Fact-find­ing mis­sion

Palm oil has been hit by neg­a­tive cam­paigns in the West. Sev­eral mem­bers of the Euro­pean Par­lia­ment visit a Felda plan­ta­tion to get a wider view of the is­sues.

The Star Malaysia - Star2 - - INSIGHT - By NATALIE HENG star2@thes­tar.com.my

THE sin­gu­lar row of corn grow­ing by the side of the road seems a lit­tle out of place. Its tall stems sway in the breeze, as our party of Euro­pean par­lia­men­tar­i­ans dis­em­bark af­ter their two-hour mini­van ride from the ho­tel in Kuala Lumpur. The most strik­ing ob­ser­va­tion upon our ar­rival in Sungkai, Perak, is that res­i­dents of the Fed­eral Land De­vel­op­ment Au­thor­ity’s (Felda) Be­sout 2 set­tle­ment have a pen­chant for gar­den­ing.

Bun­ga­lows lin­ing the oil palm-flanked road lead­ing into the set­tle­ment are dec­o­rated with a va­ri­ety of cheer­ful pot­ted plants. It’s a light­hearted mo­ment in the trip, a chance for the Mem­bers of the Euro­pean Par­lia­ment (MEP) to meet some lo­cal oil palm small­hold­ers.

They are in­tro­duced to 64-year-old farmer Sabran Aini, a first-gen­er­a­tion Felda set­tler who has lived off his 4.1ha es­tate for 32 years. He in­vites them on a tour of his mod­est bungalow. Mean­while, a cou­ple of ladies from the lo­cal women’s group Ger­akan Per­sat­uan Wanita, who helped pre­pare the lunch that is wait­ing for us over at the com­mu­nity hall, hover around his gar­den out­side.

The corn across the road they re­veal, was planted by Sabran. He’s got a trel­lis of pas­sion fruit, and lit­tle buck­ets of or­na­men­tal padi too.

Felda’s ex­cep­tional tal­ent for gar­den­ing, it turns out, can be ex­plained by a com­mu­ni­ty­wide ef­fort to bag the an­nual Felda vil­lage beau­ti­fi­ca­tion award, which comes with a RM1mil grand prize. The Felda set­tle­ments are built on col­lec­tive in­cen­tives such as this.

In to­tal, 112,635 set­tlers farm 397,600ha worth of small­hold­ings, scat­tered across 370 schemes through­out the coun­try. They live in self-con­tained com­mu­ni­ties, with about 300 fam­i­lies shar­ing a school, com­mu­nity hall, clinic, and other gov­ern­ment-pro­vided ameni­ties.

Most im­por­tantly, they re­ceive a share of the wealth ac­crued from the na­tion’s most lu­cra­tive crop – oil palm. Ac­cord­ing to Felda, monthly in­comes av­er­age at around RM3000, through the sales of fresh fruit bunches to the near­est mill (vil­lagers share in trans­porta­tion costs, ben­e­fit­ing from an econ­omy of scale).

The farm­ers’ earn­ings are sup­ple­mented by shares in the farm­ers in­vest­ment co­op­er­a­tive, known as Kop­erasi Per­modalan Felda (KPF).

KPF own shares in Felda Global Ven­tures (FGV), which owns Felda Hold­ings – the largest pro­ducer of crude palm oil in the world.

The av­er­age farmer has about 180,000 shares in­vested in KPF and with an­nual re­turns rang­ing at 12%-15%. That trans­lates into ad­di­tional in­come of about RM22,500.

It may not sound like a huge amount, but it en­sures that it isn’t just big cor­po­ra­tions that profit from palm oil. The lit­tle guys get a cut too and this is the chap­ter in Malaysia’s palm oil story that our host, the Malaysian Palm Oil Coun­cil (MPOC), wanted the MEPs to hear.

The in­for­ma­tion gap

Small­hold­ers cul­ti­vate 40% of the 5.1 mil­lion hectares of oil palm in Malaysia. But its im­por­tance to the liveli­hoods of lo­cal peo­ple is just one, of many sides to a story Euro­pean con­sumers rarely get to hear.

