Tan Sri Dr James Masing

15/02/2014 (Borneo Post) -  Wilmar International Ltd (Wilmar), the biggest single buyer of crude palm oil (CPO) produced in the state has given a notice that it will stop buying oil produced from palms planted in areas of ‘high carbon stock’ and peat swamp after 2015.

This development has raised the ire of Tan Sri Dr James Masing the Minister of Land Development whose ministry received the notice through a letter from the company dated Dec 5 last year.

Likening the threat to economic bullying, Masing said Sarawak would not bow to international pressure in its rural poverty eradication efforts which depended heavily on the palm oil industry.

“This directive from Wilmar has very disastrous effect on us because it could stop our programme on eradication of poverty,” said Masing at a press conference held at his office yesterday.

Wilmar, a multinational company based in Singapore has set up a palm oil refinery in Bintulu more than 10 years ago. It absorbs more than 45 per cent of the total state CPO production (1.4 million tonne of CPO) and is the main buyer of 41 palm oil mills across the state.

Despite the obvious adverse impact on the palm oil industry in the state, Masing said Sarawak would stand firm in its commitment to raise the income and living standard of the rural people through the development of the palm oil industry.

He explained that “high carbon stock” areas cover primary forest, logged forest, secondary forest, forest cleared for shifting cultivation and peat swamp.

It has been the state’s policy to preserve primary forest as it only allowed logged forest and secondary forest to be cleared for oil palm planting.

Wilmar’s boycott of oil palm planted on high carbon stock would mean stopping oil palm cultivation in the state as all the 1.6 million hectares of oil palm planted in the state are either planted on cleared logged or secondary forest or peat swamp.

“We have no areas where there is no forest, if you want to plant oil palm where there is no forest, you will have to go to the Sahara Desert,” he quipped.

Masing disclosed that in 2012, state sales tax derived from palm oil production was RM425.2 million which was 10.8 per cent of total revenue for Sarawak. In the same year, Sarawak’s CPO generated RM8.4 billion in export value for Malaysia.

He added there were 17,578 oil palm smallholders in the rural areas of the state and based on the CPO average price of RM458 per tonne per fresh fruit bunch (FFB), these smallholders earned over RM300 million a year.

Stopping oil palm planting in the state would directly affect about 300,000 people in the rural areas while a far bigger number would be deprived of the spin-offs of the industry and indirectly affected he pointed out.

“On this issue, we will not negotiate with anybody how to do it (eradication of poverty in rural area). The lifestyle of the people of rural area is not up for negotiation with the international community. We will not compromise the method of how we should improve the life of people in Sarawak,” said Masing.

He said the environmental argument put forth by the company did not hold water as oil palm could only be planted after forests had been cleared and Sarawak had been very cautious in conserving its environment and there was even a department to look after state’s peat land.

“I have a feeling that they (Wilmar) are influenced by their buyers and some of them from Europe. Through NGOs, they (Europe countries) use all kinds of excuses to stop us from growing oil palm but our economy is not up for negotiation,” said Masing.

Describing Wilmar’s decision as a “bullying tactic”, the Balleh Assemblyman believed that the decision was the result of economic rivalry as oil palm had been a more effective producer of edible oil than either soybean or sunflower seeds.