Archive for July 2011

Melbourne Zoo criticised

MELBOURNE: Malaysian Palm Oil Council chief executive Tan Sri Dr Yusof Basiron has lashed out at the treatment of orang utans at Melbourne Zoo here, describing it as deplorable and a disgrace.

Yusof said yesterday he made a quick visit to the zoo to check out the anti-palm oil signs outside the orang utan enclosures and was appalled at the way the animals were screaming for attention in the cold winter.

"They were shivering and were in distress. Orang utans are tropical animals and find it hard to survive in biting cold temperatures. At the Melbourne Zoo, the orang utans had only sackcloth to cover themselves.

"Even then, the sackcloth was small and they were struggling to get it round their bodies. I felt sorry for these poor animals. Unlike human beings, orang utans cannot complain and their screams appeared to be ignored by the zoo." 

Yusof said he could not believe his eyes when he saw food for the orang utans being placed in the open so that visitors could see how the animals ate. "This was a poor show pandering to the people but cruel to the orang utans."

Yusof, who is accompanying Plantation Industries and Commodities Minister Tan Sri Bernard Dompok on an eight-day working mission to Australia, said Australian animal welfare authorities should investigate the pathetic conditions of the orang utans at the zoo, as well as other zoos in the country.

"The zoo must understand that these are animals from the tropics and adequate protection should be given to them during winter. Their enclosures must be warm and comfortable."

Yusof suspects that having the orang utans in such degrading captivity was to win public support in the campaign against a tropical industry and the use of palm oil products. He said having anti-palm oil signs at the zoo was to win public sympathy and to misrepresent the orang utan issue.

"Australians must visit orang utan sanctuaries in Malaysia and see how well the animals are taken care of. There is something sinister behind the campaign by western non-governmental organisations to ruin the palm oil industry." -- Bernama

IOI buying Dutaland estates for RM830m

Kuala Lumpur: IOI Corp Bhd is buying close to 12,000ha of matured oil palm estates from Dutaland Bhd for RM830 million. In a filing to the stock exchange yesterday, IOI said the planned purchase will help expand the group's agriculture landbank in Malaysia by 7 per cent to 190,862ha.

"This is the best price we can get. We negotiated for many months," said IOI Corp executive chairman Tan Sri Lee Shin Cheng, who is known to enjoy bargain hunting. 

"We like this block because it's adjacent to our existing plantation in Sabah," Lee told Business Times yesterday.

Still, the tycoon contended that there is hard work down the road as IOI will need to rehabilitate the estates. The current yield is very low.

IOI is a very efficient planter. Its estates are mostly high yielding, with top performers churning out more than 30 tonnes of fresh fruit bunches (FFB) per hectare.

 "The current yield at Dutaland estates' is about 10 to 11 tonnes of FFB per ha. But we have the agronomic expertise to bring up the FFB yield to 18 tonnes in the first year, and 22 tonnes in the second year," Lee said.

Zeti: We'll support those feeling the pinch

This is written by my colleague Roziana Hamsawi.

KUALA LUMPUR: Low- and medium-income households whose purchasing power has shrunk because of rising inflation need to be supported, Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz said yesterday.  She said the government is doing its best to increase the supply and distribution of food items, including accessing food sources at lower costs.

"All these sources will rein in the amount of the rate at which our inflation will increase," she said, adding that this must be addressed to ensure the country's future growth prospects will not be undermined.

Zeti said inflation is now at 3.5 per cent due largely to the very high commodity and energy prices, the latter's oil price has reached US$99 (RM295.02) per barrel.

"This has resulted in higher food and fuel prices and of course this is very much felt because these items are the main component in our consumption basket."  The government, she noted, has been directing a lot of efforts to address the inflation issue and "other areas we will address is to see how we can provide support, especially to the low- and medium-income levels."

Zeti added that addressing rising inflation is a focus now because if left unchecked, it can easily damage the sustainability of the country's economic growth. She spoke to reporters after announcing the issuance of commemorative coins for Malaysia's new third coins series here yesterday.

The country's inflation increased last month after a hike in power tariffs. Bank Negara, however, had kept borrowing costs unchanged at 3 per cent.

The central bank had in March said that consumer prices may climb 2.5 per cent to 3.5 per cent this year from 1.7 per cent in 2010.

New Thai govt urged to set up separate palm oil body

This is written by Nalin Viboonchart and published in Thailand's newspaper The Nation.

The Palm Oil Industry Club under the Federation of Thai Industries (FTI) wants the new government to pass a new bill and set up an independent organisation to develop and supervise the entire value chain, from oil palm agriculture to palm oil processing.

The Palm Oil Industry Club, the FTI's latest industrial group, set up in May 2011, has made it its priority to lobby for this new law.

Krisada Chavananand, the club's chairman, said the bill could cover the development of the entire palm oil value chain. Oil palm seeds, for example, should be developed scientifically and legally registered because good seeds mean higher oil content.

Thailand is the world's third largest palm oil producer behind Indonesia and Malaysia, but its research and development initiatives is behind the top two.

Palm oil production in Thailand is 8-10 million tonnes per year. Oil yield is 2.7-3 tonnes per rai per year, while that of Malaysia is 3.5 tonnes.

Moreover, oil content in Thailand is just 17 per cent, while in Indonesia and Malaysia it is 22 per cent and 19 per cent, respectively.

Oil palms can be grown within 10 degrees of the equator with good rainfall distribution. Thailand now needs a research centre and to focus on increasing productivity and oil content if it wants to be more competitive, said Krisada. "Oil palm planting provides job security to rural folks. Around 300,000 households in southern Thailand are in oil palm agriculture and related industries," he added.

