Sarawak NCR land - a new development model

News article, 29 Aug 2011: "Felcra-like model to develop native land in S'wak"
Sarawak has introduced a new land management system modelled after Federal Land Consolidation and Rehabilitation Authority (Felcra) Bhd to develop Native Customary Rights (NCR) land in the state..... According to state land development minister Tan Sri Dr James Masing, the pilot project involving the new land management model was carried out in Pasai Siong, near Sibu......"The agreement with Felcra was reached in June this year. This is the first time we used this model on the NCR land management. This model has been used by Felcra in other land areas under the Ladang Rakyat scheme, but this is the first time it was applied to NCR land.... "This is because, to develop NCR land, you need the consent of landowners. Felcra will manage this pilot project with a fee for 15 years," he said.... under the new land management model, NCR landowners would hold 90% shares, with the remainder to be held by Sarawak Land Custody Development Authority (LCDA). Felcra will source all the funding required and will only charge management and marketing fees.... (source: http://thestar.com.my/news/story.asp?file=/2011/8/29/nation/20110829111929&s)

Khor Reports comments:
a) This is a promising new proposal for NCR land development in Sarawak. This is an advancement from the Sime Darby land deal proposals in FY2009, where the plantation sought a 60% stake, while offering the native landowners 30% and LCDA/Pelita 10%.
b) Previously, oil palm land deals have been in the eastern state of Malaysia have been problematic in their general poor inclusion of native landowners. Such issues are exemplified in the IOI Pelita case where a secondary land purchase has been bogged down by controversy from the initial land deal.
c) This suggests that any plantation should be concerned about the level of inclusion of local and native peoples in their current and existing projects. This "social agenda" is likely to become a significant issue for plantations.
d) Investors in plantations might become more keen to ask plantation companies to better disclose such risks, as well as the conservation / environmental usability and risks of their land banks.

Also view: http://khorreports-palmoil.blogspot.com/2011/04/native-customary-rights-ncr-issues-at.html

Behemoths' land banking efforts stutter?

"Sime Darby’s expansion into Liberia may have hit some road blocks. It was reported that citizens from more than 15 towns and villages near Sime Darby Plantation in Grand Cape Mount County have threatened that the company would face stiff resistance if it intends any further extension of its concession. Not yet known at this point is the size of the area affected as portion to Sime’s 200,000ha concession land." (ECMLibra research report, 18 July 2011)

Khor Reports comments:

a) SE Asian plantations have taken a great interest in West Africa, Papua and other 'tougher' regions, to extend their land banks. Various problems have been reported with these major expansion efforts.

b) Sime Darby is reported facing some resistance from locals in Liberia (article above). The plantation behemoth had also sought to extend its interests in Sarawak, Malaysia, by offering larger stakes to local landholders - but we hear that some of these efforts may have gone 'on hold' for various reasons.

c) Golden Agri is also looking to develop 220,000 ha in Liberia via the USD1.6 billion deal with Golden Veroleum (the land area was initially reported as a 500,000‐acre palm oil plantation in the southeast of the country).3 September 2010: Golden Agri said its “subsidiary Golden VerOleum would form a partnership with the Government of Liberia in a palm oil project… for the cultivation of sustainable palm oil by the company and by Liberian smallholders and farmers, mill processing and value‐added manufacturing…The investment is expected to total USD1.6 billion” (source: http://www.reuters.com/article/2010/09/03/goldenagri‐liberia‐idUSSGC00373720100903). In October 2010. Golden Agri reported it disposed of its entire shareholding comprising one share of HK$1 in Golden Veroleum Limited. A clear status update is needed.

d) Sometime in 2009‐2010, Golden Agri’s “in progress” acquisition of 1 million ha in Papua falls through. Now, players like Wilmar are looking to Papua for major cane sugar projects. Will they have a happier outcome in the low-lying and seawater-flood prone region?

Cargill goes RSPO but keeps smallholders in

Cargill has announced that the palm oil products it supplies to its customers in
Europe, United States, Canada, Australia and New Zealand will be certified by the
RSPO and/or originated from smallholder growers by 2015. This commitment will
be extended across all Cargill's oil and trading businesses to cover 100% of its palm
oil products and all customers worldwide – including China and India – by 2020.

Khor Reports comment:

Cargill includes the smallholder element with the “and/or” flexibility for its sourcing. This seems a tacit acknowledgment that RSPO may have problems including smallholders in its efforts to a significant degree. With Greenpalm certs just bouncing off a meager $1 per unit, it seems hard for smallholders to see monetary compensation for their RSPO certification efforts, unless an attractive program for them is launched soon. The biggest concern we have had with regard to RSPO is its de facto limited inclusion of independent smallholders thus far. We think Cargill’s move is pragmatic and heartening in terms of keeping market access open for these smallholders.

Malaysia criticizes "sinister" campaign against palm oil

The Malaysian Insider reports: “It is utter cruelty to the orang utans. The zoo must understand these are animals from the tropics and adequate protection should be given to them during winter. Their enclosures must be warm and made comfortable,” (Tan Sri Yusof Barison, head of the Malaysia Palm Oil Council) was quoted as saying..... Yusof was reported as saying that he suspects having the orang utans in such degrading captivity was to win public support in Australia in the campaign against the use of palm oil products.... He said having anti-palm oil signs at the zoo was to win public sympathy and to misrepresent the orang utan issue.... “Australians must visit our orang utan sanctuaries in Malaysia and see how well the animals are taken care of. There is something sinister behind the campaign by western NGOs to ruin the palm oil industry,” he said. (Source: http://www.themalaysianinsider.com/malaysia/article/palm-oil-council-chief-upset-over-orang-utan-treatment-in-aussie-zoo/)

Khor Reports comment: The orang utan is a key symbol of the campaigns by NGOs for the sustainable growing of palm oil i.e. without deforestation, peat land development and loss of biodiversity.