Plugging the palm oil leak

Malaysia plans to step up enforcement against oil palm seed scams and theft of palm fruits and oil, which are costing the country billions in lost revenues.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok has told the Malaysian Palm Oil Board (MPOB) to buck up as these crimes have been going on for a long time.

"I want MPOB to step up enforcement immediately. All these oil palm seed scams and oil thefts must stop," he told Business Times in a recent interview in Putrajaya.

For a start, Dompok gave the green light to MPOB to licence palm oil transporters. This is allowed under the Malaysian Palm Oil Board Act 1998. "I want to tighten up the loopholes. The transporters need to be licensed and we'll put in place a whistle-blowing scheme. Once MPOB board of directors give their consensus, it will come back to me for my signature and then we'll have it gazetted," Dompok said.

The companies will also have to install global positioning systems on their tankers to keep tabs of their movements. "Transporters must take responsibility for the actions of their drivers and pay the price if their tankers are involved in illegal activities," he said.

Under MPOB (Quality) Regulations 2005, whoever steals or contaminates crude palm oil can be fined up to RM250,000 or two years' jail or both.

In a separate interview, Palm Oil Refiners Association of Malaysia (Poram) acting chairman Yong Chin Fatt said refiners have suffered much from oil pilferage. Refiners have no way of knowing whether the palm oil brought in by tankers are stolen or not.

"We're all established and we only accept oil that come in tankers, not in drums. These tankers come with the necessary documentation from the millers," he said. "In fact, we incur additional costs when we're duped into buying contaminated cargo. We suspect such highly-organised crimes, that have spread to Sabah and Sarawak, are by syndicates. We appeal for more stringent enforcement," he added.

Dompok has also told MPOB to be more vigilant in stamping out oil palm seed scams. "These scams have serious implications on the livelihood of thousands of smallholders and the country's average oil palm yield," he said.

It was recently reported that there are syndicates deceiving planters into buying low-yielding seeds that are not dura and psifera (DXP) crossbreds currently sold by the 19 genuine producers.

Last year, MPOB managed to seize 6.13 million fake DXP seeds and this amounted to RM11.35 million in opportunity loss for genuine producers. However, the potential revenue loss to oil palm planters runs into the billions in the long term as the fake seeds will not produce as much fruits.

Malaysia's oil palms are the most productive in the world because of government policy to use high-yielding crossbred seeds of the mother palms of the DXP strains. Regular seeds from existing oil palm trees will only yield five to 10 tonnes of fresh fruit bunches in a year compared with 25 tonnes for DXP seeds. Cross breeding of high-yielding DXP seeds takes time and the seeds are sold for RM2 each.

3 Responses to Plugging the palm oil leak

  1. plam oil outsider 12 June 2009 at 16:38

    It is time that the palm oil industry putting its acts together.
    How could there be NO leakage when MEOMA specify CPO with Moisture & Impurities ( M&I) at 0.5% where the technolgy today can well achieve 0.25%?
    As long as that is not tighten, the refiners will have to receive the CPO arriving at the doors meeting this loose specs.
    Syphooning away a few hundred Kg's of oil half way and making it up with water (moisture)to the specs will render the refiners helpless but to accept the CPO as good.
    The ministry should enforce that CPO specs to be 0.25% max. M&I. This would then help in the leakage problem.

  2. Dear Palm oil Outsider,

    After reading all of your comments in other various articles, it seems to me that you are a very well-informed person on Palm Oil.

    Palm Oil User

  3. Palm Oil outsider 30 June 2009 at 15:31

    Dear Palm Oil User,
    It takes Malaysia 50 years to achieve what has been achieved in the palm oil industry, from planting, milling, refining and fractionation to edible oils, oleochemicals and lately biodiesel.
    Yet there are so much more to do, best utilisation of bio-mass, re-newable energy, sustainable development, minor components, tocotrienols, vitamin E, sterols and other phytonutrients...
    In the beginning, we relied on foreigners to clear our jungles, to harvest timber, to plant rubbers, and to plant oil palms. Even CPO produced in the early years were all exported as crude to Europe for further processing into edible oils, into cocoa butter subsititue, margarine shortening etc....
    It takes courage, vision and leadership to have a world leading industry, a palm oil industry that we can now claim to be The World's BEST!
    Along the way, we have not only generated millions of jobs, billions in export earnings, but also a vast pool of intellects, engineers and experts who are in the forefront of this vibrant industry.
    Even as a palm oil outsider, you can just look around, how many people are dependent on this industry.
    We have industry leaders managing hugh acreage of
    well managed plantations, no more relying on "Mat Salleh" even though some of these guys were working under "Mat Salleh' managers before.
    There was time when even a single bolt and nut have to be imported for our palm oil mills, look what happens today:- you cannot even survive in the milling engineering business if you are no good!
    Look at refinery, oleochemical plants , biodiesel plants, photonutrient plants, we have now world class local companies competing for world class jobs.
    And all these are the good results of the oil palm industry, keep being a good palm oil user.
    As for me I will keep being a good palm oil outsider! No question asked.

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