"Oil palm biomass can be used as renewable energy while the oil is an important ingredient in food and cosmetics industries. In the past, we developed the industry without direction. But crude oil will become more expensive once the world's population reaches nine billion by 2050. So it's time for Thailand to take the development of the palm oil industry seriously."

Presently, the National Oil Palm Policy Committee is the mechanism for developing and supervising oil-palm agriculture and the palm-oil industry. But the private sector believes that there should be a legal organisation and bill to oversee the whole industry. For instance, the bill could specify budget allocation for research and development of seeds and productivity improvement so that the country can develop the palm oil industry over the long term.

It might also be beneficial if the government did not constantly subsidise cooking oil prices, said Krisada.

He also said the new bill could authorise another independent organisation to control crude palm oil mills. Thailand has too many mills, around 70, considering palm oil production is just 8-10 million tonnes per year. This results in high operating costs per factory and fierce competition. A better way to control the number of mills is to grade their operational productivity. Those that could not meet the criteria will be forced to close, said Krisada.

Come meet us, Musa challenges palm oil critics

This is written by my colleague Rupa Damodaran.

KOTA KINABALU: Australian lawmakers must come to Malaysia and see for themselves the situation on the ground before rushing to pass a law which could make bilateral ties awkward between Malaysia and Australia.

Sime Darby Bhd chairman Tun Musa Hitam is keen to meet the Australian politicians who had cast doubts on the agricultural practices of the Malaysian palm oil industry.

Stop scaring consumers with your labelling and "exploiting their fears", he told New Sunday Times recently in response to the palm oil labelling bill which will be presented to the Australian House of Representatives soon.

Criticise but don't cut off our lifeline, he appealed, referring to the 570,000 oil palm farming families who depend on the industry for their livelihood. Sime Darby is one of the forerunners in the private sector which has spent millions of ringgit to save and rehabilitate forests and protect wild species like the orang utan.

To Musa, the move to single out palm oil for the labelling of products can only be termed as a discriminatory one by the Australians.

The bill, which was moved by independent senator Nick Xenophon in late 2009, proposed, among others, amendment to the Food Standards Australia New Zealand (FSANZ) Act 1991 requiring food manufacturers to list palm oil on food labels.

However, last month, the Community Affairs Legislative Committee of the Australian Senate in Canberra recommended that the bill not be passed.

The bill sought to discriminate palm oil as a food ingredient produced unethically because it wrongly assumes oil palm planting with tropical deforestation, and the endangerment of orang utans and other wildlife.

Hope for Sabah wildlife

SABAH's forestry chief believes that if the orang utan is going to survive as a species, it will be in the state -- due to its well-managed forests.

Datuk Sam Mannan's conviction stems from the forest governance which the state authorities had put in since decades ago although it was admittedly a different scene then when the forests were logged heavily.

During the boom period when lands were expanded at a rapid pace, an alarming number of orphaned orang utan was reported at rehabilitation centres. 

But Sabah is now a trailblazer in conservation efforts, fully aware that its rich biodiversity is crucial not only for Malaysia but globally. "Some 75 to 80 per cent of orang utan in Sabah are either in protected areas or areas which are well-managed. 

"The heartland of the orang utan is in Ulu Segama, Danum Valley, Malua and Deramakot -- which measures 450,000 ha in area," he said, in an interview at his office. Forest reserves and parks make up four million ha or 53 per cent of its land area and there is no more of that compromise which took place more than 25 years ago.

Borneo, the third largest island in the world, is one of the mega-bio diversity hot spots with a myriad of plant and animal species, many of which are endemic to the island. Deramakot is the world's first certified lowland mixed-dipterocarp tropical forest in 1997, and Sabah intends to repeat this success story in its other forest reserves like Ulu Segama.

Unlike decades ago when the land classification by the colonial masters enabled the rich lowland to be utilised for economic activities, the state government now insists that forest reserve land be replaced, and issues 50-100 year licences.

"If not for the revenue from palm oil which the Sabah government is enjoying, there is no way to expand our conservation efforts," he said, adding that the revenue has accelerated, beating that from forestry.

Forest revenue, which used to be a billion ringgit earner in 1979 (80 per cent of the state's revenue) has nose dived to RM100 million last year.

But "the drought period for timber earnings" should pass as through the long-term licences, Sabah should be able to receive RM500 million from the production of sustainable timber by 2030, he said.

In the interim period, the state must step up its efforts to be innovative and carve out earnings from non-timber sources. These include tourism or sourcing geo-thermal energy from forests. Money is needed to repair whatever damage done to the land but such conservation efforts would lead to a vibrant tourism industry, too.

Sam is all for plantation giant Sime Darby's support in the conservation efforts in Sabah, especially in the Ulu Segama area where it has been helping to restore 45,000 ha of degraded rainforest. This is where the Tabin wildlife reserve is located and the critically endangered Sumateran rhino is found.

Sabah's biodiversity conservation and reforesting efforts have attracted a large number of foreign agencies and non-governmental organisations like the World Wide Fund for Nature, Japan International Cooperation Agency (JICA), Alexander Abraham Foundation, as well as business corporations like Marks and Spencer.

Foreign organisations such as the Royal Society United Kingdom which celebrated its 25 years in the Danum Valley is continuing its work with the Yayasan Sabah Concession Area.

Of immediate concern to Sam and his team is the 40,000 ha of forest reserve which was encroached by the small oil palm developers. He hopes more corporations will take the cue from Sime Darby.

So far his enforcement has destroyed 5,000 of this encroached land but to embark on replanting a forest promises to be an expensive affair, costing not less than RM80,000 per ha. Sam blames the small companies or individuals with oil palm smallholdings for giving the industry a bad reputation.