Up un­til about 10 years ago, palm oil re­mained ob­scure to or­di­nary Euro­peans. Then NGOs there be­gan link­ing the crop to de­for­esta­tion and alarm bells be­gan to ring, and since then it’s mainly been bad pub­lic­ity.

This has been both good and bad. On a pos­i­tive note, it pro­vided the im­pe­tus for the in­dus­try to make a shift to­wards sus­tain­abil­ity. The year 2004 saw a for­ma­tion of the Roundtable on Sus­tain­able Palm Oil (RSPO), un­der which a sys­tem for cer­ti­fi­ca­tion was cre­ated.

Its aim was to en­cour­age sus­tain­able prac­tices across the sup­ply chain – fol­low­ing prin­ci­ples and cri­te­ria laid out by its mem­bers. NGOs, re­tail­ers, man­u­fac­tur­ers and other in­dus­try stake hold­ers came to­gether for the first time to work to­wards a com­mon goal. Un­for­tu­nately, 10 years on, the RSPO has not at­tracted the kind of sup­port from con­sumers as ini­tially en­vi­sioned.

Mean­while, the anti-palm oil lobby has grown and the mes­sages to con­sumers have re­mained the same: Palm oil = de­for­esta­tion of pri­mary rain­forests = death of orang-utans.

The web of con­fused in­for­ma­tion fails to recog­nise that a so­lu­tion ex­ists, and needs con­sumer sup­port in or­der to work. But a lot of the cam­paign mes­sages are about boy­cotting palm oil. How­ever far from solv­ing the prob­lem, this only serves to un­der­mine the ef­forts of grow­ers who have in­vested mil­lions into sus­tain­able prac­tices while oth­ers may be dis­cour­aged from go­ing through the ef­forts of cer­ti­fi­ca­tion.

Those who sup­port a boy­cott, fail to grasp the big­ger pic­ture. With global de­mand for edi­ble oils in­creas­ing along­side an ex­pand­ing bio­fu­els mar­ket, palm oil is here to stay. Com­pared to it’s clos­est com­peti­tors, palm oil uses up the least amount the land, whilst ac­count­ing for a dis­pro­por­tion­ately large out­put. Of the 258.18 mil­lion hectares used to har­vest 10 of the world’s ma­jor oilseed crops, palm oil takes up 6%, whilst ac­count­ing for 30% of the world’s edi­ble oils.

Af­ter their re­turn from Sungkai, the four MEPs sat down for a di­a­logue ses­sion with lo­cal in­dus­try stake hold­ers.

Datuk Carl Bek-Nielsen, vice chair­man and ex­ec­u­tive di­rec­tor of United Plan­ta­tions Ber­had, is no stranger to speak­ing his mind when it comes to the RSPO.

His com­pany be­came the world’s first cer­ti­fied pro­ducer of sus­tain­able palm oil by the RSPO in 2008. To­day, cer­ti­fied oils ac­count for about 15% of global sup­plies for crude palm oil.

“It’s ironic that de­spite the push for RSPO cer­ti­fied oils, more than 50% of the world’s RSPO cer­ti­fied palm oil to­day, doesn’t have a home.

“Grow­ers have made a back­wards som­er­sault try­ing to live up to th­ese prin­ci­ples and cri­te­ria, but many of the big re­tail­ers and multi­na­tion­als have since dis­ap­peared out that door like grease light­ning,” he says.

The un­will­ing­ness to pay a small pre­mium on cer­ti­fied oils sends an un­healthy mes­sage to grow­ers, many of whom are be­gin­ning to ques­tion: why they should sub­mit them­selves to strin­gent pay


of MEPs by Emma Krzysztof Me­nen­dez across Sarawak. of­fi­cials, Cus­tom­ary

strin­gent RSPO cri­te­ria when no one is will­ing to pay a small pre­mium for it?

Straight talk

The di­a­logue con­cludes the sec­ond last day of a week-long tour aimed at fur­nish­ing the MEPs with a bet­ter idea of the nu­ances sur­round­ing the great palm oil de­bate. Or­gan­ised by the MPOC, par­tic­i­pants Julie Gir­ling and Emma McClarkin from the United King­dom, Krzysztof Lisek from Poland and Emilio Me­nen­dez Del Valle from Spain, were taken across the South China Sea to Sabah and Sarawak.

