Planter completes audit for green certification

Monday July 14, 2008 The StarOnline, Malaysia

Planter completes audit for green certification

By HANIM ADNAN

The race to attain the Roundtable for Sustainable Palm Oil (RSPO) full certification is hot on the agenda of Malaysian plantation players, given the rising misconception on sustainability and environmental issues among major importing nations particularly in Europe.

Issues on forest destruction, extinction of rare species and violation of human rights were raised by global buyers from 140 countries.
These issues, spearheaded by European-based non-governmental organisations, have affected the reputation of local oil palm planters and the commodity's long-term marketability.

Datuk Carl Bek-Nielsen (left) and United Plantations executive director, finance and marketing, Martin Bek-Nielsen

Some major importing countries are demanding for the “green” certification from producers like Malaysia and Indonesia as “proof” that palm oil is not harming the environment, wildlife or other natural resources, failing which their market share may be at risk.

To satisfy their requirements, the RSPO – a grouping of global parties involved in the industry – had come up with a common standard to enable consumers to tell the difference between certified and non-certified palm oil.

Analysts contacted by StarBiz concurred that many local plantation companies have adopted good agricultural practices with zero-burning policy over the past 10 to 20 years.

However, in reality, there were many unanswered questions concerning the long-term sustainability of oil-palm plantation practices among growers from Indonesia and Malaysia.

One analyst with a bank-backed brokerage said: “Now, many financial institutions, especially foreign ones, require an environmental and social due-diligence study to be conducted prior to financing facilities”.

Malaysian Palm Oil Board chairman Datuk Sabri Ahmad was recently quoted as saying that Malaysia was ready to supply at least 2.5 million tonnes of certified palm oil to European buyers and the rest of the world.
To date, big plantation groups which have undertaken the RSPO certification assessment include IOI Corp Bhd, Sime Darby Bhd, Kulim (M) Bhd and United Plantations Bhd.

For United Plantations, it is striving to attain the RSPO certification for its 40,000ha estates and six mills in Peninsular Malaysia in the near future.
Vice-chairman and executive director Datuk Carl Bek-Nielsen told StarBiz that the RSPO certification could help counter some of the palm oil smear campaigns and allegations by Western countries' NGOs. Local planters are taking concerted efforts to preserve the environment and biodiversify while developing the palm oil industry.

He said United Plantations was committed towards sustainability in its plantation operations with emphasis on achieving high yields through maximising the productivity of its land bank resources.

United Plantations' administrative centre and workers' quarters at Ulu Basir Estate in Ulu Bernam, Perak.

This is well reflected by its average crude palm oil (CPO) yield per ha, which over the last three years had averaged 5.65 tonnes compared with the national average of 3.8 tonnes, thus helping the company achieve one of the lowest production costs in Malaysia.

Corporate responsibility is another area in which the company stands out, where state-of-the-art housing, hospitals, schools and old folks homes are provided to employees.

Bek-Nielsen said the RSPO certification assessment by the Netherlands-based Control Union Certification on all the business units of United Plantations and its oil mills in Malaysia was completed in May this year.
The conclusion from the independent auditors stated that “following an intensive main assessment, it is the audit team’s recommendation that United Plantations be certified according to the RSPO principles and criteria,” he added.

Bek-Nielsen said: “This is not about being the first. The industry must stand together and help each other to come forward with examples, which can show to the rest of the world that Malaysian planters can live up to the criteria and also surpass them. This is key.”

United Plantations was also the world's first certified producer and processor of sustainably produced palm oil based on the Migros criteria, according to a follow-up audit by Britain-based Proforest.