The culprits, he said, are those with bad agricultural practices, especially the smaller companies which do not respect the riparian reserves which form buffer or protection zones for the wildlife.

Because the wildlife sanctuary of Kinabatangan came about after the land alienation exercise (which explains its odd shape), the Forestry Department is also ensuring that natural corridors are provided for primates and other mammals. In some instances, artificial bridges, using ropes, are provided to enable the primates to cross the rivers.

To Sam, the next 20 years is critical for Sabah, "we must not falter otherwise our rainforest will be in trouble".

Smallholders protest law that tarnish palm oil

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: Malaysian oil palm smallholders held a peaceful protest against the Australian government yesterday, for proposing a law that will tarnish palm oil as an ingredient produced at the expense of tropical deforestation by labelling it on food products.

Oil palm smallholders protesting outside the Australian High Commission against the Truth in Labelling Palm Oil Bill, which is being proposed in the Australian Senate. — NST picture by Zulfadhli Zulkifli
National Association of Smallholders president Datuk Aliasak Ambia said they were making their voice heard as the labelling might affect the livelihood of more than 240,000 smallholders and their one million family members who depend on the commodity.

"We are not against the Australian government but we are against the labelling which discriminates palm oil against other vegetable oils. Why just label palm oil? What about other vegetable oils?"

The Australian Senate is proposing the Truth in Labelling Palm Oil Bill, which was mooted by independent senator Nick Xenophon in late 2009.

The new law seeks to amend current guidelines used by the Food Standards Australia New Zealand to require food manufactures to list palm oil in their food labels. The Food Standards Australia New Zealand is a bi-national government agency responsible for developing and administering the Australia New Zealand Food Standards Code, which lists requirements for foods such as additives, safety, labelling and genetically-modified foods.

However, last month, the Community Affairs and Legislative Committee of the Australian Senate in Canberra recommended that the bill not be passed.

During the protest, Aliasak handed over a memorandum and an open letter to the Australian High Commission's economic and social counsellor, Juliana Nam, and attended a 30-minute closed-door meeting with the support of 150 smallholders outside.

Aliasak said the bill, if passed, would affect smallholders' livelihoods and stump Malaysia's RM297 million replanting programme for this year.

The government had identified the oil palm sector as one of the National Key Economic Areas under the Economic Transformation Programme to transform the country into a high-income nation.

Renewable energy levy on heavy power users

KUALA LUMPUR: Consumers in Peninsular Malaysia and Sabah,whose monthly electricity bills exceed RM77, will pay an additional one per cent levy to subsidise renewable energy producers, starting September.

Initially, it was thought that consumers would only have to start paying the levy from January next year.

“Those who use more than 300 kilowatt hours or whose monthly bill is more than RM77 will be considered heavy energy users and will be levied,” said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui.

He said the Sustainable Energy Development Authority was tasked with collecting the renewable energy (RE) levy. It will also oversee the implementation of feed-in tariffs (FiT).

Chin said FiT essentially guaranteed green power producers a premium selling price over that generated from depleting and finite sources such as oil, gas and coal. Power generated from sustainable sources that will benefit from FiT include that of hydro, solar, biomass and biogas.

The minister said Sarawak was exempted from the RE levy because the state had its own electricity supply laws. The Renewable Energy Act 2010 refers to the Electricity Supply Act under the purview of the Federal Government. “Consumers in Sarawak are not affected because the Renewable Energy Act’s FiT are only applicable to Sabah and Peninsular Malaysia. Also, RE producers using biomass and hydro in Sarawak do not benefit from FiT.”

Since last Saturday, electricity rates in Sabah and Labuan have gone up by 15 per cent. This follows the June 1 electricity and gas tariff hikes nationwide.

Manufacturers, who make up more than 40 per cent of TNB’s clientele, are likely be hit hard by the RE levy.

Chin acknowledged that the largest contributor to the levy would be the industrial sector. “We’ve conducted dialogues with heavy power users, like manufacturers and shopping mall owners. Although some have expressed reservations, they have generally accepted this eventuality. We’re going to apply the Renewable Energy Act. If we renege on it, the renewable energy producers can sue the government.”

“Tenaga Nasional Bhd should be able to collect RM300 million per year on behalf of the government to fund these green power producers,” he said after officiating at a power generation and distribution event here yesterday.

Chin said the RE levy collected that is not used this year would be carried forward to next year. “It all depends on the amount we can collect, which will be disbursed. We don’t want to keep the money.”

NCR landowners switch to oil palms

Although Felda is a well-known success story for improving the lives of its settlers from its oil palm plantation estates, the story in Sarawak is different. A lot of land there is owned indigenous people and many have just discovered the fortunes of planting oil palms over subsistence crops. OOI TEE CHING spoke to some landowners and found that they need some help to get the ball rolling.

IN THE small town of Selangau in Sarawak, some 50-odd people had waited patiently for five hours. Led by their headman Puji Majan, 65, these are native customary rights (NCR) landowners who want to plant oil palm trees but are asking for the government's financial help.

Soon, Datuk Shahrir Samad, chairman of the Malaysian Palm Oil Board (MPOB), arrived and apologised for the delay caused by a schedule change. He came bearing good news. As the crowd proceeded to the makeshift shelter, Shahrir reassured Puji and his villagers that their application to MPOB for the RM7,000 per ha subsistence is being deliberated. "By October, we should have an answer," he said.

Although Felda is a well-known success story for improving the lives of its settlers from its oil palm plantation estates, the story in Sarawak is different. A lot of land in Sarawak is held by NCR landowners who are essentially the indigenous people there.

