Masing: Wilmar's policy will have serious adverse implications on Sarawak

By Simon Peter

KUCHING, May 15, 2014: Wilmar International Limited's new policy on palm oil industry will have a very serious adverse socio-economic implications on Sarawak, Land Development Minister James Masing told the State Legislative Assembly today.

Wilmar, Asia's leading agribusiness group headquartered in Singapore, launched the  "No Deforestation, No Peat, No Exploitation" policy in December, claiming to advance an environmentally and socially responsible palm oil industry.

It controls about 45 % of the global palm oil trade, hence the reason for Sarawak to be worried about.

"We have to take serious views of all the anti-palm oil smear campaigns, especially Wilmar’s new policy because these will have very adverse socio-economic implications to Sarawak," Masing said.

The policy, which means no new planting or replanting on deforested area and on peat land, could jeopardise the state government's target of two million hectares of oil palm by the year 2020.

Oil palm cultivation in Sarawak is being undertaken on logged over state land designated for agriculture and the underutilized/idle Native Customary Rights (NCR) land.

Stopping future development on NCR land, which have been idle and thus depriving earning potentials for the natives as more than half a million hectares have been approved for development.

Up to 31 December 2013 about One Hundred and Thirty Thousand (130,000) hectares of NCR land belonging to 37,674 landowners have been developed under the organised smallholders approach.

These organised smallholders have received monetary payments, totalling RM753.5 million.

Loss of household incomes among the estimated 18,000 independent smallholders. These independent smallholders, who depend entirely on the returns from their small plots of oil palm, have cultivated over 90,000 hectares as at Dec 31, 2013. 

In a dialogue with Wilmar that the Land Ministry organised, Wilmar indicated that development on NCR land will not be affected by its policy. 

"Until now, I have not received any official confirmation from Wilmar on this," Masing said.       

Potential loss of revenue to the State from sales tax, which averages Ringgit Malaysia Three Hundred Ninety point Three (RM390.3) million annually and constitutes an average of 9.4 percent of the total State revenue over the past 3 years.

Loss of jobs and thus income among the 20,000 Sarawakians who are gainfully employed in the palm oil industry in Sarawak, thereby adversely affecting the State poverty eradication programme.

Masing said that the fact that oil palm stands as the most viable crop for the state's agro-climatic conditions, the palm oil industry is here to stay.

"Thus, although the Government encourages the expansion of the industry, all the industry players must adopt in their operations Good Agriculture Practices for oil palm, Best Management Practices for peatland, and comply diligently with all the laws and rules and regulations that have been formulated by the authorities to guide and regulate the industry.

" All these would leave no room for baseless allegations by the anti-palm oil lobbyists and NGOs.  And as there could very well be more ‘Wilmars’ out there,  I urge all government agencies involved with the industry, the private sector across the palm oil value chain as well as the smallholders to stand united and work closely together against all form of smear campaigns labelled at the industry.

"We must all realize that if the locals aggravate the international community smear campaigns this will frighten off investors.

"In fact, Wilmar’s new policy has frightened at least two investors from taking up the development of NCR land development projects allocated to them," he added.