Roundtable on Sustainable Palm OilA business initiative of Anglia Oils/Aarhus, Golden Hope Plantations Berhad, Migros,
Malaysian Palm Oil Association (MPOA), Sainsburys and Unilever in cooperation with WWF
Sustainable Palm Oil:Malaysian Palm Oil Association Perspective
ByEnvironment Working Commttee
Malaysian Palm Oil Association (MPOA)
2.187 mil ha : 60%249 mills : 69%37 ref’ns : 78
1.096 mil ha : 29%91 mills : 25%8 ref’ns : 17
0.414 mil ha : 11%22 mills : 6%2 ref’ns : 4
Distribution of Oil Palm Planted Area, Mills, Refineries and Ownership in Malaysia for Year 2002
( 3.670 mil ha, 362 mills, 47 refineries )
Peninsular MalaysiaSarawak
Sabah
Ownership of Planted AreaPrivate Estates : 60%State Settlers Schemes : 30% Smallholders : 10%
Receipts from Palm Oil Industry for Malaysia: 1998-2002
19981998 19991999 20002000 20012001 2002200200
55
1010
1515
2020
2525
Billion RMBillion RMRM22.6RM22.6
RM14.1RM14.1
RM19.6RM19.6RM19.2RM19.2
RM14.9RM14.9
00
500500
10001000
15001500
20002000
25002500
CPO PriceCPO Price
1,449 1,449
YEAR 1998 1999 2000 2001 2002CPO & CPKO/
mil tons 9.43 11.89 12.23 13.34 13.38
2,3772,377
996 996
1,363 1,363
894 894
1. Backbone of country’s development especially rural socio-economic development and political stability
2. Large investment and reinvestments eg. Year 2002 : ~ RM500 million alone
3. Trading imperative with over 90% of production exported
4. Provides direct employment to 400,000 people and cares for about 2 million people ( housing etc ) -excluding multiplying effects and other spin-offs activities
5. Significant foreign exchange earner : ~RM20 billion or USD5.25bil annually
The Palm Oil Industry in Malaysia
Malaysian Palm Oil Association (MPOA)
• Representing 70% of the privately-owned oil palm planted areas in Malaysia (40% of the total planted area in Malaysia )
• As an integrated single powerful voice, MPOA represents the complex needs of the plantation industry to ensure its long termsustainability.
MPOAMalaysian Palm Oil Association
RGARGA UPAMUPAM MOPGCMOPGC MEOAMEOA
Established in 19994 associations mergedto become one
SustainabilityThe Triple Bottom Line (3Ps)
EconomicallyEconomically sustainabilitysustainability Social sustainabilitySocial sustainability
Environmental sustainabilityEnvironmental sustainability
Economic sustainability• The uneven playing field (after James Fry, 2003)
Economic sustainability• In the US, the latest Farm Bill has created price
supports that provide a very effective and high safety net that protects farmers’ receipts whenever world prices are low. The effect of this safety net is to remove the incentive for US oilseed farmers to cut production when the world market is depressed. (James Fry, 2003)
• The EU Common Agricultural Policy (CAP) has abandoned its system of paying high prices to oilseed farmers; instead it now supports them by paying growers a fixed sum per hectare that raises their incomes above a free market level. (James Fry, 2003)
• Furthermore payments are made for land set aside for conservation purposes.
Economic sustainability
• Oil palm expansion at expense of rubber and cocoa (66%) and logged over forest including belukar, alang alang areas and native slash and burn sites (34%).
• MPOA in engaging in on-going dialogue with WWF-Malaysia on potential partnerships in areas of biodiversity enhancement and wildlife protection.
Environment Sustainability
MALAYSIA FORESTS AND OIL PALM PLANTATIONS-- keeping the perspectivekeeping the perspective
Environment Sustainability• Soil conservation – Legume Cover Crops
(LCC), terracing, platforming, bunding, silt pits
• Water conservation – drainage system, terraces, water conservation pits, rainwater harvesting.
Environment Sustainability• Integrated Pest Management (IPM) –
bagworms, Rhinoceros beetle, rodents
• Nutrient balancing
• Fresh fruit bunches (FFB) evacuation –tractors, mini-tractors, mechanical buffaloes, wheel barrows, drought animals
Environment Sustainability• Waste recycling – stems and stem chips,
EFB, effuent, clinker, totally renewable energy from burning of shell and fibre
• Pollution control – land application; Dept. of Environment (DOE) limits on emissions and effluents
Environment SustainabilityFragile soils:-- peat: subsidence control, compaction- acid sulphate soils: drainage control- slopes: contour planting, terracing,frond placement
• Social and human well being in a relative national context (within Malaysia-subscribed UN and other supra-national bounds).
• MPOA members operate within ambit of national and state social equity laws.
• Legal ownership of tenure, annual licences and fees• Coexist with and enrich neighbourhood communities
Social sustainability
• Employment ordinances and labour laws; Collective Agreements with Unions or local Consultative Councils and other guides
• Immigration Acts and guidelines
• Contributions to state pension funds
• Productivity-linked earnings
Social sustainability
• Official guidelines on housing, amenities, recreation facilities and places of worship
• Within ambit of national education laws and service
• Native Customary Rights through state protection
• OSH regulations, Poisons Act
Social sustainability
MPOA’s Initiatives on Sustainability
- MPOA ENVIRONMENT COMMITTEE,- MPOA ENVIRONMENTAL CHARTER,
- EXPLORING PARTNERSHIP WITH WWF(M),-DOCUMENTATION OF BEST MANAGEMENT
PRACTICES,-ENVIRONMENTAL AWARENESS
CAMPAIGNS
Johannesburg’s NGOs Global Concerns• Poverty and hunger• Poor food distribution;
- excess in West, hunger in LDCs• Increasing urbanisation• Rural unemployment• Lack of agricultural development• Misdirection of FDI• Destruction of tropical forests
Palm Oil and Johannesburg’s concerns
• Palm oil has provided largest and fastest increase in world food supplies
• Palm oil provides total calorific need of >250 million people, enriches diet of 3 billion people.
• Any other agriculture would require 4-10 times more land conversion, larger loss of forest.
• Contra-cyclic rural employment • Rural wealth generation • Long-term investments• GMO-free• Trans-fat free
Roundtable on Sustainable Palm OilA business initiative of Anglia Oils/Aarhus, Golden Hope Plantations Berhad,
Migros, Malaysian Palm Oil Association (MPOA), Sainsburys and Unilever in cooperation with WWF