There, they met lo­cal for­est and wildlife of­fi­cials, en­vi­ron­men­tal NGOs and Na­tive Cus­tom­ary Rights (NCR) landown­ers farm­ing un­der the Sarawak Land Con­sol­i­da­tion and Re­ha­bil­i­ta­tion Au­thor­ity (SAL­CRA).

The MEPs and lo­cal stake hold­ers seem to be in agree­ment about one thing: most con­sumers in Europe are not well-in­formed.

“The av­er­age man on the street isn’t go­ing to know the ins and outs of the ar­gu­ment,” McClarkin had said to me in a con­ver­sa­tion ear­lier.

“Peo­ple need to know they are not go­ing to stop palm oil from hap­pen­ing. Per­haps what we should in­stead be ask­ing for, is to see the best agri­cul­tural prac­tices in place.”

The rec­om­men­da­tions the MEPs came up with were about find­ing a way to pro­vide a big­ger pic­ture to the con­sumer.

“A lot of peo­ple just think that oil palm plan­ta­tions are big bad cor­po­ra­tions. The story of the small­hold­ers needs to be told bet­ter. So does the story of sus­tain­able cer­ti­fi­ca­tion. Con­sumers need to un­der­stand it in or­der to value and be will­ing to pay more for it,” says McClarkin.

MPOC chair­man Datuk Lee Yeow Chor how­ever, notes that as an out­sider, there are cer­tain con­straints – such as that of per­ceived cred­i­bil­ity. He raises the point of there be­ing a cor­re­spond­ing obli­ga­tion on the part of man­u­fac­tur­ers, re­tail­ers and even NGOs (who are also mem­bers of the RSPO) to cer­ti­fied grow­ers and mills, to help pro­mote the use of sus­tain­able palm oil.

“Un­for­tu­nately in­stead of pro­mot­ing it, they ei­ther keep silent when some­thing neg­a­tive comes up, or join the band­wagon in cast­ing neg­a­tive as­per­sions on palm oil,” he says.

It’s a poignant point. In some cases, even man­u­fac­tur­ers who do source sus­tain­able oils, are weary of mak­ing this known. In the past, United Plan­ta­tions Ber­had have com­mented that this is why buyer in­for­ma­tion is kept con­fi­den­tial. There is a fear that re­gard­less of whether a com­pany is us­ing cer­ti­fied oils or not, con­sumers may end up tar­nish­ing all palm oil with the same brush.

In this sense, a po­lar­i­sa­tion in cam­paign strate­gies seems to be coun­ter­pro­duc­tive. On the one hand, most sea­soned NGOs, Green­peace and WWF for ex­am­ple, have over the years come to fo­cus ef­forts on push­ing for sus­tain­able palm oil.

How­ever there are many smaller cam­paigns call­ing for an out­right boy­cott. And man­u­fac­tur­ers are re­spond­ing, the Fair­trade choco­late com­pany Di­vine, and Lush Cos­met­ics for ex­am­ple, an­nounced they are cut­ting the oil out al­to­gether. This is in turn harm­ing ef­forts to get the whole sup­ply chain to unite in pro­mot­ing the their use of sus­tain­able palm oil, along with any ef­forts to en­cour­age peo­ple to stand up and be “palm oil proud”.

Gir­ling thinks many man­u­fac­tur­ers are stuck be­tween a rock and a hard place.

“They don’t want to pro­mote sus­tain­able palm oil, be­cause no­body has no­ticed they are us­ing palm oil.

“And if no­body has ac­tu­ally attacked you for us­ing palm oil be­fore, it’s quite a tough call to ac­tu­ally draw at­ten­tion to your­self,” she says.

Un­for­tu­nately, some­times when op­po­si­tion comes call­ing, the eas­i­est thing to do is of­ten to just take the prod­uct off the shelf, she says.

