Burning palm oil issue fuel for thought
MC WongPublished: Apr 20, 2001 5:27 AM | Updated: Jan 29, 2008 10:21 AM
According to Primary Industries Minister Dr Lim Keng Yaik, the government has ordered national power firm Tenaga Nasional Bhd (TNB) to use palm oil to "reduce the current excess stockpile which has contributed to its lower price".
The price of palm oil rose slightly from a low of RM642 per tonne in mid-February to RM855 per tonne in mid-March but slumped again to around RM800 per tonne.
TNB is expected to burn some '50,000 tonnes a month from April 2001 until palm oil reaches a price where it is at a par with the soya bean oil price'.
According to Primary Industries Minister Dr Lim Keng Yaik, the government has ordered national power firm Tenaga Nasional Bhd (TNB) to use palm oil to "reduce the current excess stockpile which has contributed to its lower price".
The price of palm oil rose slightly from a low of RM642 per tonne in mid-February to RM855 per tonne in mid-March but slumped again to around RM800 per tonne.
TNB is expected to burn some '50,000 tonnes a month from April 2001 until palm oil reaches a price where it is at a par with the soya bean oil price'.
The finance ministry will provide subsidies to power stations and factories using palm oil as fuel. It will not burden the national utility company, according to the minister.
Lim dismissed a comment in a financial newspaper article that the move by TNB to use palm oil as fuel for its power plant might have an impact on the company's bottom line and might increase TNB's fuel cost as crude palm oil prices were more expensive than the medium-fuel oil (MFO), the type of fuel use for boilers and generators.
He made such comment due to worries of the impact on TNB share prices on the stock market. "We will not ask TNB to sacrifice its business, we just ask them to use another fuel for the same purpose at no extra cost to the utility company. So, please don't you go and cause the share price of TNB to fall," he said.
Not logical
The palm oil industry is heavily subsidised especially in the large estate plantations from the acquisition of land, fuel uses during operations, production of chemicals and other inputs and the processing and transporting of the product.
In the process, the industry externalised environmental and social costs such as soil degradation, water source contamination, bio-diversity loss, air pollution, community displacement, eroded indigenous rights, labour exploitation and worker's health threats. The end product is unable to compete with other kinds of edible oil such as soya bean due to over-production and supply. It is further subsidised when this food oil is burned as fuel.
Is this logical? What kind of cost-benefit analysis is applied? Do we have any ethical concern?
Would it not be wiser to save the depletable fuel consumed by the oil palm industry to be used in other more prudent ways such as production of other essential foods? Why can't we protect the community and environment from destruction while at the same time conserve some of the natural resources for future or optional use?
The state government of Sarawak should review its ambitious joint venture oil palm schemes especially those targeted at 1.5 million hectares of native customary rights (NCR) land under a new land bank concept.
The schemes started four years ago in 1997 and involved converting over 100,000 hectares of land in the Long Lama and Kanowit areas. The project is facing growing resistance from NCR landowners. Increasingly, the land disputes arising directly and indirectly from such schemes have intensified and in Sarawak, indigenous communities continue to be forced through untold and unnecessary hardship and sufferings.
There are already several severe cases documented, and among them are the death from a gun-shot fired by paramilitary police force to the head of an Iban man from Bakong in the Miri Division for defending the communities' homeland from the oil palm scheme and the death penalty awaiting 11 Ulu Niah Ibans from Rumah Busang and Rumah Bali should they be convicted of the murder charge laid against them after the death of four when defending their homeland.
Only temporary
The Malaysian government has allocated RM600 million to finance replanting activities as part of the package to alleviate hardship in the oil palm sector and to check the production. The stockpile of crude palm oil has stayed at around 1.5 million tonnes since November 2000.
As it is the government's desire for Malaysia to remain as the world's largest palm oil producer, the production for this year would be expected to be at 11.2 million tonnes. Lim said a replanting scheme covering 200,000 hectares and the use of palm oil as an energy source would push prices to RM900-950 a tonne - close to soya bean's price.
However, the move is seen as a short-term measure that gives only a temporary boost.
Sabah-based Incorporated Society of Planters chairman Emerson Liau Yong Hwa thinks that such an effort does not address the issue as a whole as it does not benefit the planters in Sabah and Sarawak since the plantations in the both states are younger than 25 years old. He pointed out that when the new replanted oil palm trees mature in three years time, the whole depressed prices scenario will be repeated.
He suggested that the government should concentrate more on diversifying and maximising land use, rather than focusing on the replanting of oil palm per se.
Wasteful energy
By using palm oil for peninsular Malaysia's energy consumption, do consumers have any choice if they do not want to be associated with using power generated from a 'fuel' that is tainted with so much destruction and even blood? Do consumers have any say in such matter or is it strictly dependent upon the whims and fancies of the federal government in dictating to the supposedly corporatised energy giant?
No longer can Malaysia champion the starving world when it burns food oil to produce wasteful energy in order to stabilise the market price of palm oil.