The state government wants to help develop these NCR land as a way to lift the people's income. So far, a total of 31 joint-venture companies had been formed to develop NCR land. As at June 2011, close to 56,000ha of NCR land is already planted with oil palms.

Many NCR landowners have seen the life-changing effects of oil palm planting and they want to do the same. The villagers of Selangau from three longhouses now want to plant up 50ha with oil palm trees after witnessing the success of the younger brother of the headman, Jabieng Majan, 60, who started planting oil palms, 12 years ago.

Back then, Jabieng, also an NCR landowner, planted 4ha with oil palm trees. In 1996, Jabieng recalled a friend who was working in a palm oil mill telling him, "if I were a native like you, I would've planted oil palm trees on NCR land. Palm oil prices are good, you can't go wrong with oil palms. The world needs more cooking oil."

Since venturing into oil palm planting with the financial assistance from the Agriculture Department, Jabieng's income has improved significantly. "Fifteen years ago, I used to live from hand-to-mouth. Now, with oil palm fruit bunches averaging at RM600 per tonne, I've settled most of my borrowings. I'm also able to expand my landholding by five times to 20ha," Jabieng said.

Along with the RM7,000 per ha subsistence for seedlings and fertilisers, the villagers highlighted to Shahrir that more funds are needed for basic farmland infrastructure. In Selangau, it costs RM2,000 per hectare to terrace undulating terrains and set out proper drainage. As for gravel roads, it would cost a further RM8,000 per km.

Shahrir told the smallholders to form co-operatives under MPOB so that they can hire heavy machinery to terrace hillsides, establish farm roads and proper drainage when opening up new oil palm estates.

From that meeting point, Shahrir travelled on to another estate owned by NCR landowner Salimah Kanawang, 34. "My husband works very hard out in the sea. It's tough. My children and I don't get to see him as often as we like," she said. Salimah then related her struggles to make ends meet for her two schoolgoing children.

"More than 10 years ago, when pepper price was good, I managed to save enough money to buy this land. Soon after, pepper price plunged. I decided to plant this 1ha plot with rubber instead. Even then, the returns were not consistent," she added.

Five years on, upon the advice of a friend, she decided to chop all her rubber trees and replant with oil palms. "It's the best crop that has worked for me and my family. Now that the oil palm trees are fruiting, we're able to reap a more rewarding and consistent income," she said.

When asked on her plans for the next five years, Salimah replied, "I want to double up my planted area when I'm able to accummulate enough capital. With this kind of returns from selling the oil palm fruits, my hope of sending my young children for tertiary education looks more promising."

Another NCR landowner Maran Entli, 56, works on a 1.04ha planted with 500 oil palm trees. Since planting the trees four years ago, he is harvesting 500kg of fresh fruit bunches a month.

"We used to plant this plot with other fruit trees like durians, pineapples and bananas. Our income was irregular and prices were not always good. Since switching over to oil palms, things have changed for the better," he said.

"Five or six years ago, I didn't have enough capital to hire bulldozers to terrace the land. As you can see my land is very steep. We do experience fertiliser run-off," Maran said. He then expressed hope that with the help of his children, he would like to double up his landholding to plant up 1,000 oil palm trees. "This time, however, we want to do things proper. We're seeking the government's help to terrace the hillside and carve out farm roads," he said.

Gelayak Banyoi, 56, whose farm is just five minutes drive away from Maran's said farming can be very capital intensive. Fertiliser, a necessary mix of crop nutrients, is very expensive. "If the government is able to subsidise fertilisers, it would be helpful," he said.

Five years ago, Gelayak used to only plant hill padi. He recalled the hard times and spoke of his turning point when his children's school teacher advised him to switch over to oil palm planting. "Now that the oil palm trees have started to bear fruits, we get to harvest the fresh fruit bunches every 10 days. Compared to to hill padi, which takes 10 months. Even then, the yield and the price is not as good as palm oil," he said.

Immigration: No fee for registering illegals

This is written by my colleague Farah Naz Karim.

PUTRAJAYA: Employers of illegal foreigners in the country will not have to fork out a single sen to register their workers as the Immigration Department has given an undertaking that it will provide free registration.

However, if they opted for the services of 336 companies appointed by the department to ease the department’s workload, they would have to pay RM35 as registration fee and another RM300 for management cost for each foreign worker.

Home Ministry deputy secretary-general Datuk Alwi Ibrahim said 37 Immigration offices throughout the country would be open from 8am to 10pm, including on Saturdays and Sundays, to facilitate a smooth registration exercise that would go on until July 31.

The department and the companies it appointed would start registering these workers from Aug 1, for two weeks.

Asked whether the department could handle the massive registration exercise, Alwi was optimistic that it could. “Should there be an overwhelming demand for the free service, the department is ready to extend the exercise.” This need, he qualified, would be assessed on a weekly basis, depending on the number of illegals who remained unregistered.

Alwi acknowledged that some of the appointed companies “have been charging exorbitant fees of up to RM2,000 per illegal worker”.  It is learned that some of the companies had appointed runners to identify and approach illegal workers to offer them the companies’ services.

“That is why we need to spread the information that the fee is just RM335 in total. We have also told the relevant embassies to inform their citizens who stay here illegally of the actual charges,” he said at a press briefing to clarify issues arising from the announcement of the amnesty programme which comes under the ministry’s initiative dubbed the ‘6P’. During this period, illegal foreign workers and their employers will be spared legal prosecution.

The 6P programme comprises registration, legalisation, amnesty, supervision, enforcement and deportation. The amnesty exercise would be for a period of three months after the registration process. There are an estimated two million illegal foreign workers in the country, almost equal to the number of those working legally in the country.

