Covid-19 remembered: The oil palm business continuity
25/03/2024 (The Star), IN March 2020, Malaysia confronted the onset of Covid-19 pandemic, prompting the imposition of a nationwide movement control order (MCO) to curb the virus’s spread.
Subsequent waves of restrictions, including the Conditional MCO and the Recovery MCO, followed.
However, events such as the Sabah state election and factory outbreaks triggered further waves of infections, leading to reinstated restrictions and eventually a nationwide MCO and “total lockdown” due to the Delta variant.
Despite vaccination efforts and plans to transition to endemic status by October 2021, a fifth wave emerged in 2022, driven by the Omicron variant.
Nevertheless, the vaccination programme made significant progress by inoculating over 80% of the population and 97% of adults by April 2022.
While the sacrifices of the frontline warriors remain paramount in our hearts and minds, it is also vital to recall the pivotal role played by the oil palm sector in upholding global food security, sustaining employment opportunities and nurturing public health.
Many may not be aware of the advocacy lobbying for the oil palm sector to be placed as an essential economic sector; or the shutdown of the sector in Sabah and the calamity after Sabah State Election.
The key advocates for the oil palm sector during the pandemic include Datuk Nageeb Wahab of the Malaysian Palm Oil Association (MPOA), Jeffery Ong and the undersigned of Malaysian Estate Owners’ Association (MEOA).
The recent Maybank Investment Bank’s Plantation Report, authored by Ong Chee Ting, sheds light on the significant contributions of the plantation sector during Covid-19.
Despite facing challenges such as soaring costs and declining productivity, the sector remained resilient, channelling over RM23 billion into government coffers through various taxes and levies between 2020-2023.
This included contributions from windfall profit levy, export duties, Malaysian Palm Oil Board (MPOB) cess, Sabah and Sarawak sales taxes and corporate and individual taxes, making it among the highest tax contributors to government coffers.
These funds were crucial for supporting initiatives like free Covid vaccinations and cash handouts.
Palm oil, the primary product of the sector, played a crucial role in maintaining stability during the pandemic, with palm kernel oil (PKO) also proving essential in producing sanitising and cleaning products.
Despite the economic turmoil, the plantation sector provided a sense of stability and support for workers, offering safety measures such as free Covid testing and vaccinations and ensuring a reliable source of income, even for foreign workers supporting their families back home.
During the pandemic, the advocates faced their defining moments when the sector was initially excluded as essential sectors, leading to a one-day shutdown on 18 March 2020.
Through sleepless and tireless efforts and engagement, they successfully lobbied for reclassification, securing continued operations by sustained appealing to the government.
Their perseverance resulted in a conditional exemption, allowing operations to resume on March 19, 2020.
However, over the next two years, they continued to navigate challenges, engaging stakeholders, dispelling misconceptions and garner for planters’ support to aid hospitals and communities.
After overcoming initial obstacles, the plantation industry faced a major setback when the Sabah government announced a shutdown of the oil palm supply chain on March 24, 2020. This decision posed a significant threat to plantation operations in the state.
Advocates mobilised their networks and media to engage with state officials, highlighting the industry’s essential role in Sabah’s economy.
However, the situation worsened after the Sabah State Election.
Campaign activities led to a surge in Covid-19 cases due to inadequate compliance with safety protocols.
During the pandemic, associations collaborated to enforce strict safety measures across the supply chain.
They issued united statements emphasising their commitment to safety during the MCO. Planters took proactive steps to develop Covid-19 standard operating procedures (SOPs), with notable contributions from entities like MEOA and IJM Plantations Bhd.
These SOPs were tailored to address the different challenges of the palm oil supply chain and later were shared globally through the Council of Palm Oil Producing Countries (CPOPC) to Indonesia and Costa Rica. The overarching goal was to ensure the continuous plantation operations under stringent safety measures.
Amid the Covid-19 pandemic, the oil palm industry faced a critical moment when the Sabah state imposed a bold shutdown of the oil palm supply chain. Initially affecting plantations in 3 districts, the shutdown expanded to 6.
Advocates highlighted the unique biological nature of plantations, emphasising the risks of shut-downs due to potential migration and unrest. They lobbied for the continuation of operations under strict safety measures to protect both public health and the livelihoods of workers.
Eventually, their efforts paid off, with the state government granting permission for operations to resume on 10 April 2020.
However, the planters Sabah faced other challenges due to ambiguous directives and local interpretations.
At one juncture, private jetty operations faced closure, highlighting slow decision-making and a lack of understanding of the sector’s supply chain.
Concurrently, meeting environmental and food safety regulations posed further challenges, with deadlines looming amid the MCO and difficulties in importing essential equipment.
In June 2020, a freeze on new foreign worker intake exacerbated labour shortages, despite appeals for exemption and efforts to recruit locals.
During the pandemic, MPOA and MEOA established respective Covid-19 funds with the former collecting RM5mil and used for procuring medical equipment and supplies for hospitals in Peninsular Malaysia.
Overcoming logistical challenges, MEOA coordinated mercy flights to transport medical supplies to Sabah. Additionally, planters played a vital role in vaccination efforts.
In Peninsular Malaysia, the MPIC-MPOA Vaccination Programme began.
In Sarawak, Sarawak Oil Palm Plantation Owners Association (SOPPOA) and Sime Darby Plantation Bhd collaborated with SDMC to establish the state’s first public-private partnership vaccination centers.
MEOA collaborated with Earth Heir to produce medical PPE equipment for hospitals and funded a vaccination center in Sandakan.
In rural Sabah, addressing vaccination challenges for migrants and their dependents was imperative. Stakeholders convened at an IJM retreat site, Hundred Acre Wood where discussions led to the establishment of Pusat Pemberian Vaksin (PPVs) in estates, starting with IJM Plantations in Sandakan.
The plantation support, including cold storage facilities and logistics, ensured a successful partnership and extended benefits to rural communities. More PPVs were subsequently established in estates, and by September 2021, vaccination initiatives were extended to youths aged 12-17, bolstering efforts for herd immunity. Mobile vaccination units and in situ PPVs became models for expanding vaccination coverage, mitigating risks associated with workers and villagers traveling to urban PPVs.
Throughout 2020-2022, the oil palm sector faced significant challenges due to the Covid-19.
Operations gradually returned to normal, but the acute shortage of foreign workers severely impacted yield, causing Malaysia to lose an estimated RM20bil in revenue in 2022.
By Feb 10, 2023, Malaysia had recorded over 5 million confirmed Covid-19 cases, with approximately 323,000 active cases and nearly 40,000 deaths.
Industry advocates and planters collaborated closely to navigate legal restrictions and implement innovative solutions, coordinating with government agencies including MPOB and health authorities to establish safety protocols.
Despite the challenges, valuable lessons in crisis management, resilience, and sector-wide solidarity were built.
There is a fervent hope that such pandemics will not recur in the future. Lest we forget.
Joseph Tek Choo Yee is the Malaysian Palm Oil Association chief executive. The views expressed here are the writer’s own.