Success Business Fund

It was more than a decade since the Malaysian Palm Oil Board (MPOB) took over the task of nurturing the national palm oil industry. Since then, many battles against those who question the value of palm oil on health grounds have been won.

But fresh fires are being lit by palm oil detractors, who have shifted their focus onto the environment battlefront. Now these efforts play on the populist sentiments surrounding ozone depletion, global warming and the resultant climate change.

The very existence of palm oil plantations is being questioned for its alleged contribution to species and biodiversity loss, with the carving out of plantations purportedly impacting the future of wildlife in their jungle habitats.

This undue attention has moved to the orang utan, whose love-able features, apparent childlike innocence and helpless vulnerability have turned the primate into a valuable mascot with which to attack palm oil.

Palm oil first attracted opposition from competing fats due to its popularity and dominance in the food and oleo-chemical sectors. In the 1980s, this manifested itself in several “anti-palm oil” campaigns mounted in the United States, centered on blocking its importation.

More seriously, concerns were raised on the purported link between palm oil and saturated fats in raising blood cholesterol levels.

This persisted despite studies that proved otherwise. Science has shown that palm oil, unlike trans fatty acids found in other oils, addresses concerns over cholesterol levels linked to rising incidence of heart diseases. All these myths and outright untruths have been debunked by research, which has forced the palm oil opponents to open up a new battlefront, shifting the focus to the environment.

In the UK, concerted efforts are being taken by environmentalists to keep out television and print advertisements extolling the “sustainable” credentials of Malaysian palm oil. The Malaysian Palm Oil Council (MPOC) which has the task of promoting the market expansion of Malaysian palm oil and its products has found this to its cost.

Its television advertisements were banned by the UK Advertising Standards Authority in May last year while an advertisement in the Economist magazine – the first in a planned series of advertorials in major magazines – was banned in September.

Facing up to these powerful “anti-palm oil” forces is the MPOB. It has, among others, been given the task of steering the orderly growth and development of the industry.

About to enter its second decade, the MPOB has shown itself up to the task. It has put up stout resistance and fought its corner strongly to elevate palm oil’s standing. It has been unrelenting in using facts to overcome prejudice and overturning outright falsehoods spread by opponents.

Its adversaries, however, are equally unrelenting in their efforts. Helpless against the force of facts as to palm oil’s health and nutritional qualities, they now ride the environment hobby horse to peddle a new anti-oil palm mantra.

Against this background, the world’s leading palm oil luminaries meet in Kuala Lumpur for the International Palm Oil Congress or PIPOC 2009 to be held in Kuala Lumpur on (9-12 Nov).

The four-day conference will focus on progress, achievements and advances made by the industry; taking cognizance of the need to balance growth with environment concerns for sustainable development.

MPOB Chairman Datuk Sabri Ahmad believes the conference will enhance palm oil’s prospects, having detected a positive shift in what was formerly entrenched opposition to palm oil due to a combination of ignorance and self-interest.

Having recently returned from a palm oil promotion mission to the US, Sabri says the policy of engagement rather than confrontation has allowed for better dissemination and acceptance of information sympathetic to palm oil.

“There’s a lot of disinformation out there and we were able to dispel various myths and long-held prejudices. This has resulted in better understanding from industry leaders whose products and services would otherwise have missed out on the advantages offered by palm oil,” he said.

Sabri says having won the argument on the health and nutrition front, the process has to be repeated on the environment front. “We have various potential consumers in the US who support anti-palm oil legislation, having been swayed by erroneous claims of palm oil’s impact on sustainability. Uncontested, these claims can stick and be very difficult to remove,” he says.

PIPOC 2009 is being seen as an appropriate stage to demonstrate palm oil’s sustainability. To drive home the message, MPOB Director­ Generai Datuk Dr Mohd Basri Wahid has coined a new word — “ecologies” — which will be used as the theme for the conference. “Palm Oil — Balancing Ecologies With Economics” features prominently in the publicity material and brochures produced in the run-up to the conference.

One of the objectives set for PIPOC 2009 is to draw up strategies towards enhancing sustainability, which will form the thrust of the efforts towards countering opposition mounted by the environment lobby.

This environment-friendly agenda comes at a time when the industry has taken on board the Roundtable on Sustainable Palm Oil (RSPO) initiatives, which came into force in 2004. RSPO seeks to promote the growth and use of sustainable palm products through credible global standards and engagement of stakeholders with the involvement of all parts of the supply chain.

This gives the roundtable nature of the group, which is reflected in the union of stakeholders from seven sectors of the palm oil industry, which include producers, processors/traders, consumer goods manufacturers, retailers, banks and investors, environment/nature conservation non-­governmental organizations (NGOs) as well as social/development NGOs.

Sustainable palm oil takes into account the plantation operational chain, its impact on the environment and biodiversity, as well as social and community factors. Factors for consideration include virgin forest encroachment, the mixing and application of fertilizers, and worker welfare.

To achieve this, the palm oil industry and planters have been urged to adopt new technologies for sustainable production. They need to take on an environment-friendly approach to maintain their competitive edge and to position the country’s palm oil industry on a sustainable footing.
“The sustainable production of palm oil through certification and fulfilling of principles and criteria of RSPO as well as the adoption of the Palm Oil Industry

Code of Practices all along the palm oil value chain is vital for the industry to remain viable and competitive,” says Mohd Basri.

The issue of sustainability is being complemented by the voluntary application of MPOB’s Code of Practice developed by its Food Safety Committee with input from industry members. According to him, this is an anticipatory move that prepares and assists the industry to conform to global food laws governing healthy ingredients, dietary inputs and hygiene standards.

One of MPOB’s greatest achievements has been its success in commercializing technologies. The fruits of research and development (R&D) done in its labs by its army of scientists are geared to be translated into technologies that can be implemented by industry to produce innovative products and services. Mohd Basri says Malaysian companies and entrepreneurs are encouraged to exploit business opportunities by commercializing the technologies developed.

Far from operating as a mere academic hothouse, MPOB has been in the forefront of commercializing its R&D findings. “We released more than 400 R&D findings last year, which are all ready for commercialization. Some 30% of our R&D efforts are geared towards this goal. Our research efforts do bear fruits,” he says.

The MPOB has produced more than 44o technologies and 71 services that cover the whole gamut of the upstream, midstream and downstream aspects of the palm oil industry. “We strive to transfer this technology to industry players who are in a position to commercialism its applications,” he adds.

Both the MPOB and the researchers share in the commercial success by way of a share in the royalties, which have been known in some cases to be very lucrative.

“This reward system is only fair and necessary if we are to retain the best brains to improve our products and services which ultimately brings with it a higher level of productivity for the industry,” says Mohd Basri.

In fact, one company that collaborated with MPOB to improve oil palm milling operations was able to cut labor from 7o down to 12, bringing with it significant savings. He adds that MPOB has also introduced many palm oil seeds, fertilizers, bio-diesel, harvesting machines, oil-palm based car components, vitamin E and other technologies spanning the entire oil palm supply chain.

Mohd Sabri says MPOB is intensifying collaboration with universities as far away as London, Beijing and Denmark to enhance its research efforts. It also invites scientists from all over the world to interact with its own academic complement of 200 researchers for an annual conference next April.

According to him, Malaysian agricultural practice in general and the palm oil industry in particular have been governed by laws and regulations that make the latter viable and sustainable long before initiatives like the RSPO came about.

He says the palm oil industry was among the first to apply scientific research, strict licensing and proper registration for its orderly development.

“We value palm oil as a golden heritage not only for Malaysia but for the world. Rest assured, the custodianship of this asset is in good hands,” he says.