Setting a good example

Tuesday April 29, 2008 The Star Online

Setting a good example
A plantation firm undergoes checks to verify that its operations are green.

By HILARY CHIEW

HAVING palm oil production as its core business surely invites the microscope on Sime Darby Bhd’s corporate behaviour, especially now with heightened awareness of the crop’s environmental and social impacts.

However, the country’s biggest public-listed plantation company – after the merger exercise involving Sime Darby, Guthrie and Golden Hope last year – is ploughing ahead with certification of its operation under the first global initiative for sustainable palm oil, the Roundtable on Sustainable Palm Oil (RSPO).

With a total planted area of 329,470ha in Malaysia and 195,856ha in Indonesia, Sime Darby is aiming for 10 SOU (standard operating unit) certificates by June. (A SOU refers to one mill and its contributing estates.) Of the 10, eight will be from Malaysia and two from Indonesia. It plans to obtain certification for the remaining 55 mills, in stages, by 2010.

To obtain the green certificate, companies must adhere to the eight principles and 39 criteria set out by RSPO. The more stringent requirements include no further clearing of forests for expansion and no displacement of indigenous communities without consultation and compensation. Sime Darby hopes to be the first plantation company to be certified.

Long before RSPO came into the picture, sustainable agriculture practices had already been explored in Sime Darby plantations, especially within Golden Hope Plantation Bhd. For example, Golden Hope introduced the zero-burning technique in 1989 which was subsequently adopted as the industry standard for replanting.

Instead of torching the land, the company has the old palms shredded mechanically, placed in trenches and left to decompose. This is not only good for the environment but it makes business sense, too. Unlike the open-burning technique, young saplings can be planted immediately without having to wait for the burning to be completed. The zero-burning technique also eliminates the threat of forest fires, especially in peat swamp areas.

Sustainable agriculture
Sime Darby senior vice-president II Syed Mahdhar Syed Hussain says sustainable agriculture is carried out in two other field operations: soil management and integrated pest management.
Role model: Sime Darby senior vice-president II Syed Mahdhar Syed Hussain concedes that open burning is illegal and zero-burning is in line with the country’s laws.

To prevent soil erosion and loss of fertility, leguminous cover crop (LCC) is introduced. These crops not only improve soil structure but fixes nitrogen in the air to further enrich the soil. They also reduce the use of harmful herbicide to control weeds that flourish quickly in fallow land. Besides taking care of the soil, these plants provide nectar to insects like the rhinoceros beetles, which combat pests. For bigger pests like rats, barn owls are encouraged to propagate in estates. Owl nests, costing RM380 each, are placed on every 10 ha of land.

Sustainable practices also extend to the fleet of machines and vehicles in Sime Darby’s sprawling estates. A bio-diesel trial started in February and plans are afoot to gradually introduce bio-diesel as transport fuel. In terms of energy use, Syed Mahdhar claims that all mills are 100% energy-sufficient as they use biomass generated within the estate.

Palm oil mill effluent and empty fruit bunches, previously sources of water
pollution and the greenhouse gas methane, are now captured and converted into nutrients, generating a new source of revenue for the company. At four of its mills – two in Sabah and one each in Sarawak and Pahang – empty fruit bunches and mill effluent are composted.
“We are working towards sequestering 500,000 tonnes of carbon dioxide-equivalent emission by 2012,” Syed Mahdhar declares.

Sime Darby believes that the sustainability of its businesses is linked with the sustainability of the ecosystems surrounding its operations. Hence its sustainable initiatives go beyond the boundaries of its estates. It supports these conservation projects: RM740,000 for research and environmental educational programmes to protect the plain-pouched hornbill of Belum-Temenggor forest in Perak with the Malaysian Nature Society; RM2mil to cultivate five million seedlings of forest species with private nursery Perniagaan Tunas Harapan, to be used to create forest corridors within its estates; RM30,000 for Reef Check Malaysia’s Adopt a Reef programme; and RM25mil over 10 years for reforestation of Ulu Segama Forest Reserve in Sabah.