Alwi said he would also look into reports which said many Immigration Department branches referred employers wishing to register their workers over the last two days to the Kuala Lumpur and Putrajaya offices. On the registration of legal workers, as of yesterday, some 7,600 of them had been documented, he said.

Peat soil areas to be flooded to tackle fires

SIBU:  The Department of Environment (DOE) has been instructed to raise the water level in peat soil areas in states with large tracts of such soil in order to fight possible outbreaks of fire.

Yesterday, Bernama reported that Natural Resources and Environment Minister Datuk Seri Douglas Uggah Embas said this was one of the plans to stop the current haze problem from deteriorating. 

"We have peat soil areas in Sarawak (Miri), Johor, Selangor and Pahang. I've told DOE to pump water from tube wells in these states to flood their peat areas." 

Embas said this was critical because once the peat dried up, it would become very combustible and fighting fires would be very time-consuming and challenging, based on past experience. 

"The moment the water level in these places drops by three to four metres, DOE will have to act. As such, the officers will have to go to the ground to monitor the level closely and daily," he said.

The minister highlighted the DOE had also activated its action plan to prevent any open burning and its standard operating procedure to fight peat soil fires which were a local source of the haze.

"For Sarawak, which is the only state to permit open burning by plantation owners, its Natural Resources and Environment Board has been directed to put a freeze on the permit after a week of continuous dry weather. In view of the dry season, I would like to appeal to all to minimise open burning, including by smallholders who should take steps to ensure their fire does not spread to other areas."

Embas then said he would attend the Asean Ministerial Steering Committee meeting on transboundary haze scheduled to be held in Thailand next month. He added that Malaysia currently had very few hot spots while there were still several in Sumatra which contributed to the haze.

In Kuala Lumpur, Minderjeet Kaur reports that checks on the water level at all four of the fire-prone peat soil areas were now underway. DOE director-general Datuk Rosnani Ibarahim said the wells would be filled with groundwater before the peat soil was flooded.

"Surveillance is being carried out. We will note the level of water in these wells first," she said, adding that the wells were built three years ago to flood peat soil areas prone to fires during prolonged dry spells.

Meanwhile, as at 7am yesterday, the Air Pollutant Index readings taken at 52 DOE stations nationwide indicated that the air quality had improved with no station reporting unhealthy air.

Tradewinds on track for solid results

KUALA LUMPUR: Tradewinds Plantation Bhd is on track to achieve solid results this year, thanks to buoyant palm oil prices trading above RM3,000 per tonne.

Although palm oil prices have started to slide in the last three months, the third-month benchmark palm oil futures contract on the Malaysia Derivatives Exchange have, so far, averaged around RM3,300 per tonne this year. Yesterday, the contract closed RM62 higher to RM3,144 per tonne.

"We did well in our first quarter as the palm oil prices were averaging around RM3,500 per tonne. We should be able to perform well for the year because prices are still holding up. We're also harvesting more fruits," said chief executive officer Chan Seng Fatt.

The group is expected to harvest 10 per cent more fruits this year because 70 per cent of its 102,000ha land planted with oil palms are of prime ages. "About 72,000ha of our planted area has reached maturity. We should be able to harvest 1.3 million tonnes of fresh fruit bunches this year," he said.

Chan was speaking to reporters after the company's shareholders' meeting here yesterday. Also present was chairman Datuk Wira Syed Abdul Jabbar Syed Hassan. Tradewinds' shareholders unanimously approved the company's takeover proposal of Mardec Bhd .

Syed Abdul Jabbar said the Mardec acquisition is strategic to the group's plans to expand into the processing and marketing of rubber products. Mardec is the country's third biggest rubber processor after Lee Rubber and the Felda group.

On October 2009, Tradewinds Plantation's wholly-owned unit, Prisma Spektra Sdn Bhd, offered to buy out Semi Bayu Sdn Bhd's shares in Mardec. The sale price was revised to RM140 million from the initial RM150 million after Ernst & Young conducted due diligence on Mardec. When asked why the deal is taking so long to conclude, Syed Abdul Jabbar said: "We still have a few things to sort out with the authorities, like the Economic Planning Unit."

In the upstream, he said Tradewinds has planted 6,120ha with rubber trees in Kedah. The trees are due to be tapped next year.

On the whole, Tradewinds has grown to be a sizeable planter as its agricultural landbank stands at 141,465ha. "We still have 18,000ha of plantable reserves which can last us to 2014," he said.

Levy on heavy power users next year

Consumers whose electricity bill is RM100 in a month will need to pay an extra RM1 for renewable energy levy, starting next year.

KUALA LUMPUR: The government will impose a levy on heavy electricity users starting January 2012 and use the money to remunerate green energy producers under the Renewable Energy Act's feed-in tariffs (FiT).

"Green energy producers will be rewarded via the feed-in tariffs. The funding is derived from polluters-to-pay concept," said Energy, Green Technology and Water Ministry's deputy secretary general for energy sector Badaruddin Mahyudin.

He said the Sustainable Energy Development Authority will set up the Renewable Energy Fund in September 2011 to collect the levy and oversee the implementation of the FiT. "Those who consume more than 300KW (kilowatts) per hour will be considered heavy energy users and they will be taxed. We estimate Tenaga Nasional Bhd (TNB) to collect RM300 million per year on behalf of the government to fund the green power producers.

"Please note, household customers consuming 200 units of electricity or less will not be affected by the renewable energy levy," he said. "Our ministry has, so far, received a RM189 million loan from the Finance Ministry to kick-start the Renewable Energy Fund," he added.

