Tuesday June 25, 2013
Eight Malaysian-owned firms under Indonesian haze probe
Commodities Talk - By Hanim Adnan
THIS week all eyes will be on how Indonesia and Malaysia, the world's top two largest crude palm oil (CPO) producers, deftly tackle the issue on haze currently polluting the air over Singapore, Malaysia and Indonesia.
The crux of the thick smoke haze problem is the rampant open burning in Riau and Jambi, Sumatra carried out by planters to make way for new planting and replanting of oil palm.
While Malaysia had openly criticised Indonesia for its land-clearing method via the rampant “slash and burn” for oil palm cultivation, Indonesia then retaliated by claiming that the culprits for the open-burning were mostly subsidiaries of Malaysia-based plantation companies.
Generally, over 50% of oil palm plantations in Sumatra, Kalimantan and Sulawesi belongs to Malaysian planters either via long-term concession or joint ventures.
To stop the finger-pointing, Datuk Seri G. Palanivel, the newly appointed Environment and Natural Resources Minister will be in Jakarta tomorrow to meet representatives of Malaysian-owned plantations there and, also hold discussion with Indonesia's Environment Minister Balthasar Kambuaya.
Balthasar announced late last week that 14 companies had been identified and were being probed for open burning.
Of the total, eight are Malaysia-owned namely PT Langgam Inti Hiberida, PT Bumi Rakksa Sejati, PT Tunggal Mitra Plantation (PTTMP), PT Udaya Loh Dinawi, PT Adei Plantation, PT Jatim Jaya Perkasa, PT Multi Gambut Industri and PT Mustika Agro Lestari.
Hence, when the issue of open burning is linked to Malaysia's top plantation giants like Sime and KLK, one may wonder on the practice of “zero-burning” policy which are widely advocated among major local plantation companies.
In fact, zero-burning oil palm replanting technique was first introduced commercially by Sime Darby as far back as 1985.
Since then, zero burning has been made compulsory for all oil palm replanting activities in Malaysia through legislation whereby the traditional way of establishing new oil palm plantations or replanting via burning of old oil palm biomass are strictly prohibited.
The Government has also imposed a ban on open burning in 1998 and offenders will have to pay a maximum fine of up to RM500,000.
However, while Malaysian planters may strictly abide by the open burning ban here given the hefty penalty, some observers say there exist some “irresponsible” local planters who tend to overlook the zero-burning policy especially when their estates are located deep in the jungles of Kalimantan or Sumatra with minimal supervision from the relevant authorities.
On the other hand, both Sime Darby and KLK had reiterated on their strict practice of zero-burning policy.
Sime Darby while acknowledging the fact that its PTTMP concession area is one of the many hotspots identified but it is unable to exert control over the activities of local communities beyond its operating areas.
In Indonesia, it is quite common among farmers between June and September to undertake open burning for oil palm replanting at their small estate holdings, which are often adjacent to estates owned by big plantation companies.