01/05/2010 (The Star Online) - GIVEN the nature of their business, plantation companies are among the earliest in the country to embrace and adopt the best green practices to ensure that palm oil is sustainably produced under well-managed environmental conditions.

In fact, many of these companies are being judged on how they earn their profits based on various green practices and initiatives.

Going green was inevitable. There were constant attacks from Western environmental NGOs like Greenpeace and Friends of The Earth criticising oil palm plantation groups as the culprits of climate change, forest destruction, destroying the biodiversity and endangering the habitats of the orang utan and Sumatran rhinos.

Local planters continue to face pressure from major consuming nations like the European Union (EU). The carbon issue is getting serious and challenging, and it is being taken up by the Roundtable on Sustainable Palm Oil (RSPO), the EU, the US and the Intergovernmental Panel on Climate Change/United Nations Framework Convention on Climate Change.

As local palm oil is heavily dependent on exports, companies had to undergo highly capitalised and rigorous time-taxing certification process under RSPO that supports certified sustainable palm oil (CSPO) in order to secure access into the international markets.

Some of the local planters producing CSPO are IOI Corp Bhd, Kulim (M) Bhd, Kuala Lumpur Kepong Bhd and United Plantations Bhd. Apart from that, plantation companies are also addressing environment and sustainability issues on the local front. Among the earliest green advocates is plantation giant IOI group.

Back in 1995, long before the phrases like “corporate responsibility”, “sustainability” and “going green” became popular in the business world, IOI had already introduced Vision IOI, which acknowledged responsibility toward its shareholders, customers, employees, business associates, community and the nation.

Group executive director Datuk Lee Yeow Chor believes the sustainability of the businesses is interdependent on the sustainability of the ecosystem surrounding its operations.

“Our operations meet the regulatory requirements on environmental impact in the countries or markets in which we operate,” he says.

It practises zero burning when it comes to land clearing for new planting or replanting. It does not cultivate oil palm on moderate or deep peat, riverine reserves, hill slopes with gradient greater than 25 degrees and on high conservation value forest areas.

IOI’s plantation operations produce a vast amount of biomass by-product, some of which are used to generate energy.

The biomass steam and power plant at its refinery complex in Sandakan uses kernel shells and empty fruit bunch fibres to produce almost all its steam and electricity requirements.

Through an efficient plantation management programme, IOI’s palm oil yield per ha is 50% greater than the industry average. This results in a dramatic reduction in land required to produce the same amount of palm oil by a remarkable 80,000ha.

“This efficient use of land translates into lower fertiliser, pesticides and energy usage as well as lower greenhouse gas emissions which in turn deliver significant benefits to the environment.”

As a founding member of RSPO, IOI also plays an active role in promoting sustainable practices.

IOI is committed to pursue RSPO certification audit for all its 80 estates and 12 mills in Malaysia by middle of 2012.

“So far, IOI has obtained sustainability certificates for 15 of its estates with planted areas of 31,000 ha or about 21% of its total planted areas,” Lee says.

Another company on a green mission is mid-sized plantation player Kim Loong Resources Bhd. Managing director Gooi Seong Hin says the group takes appropriate measures to ensure that regulatory environmental requirements are complied with, particularly in the treatment of effluents in its plantation and three mills.

Significant progress has been made in the production of bio-fertilisers and compost from empty fruit bunches (EFB) recovered from its oil mill at Kota Tinggi, Johor.

“It is our aim to maximise the utilisation of wastes and co-products by converting them into new source of revenue,” adds Gooi.

The group is committed to improve efficiency and reduce wastes in its Kota Tinggi, Keningau (Sabah) and Telupid (Sabah) mills, which Gooi says, will translate into carbon credits which they can sell in order to generate tax free profit of about RM2mil each for its Keningau and Kota Tinggi mills.

The group will also increase the sale of excess palm kernel shells to replace usage of fossil fuel. The estimated revenue of this from its Kota Tinggi mill for financial year 2010 is RM1.2mil.

On the bio-fertiliser plant in Kota Tinggi, Gooi says the group plans to convert part of the biomass and decanter solids into bio-fertilisers for the local and overseas market.

Other work in progress is to expand production and develop tocotrienol market as well as specialty oil and fats products under Palm Nutraceuticals Sdn Bhd, adds Gooi.