Badaruddin was speaking to reporters after launching the pre-show guide of POWER-GEN Asia 2011 here yesterday. The regional conference and exhibition on power generation, transmission and distribution will be held at the Kuala Lumpur Convention Centre from September 27 to 29.

It was highlighted that manufacturers, which make up 40 per cent of TNB's clientele, are the likely target group to be slapped with the renewable energy levy.

Badaruddin said the government is aware that the largest contributor to the levy will be from the industrial sector. He gave an assurance that the 1per cent levy on the bills of heavy energy users will only minimally impact the industry's manufacturing cost.

Moreover, the industrial sector may want to offset the incremental electricity cost by being more energy-efficient at their factories or even generating green power, thus benefit from the FiT.

To date, TNB's small renewable energy programme is only applicable to those generating up to 10MW. Come September 2011, the FiT will raise the bar to 30MW. Power generated from sustainable sources include that of hydro, solar, biomass and biogas.

The FiT essentially guarantees green power producers a premium selling price over that generated from depleting and finite sources like oil, gas and coal. The FiT could, on a cumulative basis until 2020, facilitate avoidance of about 46 million tonnes of carbon dioxide emitted from conventional power generation. This is achieved if and when Malaysia generates at least 3,000MW of green power.

New NCR land law to boost investor confidence

KUALA LUMPUR: The recent change in laws governing native customary rights (NCR) land should help boost investor confidence, said Sarawak's Land Development Minister Tan Sri Dr James Masing.

"We still have plantation companies coming in to invest. The amendment was to plug some loopholes and provide certainty to investors," he told Business Times in a telephone interview yesterday.

Last month, Sarawak's state legislature amended the Land Custody and Development Authority (LCDA) ordinance to accord new definitions to the terms "development agreement", "government" and "owner".

Masing explained that the amended law now empowers the state-owned LCDA agency to be the sole trustee or managing agent for landowners within a development area.

"We've seen, while court cases are still pending judgements, rampant illegal harvesting of fresh fruit bunches and blockades. Some NCR landowners have even been hoodwinked by people with ulterior motives into withdrawing from the projects altogether. These problems have undermined investor confidence in NCR land development. Hopefully, the amended laws will help to quickly resolve such destructive situations," he said.

Among plantation companies that have invested in Sarawak's NCR land development are IOI Corp Bhd, Boustead Holdings Bhd, TH Plantations Bhd, Tradewinds Plantation Bhd, Sarawak Oil Palms Bhd, Ta Ann Holdings Bhd, WTK Holdings Bhd, BLD Plantation Bhd and Rimbunan Hijau Group.

"My ministry will also seek closer co-operation from the police and the enforcement division of the Malaysian Palm Oil Board to clamp down on theft of oil palm fruits," he said.

Masing went on to elaborate that the new law provides for Section 29 of the Government Proceedings Act 1956 to be applicable to LCDA. This means, where public interests is at stake, the courts are prohibited from granting injunction or orders of possession against the government, its officers or agents. "Basically, disputes or differences concerning any development agreement will first be referred to mediation and if that fails, to arbitration," he said.

Todate, the minister said the LCDA has developed 34 projects covering of 412,219ha. A total of 31 joint-venture companies had been formed to develop NCR land. As at June 2011, close to 56,000ha of NCR land is already planted with oil palms.

Since the start of the year, the Sarawak Land and Survey Department had started to gazette plots of NCR land under Section 6 of the Sarawak Land Code, after perimeter surveys. This will help to determine the boundaries and size of land to rightful owners.

After the lands are surveyed for individual plots under Section 18, the NCR landowners will be accorded their individual titles.

Masing said, "we've seen many disputes arise and become controversial when boundaries of NCR and state land is not easily determined. With these surveys, we'll be able to establish the boundaries and rightful owners of NCR land in Sarawak. We want to expedite NCR land development to enhance the socio-economic wellbeing of landowners."

Australia’s move, a bad precedent, says Gapki

This is written by Linda Yulisman and published in The Jakarta Post.

JAKARTA: Australia’s proposed palm oil bill requiring products containing palm oil to have explicit labels is discriminatory, and could become a bad precedent for other importing countries, local palm oil producers say.

Indonesian Palm Oil Producers Association (Gapki) chairman Fahdil Hasan said on Monday in Jakarta that the new law could be adopted by other countries, and become a reason for consumers to stop buying palm oil, an important raw ingredient for the food industry.

“The bill will create and spread a negative perception of palm oil as detrimental to human health and other countries may follow the move, and consider that such a perception is true,” he told The Jakarta Post in a telephone interview.

He added that although Indonesian palm oil exports to Australia were relatively small compared to other countries, local producers had expressed concern about the regulation’s impact on buyers’ perception of palm oil.

Trade Industry Ministry data showed that last year, Indonesia, the world’s largest palm oil producer, exported 80 tons of palm oil only to Australia with a total value of US$73,000. Total palm oil exports reached 15.6 million tons, valued at $16.4 billion last year, according to Gapki’s data.

Fadhil said the proposed bill was discriminatory and would potentially breach the rules of the World Trade Organization (WTO). “It is discriminatory toward palm oil as there’s no scientific evidence to support the idea that palm oil damages human health,” he said, adding that scientific research showed that palm oil was beneficial to human health.

Currently, the Australian Parliament is intensively discussing the Food Standards Amendment (Truth in Labelling-Palm Oil) Bill 2010. According to the parliament’s website, the bill “amends the Food Standards Australia New Zealand Act 1991 to require Food Standards Australia New Zealand to develop and approve labeling standards to be used by food producers, manufacturers and distributors of food containing palm oil”.

