 active cases, nearly 40,000 deaths and over 66 million tests. Throughout the pandemic, industry advocates and planters collaborated closely to navigate legal boundaries and implement innovative solutions, ensuring the survival of the oil palm sector until successful vaccination efforts were achieved.
This collective action involved coordination with government agencies including MPOB, health authorities, and industry bodies to establish protocols for social distancing, sanitation, testing, and vaccination. These efforts underscored the power of solidarity and effective engagement during times of crisis. Amid the challenges, valuable lessons in crisis management, resilience and sector-wide solidarity were learned, providing guiding principles for the future. Looking back on Covid-19, it is our fervent hope that such pandemics will never again darken our doorsteps. Lest we forget.
Acknowledgement: The palm oil supply chain SOP for Covid19 from MEOA for estates also adopted by plantation industries in Columbia, Thailand and Indonesia were developed by Leslie Ong, Aloysius Jubilee Intan, Stephanie Jenie Endang, Mitah Limpu and IJM Plantation for the processing by Lee Hock Leang, Chan Chua Wui and Glenda Pang.