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Sarawak will not bow to boycott threats

Kuching: (Bernama) Singapore-based Wilmar International Ltd, which has its refinery in Bintulu, has informed Sarawak government that it would stop buying palm oil harvested from oil palm trees planted in logged-over areas and peat swamp land in the state from next year. 

Sarawak Land Development Minister Tan Sri Dr James Jemut Masing said Wilmar made known its decision in a letter, on 5th December 2013, when it signed a “No Deforestation, No Peat, No Exploitation” pledge in its palm oil trades with food giant Unilever plc.

Masing said he had replied to the letter and briefed the state cabinet on the matter, adding that the state government would not bow to such undue pressure from the company.

“If there is a stop in planting of oil palms in logged-over area and peat swamp, it will definitely affect the state’s revenue, the 17,578 smallholders as well as some 300,000 people in rural areas who are involved in oil palm planting. 

Wilmar, which set up the first palm oil refinery in the state more than 10 years ago, buys 55 per cent of the CPO produced by 41 mills in the state.

The other 45 per cent are sold to the Assar Senari refinery in Kuching and three other refineries.

Masing said there are only two main areas in Sarawak where oil palms are planted; namely in logged-over area and peat swamp soil.

“If we are not allowed to plant in those two areas, then there will be no oil palms planted in Sarawak. We have no areas where there are no forest… if you want to plant oil palm where there is no forest, you will have to go to the Sahara Desert because there is no forest there,” he quipped.

Sarawak has 1.6 million hectares of peat swamp and a wide expanse of that area had been planted with oil palms. “This directive from Wilmar has a very disastrous effect on us because it will stop our rural poverty eradication programme.

“I believe the company has been pressured by non-governmental organisations in Europe to make such a restriction on the state’s oil palm planting programmes. They use environment impact argument but it is actually an economic argument.

“They told us not to sacrifice our environment with the planting of oil palms in our forest and peat swamp soil. I don’t agree to that because there are no soya beans and sunflowers planted in the Sahara desert. Soya beans and sunflowers are planted all over Europe and their forest areas are also cut down,” Masing said.

He said the European communities are jealous because the production of oil from oil palm is 10 times better than soya beans, rapeseed and sunflower.

“I do not agree with their argument that planting oil palm in logged-over areas and peat swamps is bad for the environment. We follow a set of proven good agricultural practices that balances the needs of people, planet and profits. The state government will not succumb to baseless allegations.

“Our method of improving the lot of the people in our state is not up to negotiations with the international community. We will continue to find ways to improve our people’s livelihood,” Masing said, adding the state government is very cautious on how it protects the environment. “We already have our own experts to do the job.”

“Nobody can stop oil palm and rubber planting in the state as this is where part of the state revenue comes from. At the same time, oil palm and rubber planting is key in helping rural poverty eradication.

In 2012, sales tax from oil palm was RM425 million, which is 10.8 per cent of the state’s total revenue, while sales tax for between 2002 and June 2013 was RM2.16 billion,” Masing said. 

He said the crop contributed RM300 million in income to smallholders in the state, adding that every smallholder earns RM3,328 per hectare a year. So far, a total of 90,607.30ha are planted with oil palm by smallholders in the state.

“If we stop the smallholders from planting oil palm, it will affect their livelihoods. No, we cannot bow to this pressure. We must stand by the fact that oil palm cultivation has improved the social economic life of Sarawak rural populace,” he stressed.

On prospects of palm oil exports, the state government will find other buyers from emerging markets, including from China and India, if Wilmar is firm on its decision, he added. 

  1. Dr Yusof Basiron tweets
    February 17, 2014 at 9:21 am

    If Sarawak were to plant oil palm on 500,000 hectares of shallow peat it will not cause global warming, offset by its 9 million hectares of permanent forest. Once land is zoned for agriculture it must be developed by planting crops or rearing of animals. Biodiversity and carbon stock are non-issues.

    Definition of agricultural sustainability needs to be agreed through UN mediated standard. ENGOs definition tends to be anti development. Agriculture is needed to sustain food and commodities production. Forest land is sacrificed but govt land use policy provides the balance. Peat is a national asset like coal and petroleum. In Holland, the peat has been burned for fuel but planting on it prolongs its lifetime.

    When plantation companies want to develop land to plant oil palm they must consult the local community to get their prior informed consent. When Unilever and Wilmar signed a palm oil supply manifesto no consultations with suppliers in Sarawak were done. Farmers can't sell their oil. Affected farmers who are prevented from selling their oil to their usual buyer Wilmar because of the manifesto should sue for compensation.

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