It says that one of the main considerations for the labeling requirement is  that allowing palm oil to be listed as “vegetable oil” on food packaging is misleading to consumers” and “that manufacturers should be encouraged to use sustainable palm oil in their production process and subsequently use the status of “Certified Sustainable Palm Oil” under this Bill”.

Last week, the Indonesian government stated its objection to the bill through a letter on June 27. Indonesia's Trade Ministry’s bilateral trade cooperation director Pradnyawati said that palm oil was proven scientifically to have no trans fatty acid and instead had high stability for oxidation and Omega 9, which could reduce cholesterol and low-density lipoprotein.

“Some Indonesian trade partners have acknowledged the benefits of palm oil to health. The US and Canada have even legitimated the labeling of food products containing palm oil as trans fat free products,” she explained.

Besides, Pradnyawati said, Indonesia was committed to produce sustainable palm oil through, among others, applying the Indonesian Sustainable Palm Oil certification scheme.

For the love of the redheads?

This is written by my colleague, Rupa Damodaran.

“What's in a label?” one may ask. Aplenty, especially when it has to do with saving the redheads of Borneo, an affectionate term for the orang utans by Australians.

It is quite heartwarming to know how the people rally behind their green leaders to save these redheads in Indonesia and Malaysia through a pair of doleful eyes and a crypt message which says an orang utan dies every two hours due to palm oil activities.

The war against palm oil will never let up for environmentalists as long as their strong allegations are not countered or nipped immediately. Events over the last fortnight over the disputed Food Standards Amendment (Truth in Labelling — Palm Oil) Bill 2010 are leading to a trade war between Australia and Malaysia and threaten to make things awkward between both governments.

Malaysia did a great job in convincing the Senate committee, which heard and questioned why palm oil should be the only oil to be singled out. But when political strength wrestles rational scientific arguments, Malaysia — as one of the top global producers of the palm fruit oil — could only watch, haplessly.

Already adopted by the Senate, it has to be passed in the House of Representatives where the government rules with the support of four independents.

The Greens Party, which supports and has strong political influence on the minority government, wants the Bill passed to enable products containing palm oil to be singled out for attack.

It is already a triumph for the party for the little effort put in to convince the masses. Whether this will help the redheads will be anyone’s guess.

World trade expert Alan Oxley puts it that Australia is enacting into law, a measure which has no justification except to create another way for Greens pressure to “green mail” producers in global markets not to use palm oil.

For the Malaysian palm oil industry, the workload defending its practices and the country’s golden crop will only get heavier once the law is enacted.

No doubt Australia’s imports of palm oil (estimated to be about 130,000 tonnes a year) are not as significant as other advanced markets, but the new legislation would endorse it as an ideal test decision for others to take it up to markets in the European Union or the US.

Malaysia must double its publicity efforts to let the rest of the world know its sustainable practices help towards conserving the orang utans and also the interests of smallholders.

Most of the Australian masses are unaware of the efforts put in by, for instance, Wilmar International - the world's largest palm oil company - to help the Borneo Orangutan's Survival Foundation and central Kalimantan government to provide protection for the orang utans and their habitat. Some 800 orang utans are waiting to be located to new habitats.

Also, Malaysian palm oil companies are the leaders in producing certified palm oil through their sustainable agricultural practices.

One can only gather that the Malaysian story needs to be retold many times, especially on the palm oil's benefits in feeding the global population. Industry players must be more forthcoming in supporting the conservation of the environment and wildlife.

Australian zoos have jumped on the bandwagon to pinpoint the endangered species in Malaysia and Indonesia and are whipping up support from schoolchildren and communities.

Just as taken aback with the sudden turn of events in the Senate was Australia's closest neighbour, New Zealand. It felt that the Bill may have also breached the joint Australia New Zealand Food Treaty as no consultation was sought.

The food and grocery councils of both countries are most concerned with independent Senator Nick Xenophon's Bill.

For the Australian or New Zealand consumers, it is the higher price of products that will hit them hard as high costs of changing the food label between AU$10,000 and AU$19,000 each (RM32,300 and RM61,370) would filter to the grocery shelves.

The Malaysian Palm Oil Council chief executive officer Tan Sri Yusof Basiron has warned that the trade barrier game can become very messy if Malaysia and Indonesia decide to follow the labelling Bill.

He argues that this will be a discriminatory use of the labelling law against the interest of palm oil, and will violate the World Trade Organisation provisions, compelling both producers to lodge a complaint.

If we are considering the path of trade dispute, it will not be the first the country has seen. It will be the third, according to an official of the International Trade and Industry Ministry. The first case was a clear-cut one involving Singapore regarding the imports of polyethylene and polypropylene, but it did not go through the full process of setting up a panel, ending with the withdrawal of the complaint.

The second one involved the dispute over the US import embargo on Malaysia's wild harvested shrimps as the US alleged that our harvesting methods killed turtles. The case was eventually ruled in favour of the US.

Liberia looks to Malaysia

MONROVIA: Liberia wants to woo more investments from Malaysia, in particular to develop its natural resource sector. "The key to progress is continued peace. We welcome more direct investment and technology transfer from Malaysia," said Liberian vice president Joseph Boakai.

He was speaking to reporters recently, after the oil palm tree planting ceremony at Sime Darby Bhd's newly-established estate here.

Sime Darby's presence is a milestone considering that less than a decade ago, Liberia was mired in civil war. In the 14 years of devastating civil war that ended in 2003, Liberia's economy was shattered. Many business people, including Sime Darby's predecessor Kumpulan Guthrie Bhd, fled the country as rebels gained control of vast quantities of gold, raw diamond, rubber, and tropical hardwood.

In that 14 years of civil unrest, as many as 80 per cent of Liberians were jobless. The economy then was heavily dependent upon subsistence farming and rubber tapping. In 2005, Liberia's national budget was only US$80 million (RM240 million).