It is worth to note that palm oil is an edible oil, a food source and is turned into fuel energy while a massive number of people in the world are still suffering from hunger.
Is Malaysia demonstrating a new form of social injustice and inequality?
MC WONG has been involved with community development for over two decades and is currently with Sibu-based NGO Ideal (Institute for Development and Alternative Living). Wong holds an MSc degree on Environmental Management at London University.
The price of palm oil rose slightly from a low of RM642 per tonne in mid-February to RM855 per tonne in mid-March but slumped again to around RM800 per tonne.
TNB is expected to burn some '50,000 tonnes a month from April 2001 until palm oil reaches a price where it is at a par with the soya bean oil price'.
The finance ministry will provide subsidies to power stations and factories using palm oil as fuel. It will not burden the national utility company, according to the minister.
Lim dismissed a comment in a financial newspaper article that the move by TNB to use palm oil as fuel for its power plant might have an impact on the company's bottom line and might increase TNB's fuel cost as crude palm oil prices were more expensive than the medium-fuel oil (MFO), the type of fuel use for boilers and generators.
He made such comment due to worries of the impact on TNB share prices on the stock market. "We will not ask TNB to sacrifice its business, we just ask them to use another fuel for the same purpose at no extra cost to the utility company. So, please don't you go and cause the share price of TNB to fall," he said.
Not logical
The palm oil industry is heavily subsidised especially in the large estate plantations from the acquisition of land, fuel uses during operations, production of chemicals and other inputs and the processing and transporting of the product.
In the process, the industry externalised environmental and social costs such as soil degradation, water source contamination, bio-diversity loss, air pollution, community displacement, eroded indigenous rights, labour exploitation and worker's health threats. The end product is unable to compete with other kinds of edible oil such as soya bean due to over-production and supply. It is further subsidised when this food oil is burned as fuel.
Is this logical? What kind of cost-benefit analysis is applied? Do we have any ethical concern?
Would it not be wiser to save the depletable fuel consumed by the oil palm industry to be used in other more prudent ways such as production of other essential foods? Why can't we protect the community and environment from destruction while at the same time conserve some of the natural resources for future or optional use?
The state government of Sarawak should review its ambitious joint venture oil palm schemes especially those targeted at 1.5 million hectares of native customary rights (NCR) land under a new land bank concept.
The schemes started four years ago in 1997 and involved converting over 100,000 hectares of land in the Long Lama and Kanowit areas. The project is facing growing resistance from NCR landowners. Increasingly, the land disputes arising directly and indirectly from such schemes have intensified and in Sarawak, indigenous communities continue to be forced through untold and unnecessary hardship and sufferings.
There are already several severe cases documented, and among them are the death from a gun-shot fired by paramilitary police force to the head of an Iban man from Bakong in the Miri Division for defending the communities' homeland from the oil palm scheme and the death penalty awaiting 11 Ulu Niah Ibans from Rumah Busang and Rumah Bali should they be convicted of the murder charge laid against them after the death of four when defending their homeland.
Only temporary
The Malaysian government has allocated RM600 million to finance replanting activities as part of the package to alleviate hardship in the oil palm sector and to check the production. The stockpile of crude palm oil has stayed at around 1.5 million tonnes since November 2000.
As it is the government's desire for Malaysia to remain as the world's largest palm oil producer, the production for this year would be expected to be at 11.2 million tonnes. Lim said a replanting scheme covering 200,000 hectares and the use of palm oil as an energy source would push prices to RM900-950 a tonne - close to soya bean's price.
However, the move is seen as a short-term measure that gives only a temporary boost.
Sabah-based Incorporated Society of Planters chairman Emerson Liau Yong Hwa thinks that such an effort does not address the issue as a whole as it does not benefit the planters in Sabah and Sarawak since the plantations in the both states are younger than 25 years old. He pointed out that when the new replanted oil palm trees mature in three years time, the whole depressed prices scenario will be repeated.
He suggested that the government should concentrate more on diversifying and maximising land use, rather than focusing on the replanting of oil palm per se.
Wasteful energy
By using palm oil for peninsular Malaysia's energy consumption, do consumers have any choice if they do not want to be associated with using power generated from a 'fuel' that is tainted with so much destruction and even blood? Do consumers have any say in such matter or is it strictly dependent upon the whims and fancies of the federal government in dictating to the supposedly corporatised energy giant?
No longer can Malaysia champion the starving world when it burns food oil to produce wasteful energy in order to stabilise the market price of palm oil.
It is worth to note that palm oil is an edible oil, a food source and is turned into fuel energy while a massive number of people in the world are still suffering from hunger.
Is Malaysia demonstrating a new form of social injustice and inequality?
MC WONG has been involved with community development for over two decades and is currently with Sibu-based NGO Ideal (Institute for Development and Alternative Living). Wong holds an MSc degree on Environmental Management at London University.
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