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Saturday, February 15, 2014

Wilmar to stop buying CPO from Sarawak


KUCHING: Sarawak may lose some RM400mil in sales tax revenue a year from oil palm products following the refusal of a multinational refinery company to buy crude palm oil (CPO) from mills in the state.
A Singapore-based company, Wilmar International Ltd, which has its refinery in Bintulu, has written to the state government to inform that it would stop buying CPO produced from oil palm trees planted in forest areas and peat swamp land in the state from 2015 onwards.
State Land Development Minister Tan Sri Dr James Masing said the company made known the decision in a letter sent to him on Dec 5 last year.
Masing said he had replied to the letter and had briefed the state cabinet on the matter.
He said the state government would not bow to such pressure from the company.
“If there be a stop in planting of oil palm in forest areas and peat swamp, it would definitely affect the state’s revenue and the 17,578 smallholders in the state as well as some 300,000 people in rural areas who are involved in planting oil palm.”
Wilmar, the first palm oil refinery set up in the state over 10 years ago, buys 45% of the CPO produced by 41 mills in the state. Another 55% are sold to the Senari refinery in Kuching and other mills.
Masing said there were only two areas in Sarawak where oil palm was planted in the forested area and peat swamp soil.
“If we are not allowed to plant on those two areas, then there will be no oil palm planted in Sarawak.
“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 because there is no forest there,” he quipped.
Sarawak has 1.6 million ha of peat swamp and a lot of that area has been planted with oil palm.
Masing said the directive from Wilmar had a disastrous effect on Sarawak because it would stop the state government’s programme on poverty eradication among the rural people. “I believe the company has been pressured by non-governmental organisations in Europe to make such restriction on the state oil palm products. They use environment impact argument but it is actually economic argument.
“They told us not to sacrifice our environment with planting of oil palm in our forest and peat swamp soil and I don’t agree to that because there are no soya bean and sunflowers planted in the Sahara Desert.
“Soya bean and sunflowers are planted in all over Europe and the forest areas are also cut down,” Masing said.
He said the state government was very cautious on how to protect the environment as “we have our own experts to do the job.”
In 2012, sales tax from oil palm was RM4.25mil, a 10.8% of the state’s total revenue in that year, while the sales tax between 2002 and June 2013 was at RM2.16bil, the state minister said.
Masing said the crop contributed RM300mil income to smallholders in the state, adding that every smallholder earns RM3,328 per ha a year. A total of 90,607.30 ha are planted with oil palm in the state.
The state government would find other buyers from abroad, including from China and India, if Wilmar was firm on its decision, he added. — Bernama

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