In 2003, peace was achieved in Liberia under the United Nations (UN) peacekeeping force. It set the stage for a democratic election at the end of 2005, resulting in the presidency of Ellen Johnson-Sirleaf, a Harvard-educated banker.

Since Sirleaf's administration came to power in 2006, her team have worked with a growing number of private investors to help turn things around. "In the last five years, our economic growth has exceeded 5 per cent per year. And, most critical, we are at peace for eight consecutive years," Boakai said.

Sime Darby's decision to invest in Liberia dated back to as early as 2006, before its merger with Kumpulan Guthrie Bhd and Golden Hope Bhd in 2007. At that time, Tun Musa Hitam was the chairman of Guthrie. Musa recalled instructing Helmy Othman Basha, who was employed under Kumpulan Guthrie to assess the feasibility of reviving the group's concession in Liberia.

"I remember Helmy wasn't too happy with the instruction as the civil wars had, previously, left us no choice but to withdraw from Liberia. Nevertheless, Helmy pursued the matter and went on to meet with President Sirleaf," Musa said.

After the merger into Sime Darby in 2007, Datuk Henry Sackville Barlow recalled that all directors on the board supported the revival of Guthrie's concession in Liberia. "There was no opposition, everyone was supportive of the proposal. We needed to grow and the revival of the concession proved to be the right thing to do," said Barlow.

Musa added, "we might have failed on the earlier two attempts but this time, we're very optimistic that we will be third time lucky."

Until two years ago, oil palm planting in Liberia is not really known compared to its traditional exports - iron ore, rubber, timber, gold and diamonds. "We're changing for the better. We are restoring our once-vibrant nation. Without international support, we would not have made this progress and would be at much greater risk of returning to war," Boakai said.

In October 2011, Liberia will hold its second democratic presidential election. While Sirleaf's administration has to deal with constant influx of refugees from the neighbouring Ivory Coast, the four million citizens of Liberia are looking forward to a constitutional referendum and scheduled drawdown of what was once the world's largest UN peacekeeping mission.

"If our people seemed impatient, at times, investors must understand where we've come from and where we're heading to," Boakai said. Throughout the streets of the capital city of Monrovia, scores of UN tankers are seen carrying out surveillance and distributing clean drinking water to residents. There were also many restless-looking, unemployed young adults loitering in the streets.

It was, therefore, not surprising that throughout Boakai's visit at Sime Darby's newly set up estate at Grand Cape Mount county, he lauded the community for embracing the operation of the oil palm company. He reiterated peace is a prerequisite to a more prosperous future for all.

Liberia's Agriculture Minister Dr Florence Chenoweth, who was also present, said lasting peace is highly dependent on job creation. "Agriculture is one sector that can solve hunger, create jobs and reduce poverty. We're very happy with Malaysia's long term investment and commitment to our economy."

She welcomed Sime Darby's initiative to help her government empower small farmers to be more involved in mechanised and commercial farming. Under the concession to develop 220,000ha until 2072, Sime Darby is required to work with smallholders to plant up 44,000ha with oil palm under an Outgrowers Scheme.

"Sime Darby has a good track record of large-scale oil palm planting and best practices to achieve high oil productivity and at the same time, mindful of biodiversity conservation," she said.

She highlighted that her government will seek funds from the World Bank to help finance the Outgrowers Scheme for the benefit of Liberians.

Currently, other plantation investors who are also in Liberia are LIBINCO of the London stock exchange-listed Equatorial Palm Oil Group, Golden VerOleum (Liberia) Inc of the Indonesian Sinar Mas Group and Maryland Oil Palm Plantation. Chenoweth expressed hope that plantation investors can collectively transform Liberia into one of the major producers of palm oil in Africa, meeting domestic and export needs .

In wooing foreign direct investment, the Liberian government had established a "one-stop" business centre, lowered construction permit fees, revised the revenue code and aligned import tariffs with ECOWAS common external tariffs. The Economic Community of West African States (ECOWAS) is a regional group of 15 West African countries. Founded in 1975, its mission is to promote economic integration across the region.

In facilitating a more business friendly climate, Chenoweth said her government had waived import duties on Sime Darby's import of high yielding oil palm and rubber seedlings into Liberia. "There's no more tax to bring in the good planting materials," she said.

Such reforms had improved Liberia's ranking in the World Bank's Doing Business 2010 report. To-date, it is the 10th top reformer among African countries.


Call for consulate in Liberia

MALAYSIA needs a consulate in Liberia to protect and promote our trade interests through proactive diplomacy, said Tun Musa Hitam.

As a former deputy prime minister and now, the chairman of Sime Darby Bhd, Musa said Malaysia’s investment in Liberia is set to expand significantly in the coming years.

“It would be relevant and timely for our government representatives to be here.”

According to Ministry of Foreign Affairs’ or Wisma Putra website, the nearest Malaysian consulate to Liberia is in the neighbouring state of Guinea.

“One of Malaysia’s earliest and significant investment here is in forestry. Now, if you just look at Sime Darby, we’re going to pump US$3.1 billion (RM9.3 billion) into Liberia’s economy in the next 15 years. So, it makes sense to have a consulate here,” Musa said.

Malaysia maintains diplomatic relations with countries and international organisations through 105 missions in 83 countries abroad. This includes 66 embassies, 16 high commissions, three permanent representatives to the United Nations and the Association of Southeast Asian Nations, a Malaysian Friendship and Trade Centre as well as 19 consulate offices.

So far, the government has appointed 53 Honorary Consuls to support and assist in the promotion of Malaysia’s interest abroad.