Change: one pop at a time

Gir­ling, be­ing a mem­ber of the En­vi­ron­ment, Pub­lic Health and Food Safety Com­mit­tee of the Euro­pean Par­lia­ment is fa­mil­iar with the is­sues. She has worked ex­ten­sively on is­sues of food in­for­ma­tion for con­sumers in Europe, where there has been quite a strong lobby to have palm oil listed on food la­bels.

“But in­stead of try­ing to fight the fact that peo­ple are ask­ing for palm oil to be iden­ti­fied, why not join that lobby ... and ask for sus­tain­able palm oil to be in­cluded in the la­belling,” she says.

Not ev­ery­one seems con­vinced that such a strat­egy would work how­ever. Bek-Nielsen says that right now there is a lot of emo­tional rhetoric, ver­sus in­formed de­ci­sions. Such are the chal­lenges of the in­dus­try, es­pe­cially in an era of so­cial me­dia where con­sumer pres­sure is a for­mi­da­ble weapon for cam­paign­ers. How­ever, this has also ush­ered in the dawn of bite-sized in­for­ma­tion and most lay peo­ple don’t have the time or in­cli­na­tion to re­search com­plex is­sues.

Dra­matic head­lines be­come opin­ion for­m­ers and quick fixes – like boy­cotts – give im­me­di­ate grat­i­fi­ca­tion.

Yet, de­mand for palm oil is in­creas­ing. The big­gest mar­kets for Crude Palm Oil are China, In­dia, Pak­istan and Bangladesh – none of which show the same sort of Euro­pean con­cern about sus­tain­ably cer­ti­fied palm oil.

There are many crit­i­cisms of the RSPO, too. In par­tic­u­lar, how to en­force its prin­ci­ples and cri­te­ria on mem­bers. But as its sup­port­ers say, Rome was not built in a day.

“In this dig­i­tal world, we want things to take place right now, right here, prefer­ably yes­ter­day. But try­ing to in­stil this kind of change in the agri­cul­tural in­dus­try is like sit­ting on the back of an air­craft car­rier and try­ing to move it around with a set of flip­pers,” says BekNielsen.

He thinks Malaysia is com­mit­ted to pro­duc­ing sus­tain­able palm oil.

“We haven’t got ev­ery­one on board, and if you heat up a bowl of pop­corn, it will take a bit of en­ergy be­fore they all start go­ing pop,” he ex­plains.

“But even­tu­ally they will, start go­ing pop pop pop. And there will al­ways be a few corns that never go pop. But as long as the ma­jor­ity moves in that di­rec­tion, we are work­ing to­wards a pos­i­tive change.

“One way or another, this has to be recog­nised.”

Tak­ing a closer look: meP emma mcclarkin gets a closer

meP Gir­ling ob­serv­ing an es­tate worker gath­er­ing fresh fruit bunches.


(From left) meP Krzysztof Lisek from Poland, malaysian am­bas­sador to brus­sels datuk Zain­ud­din yahya, and mePs Julie Gir­ling and emma mcclarkin from bri­tain, dur­ing a visit to Felda’s be­sout 6.

Felda set­tler Sa­maayah da­ha­lan, 61, takes mePs emma mcclarkin (left) and Gir­ling on a tour of her house, in be­sout 2.

The mePs get­ting a brief­ing dur­ing a visit to the be­sout Felda scheme.

a closer look at ac­tual oil palm fruits while vis­it­ing the Felda be­sout 6 plan­ta­tion in Sungkai, Perak.

euro­pean mem­ber of Par­lia­ment emilio me­nen­dez del Valle from Spain speak­ing dur­ing a di­a­logue ses­sion or­gan­ised by the malaysian Palm Oil coun­cil for mePs to get a big­ger pic­ture of palm oil is­sues.

Felda se­nior ex­ec­u­tive aman Shah al­ladin and meP Krzysztof Lisek from Poland vis­it­ing Felda’s be­sout 6.

Felda deputy di­rec­tor gen­eral haji ab­dul Ghani mohd ali briefed euro­pean mem­bers of Par­lia­ment on Felda’s com­mu­nity de­vel­op­ment ini­tia­tives.

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