What good can come out of palm oil?

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By Alvin Ung

United Plantations - Carl Bek-Nielsen

As I drove off the North-South Highway and entered the Lima Blas estate owned by United Plantations, I couldn’t help thinking: “Here I am, going behind enemy lines.”

Globally, many environmental NGOs have declared that oil palm companies are public enemy No. 1 for destroying tropical forests, killing endangered species, uprooting local communities, exploiting lax governance, and generating greenhouse gases.

Locally, millions of Malaysians and Singaporeans have breathed in deadly toxins from the haze, partially caused by hot spots in industrial plantations in Sumatra.

Heavy machinery is used to transport the palm fruits to the refinery via the rail system.Heavy machinery is used to transport the palm fruits to the refinery via the rail system.

Personally, I recalled when the WWF invited me on a boat to see tracts of forest being cleared for oil palm cultivation. In 1998, the Worldwide Fund for Nature (WWF) was campaigning to gazette forests along the Kinabatangan river that supported pygmy elephants, orangutans and proboscis monkeys. At that time, I remembered seeing jungle that stretched from horizon to horizon. Ten years later, when I returned to the same area, nearly everything had been replaced by a sea of oil palms. The rate of deforestation was staggering.

So, can any good come out of this large-scale monoculture crop?

I can see why oil palm is necessary. The plant yields more oil per hectare than any major oilseed crop. Once planted, the tropical tree can produce fruit for more than 30 years, providing jobs for poor rural communities and smallholders. FELDA is one such success story.

The world needs it. The oil is used for cooking, cosmetics and biofuel. Fifty percent of the world’s packaged goods contain palm oil. It’s in shampoo, ice cream, lipstick, chocolate, cereals, potato chips, canned soups and baby formula. Oil palm is a crucial crop for Malaysia and Indonesia, who export more than 80% of the world’s oils and fats.

But the world’s demand for palm oil meant that between 1967 and 2000, the area under cultivation in Indonesia expanded from less than 2,000 square kilometres to more than 30,000 square kilometres, the Economist reported. I myself saw the before-and-after effects in Malaysia. And yet how could some leading figures in Malaysia’s palm oil industry have the chutzpah to claim that palm oil does not lead to deforestation?

Palm seeds are carefully sorted and packed for the nursery. These seeds are sold to other plantations who require high quality seeds for their plantations. United Plantations research facility consistently works on improving the quality of their products through rigorous testing and improvements. All seeds at United Plantaions are NOT GMO.Palm seeds are carefully sorted and packed for the nursery. These seeds are sold to other plantations who require high quality seeds for their plantations. United Plantations research facility consistently works on improving the quality of their products through rigorous testing and improvements. All seeds at United Plantaions are NOT GMO.

It was with these thoughts that I first met and greeted the chief of United Plantations, Carl Bek-Nielsen. He asked me what I thought about palm oil. And I told him exactly how I felt.

“I am truly concerned that the oil palm industry will one day receive a tattoo on our forehead. That’s a tattoo that we can’t go to the sink and wash off,” he said gravely, referring to the novel “The Scarlet Letter” where its protagonist, Hester Prynne, was forced to wear a letter “A” on her dress as a badge of dishonor.

One night, as we waited for dinner to be served in Carl’s modest home in Jendarata estate, Perak, Carl and his brother Martin fretted about an August report published in Bloomberg Businessweek which said there was evidence of fraud, human trafficking and violence against workers on plantations owned by Kuala Lumpur Kepong, the world’s fifth largest palm oil producer. (A KLK spokesman replied that the workers involved were not employed by KLK but had been outsourced to a third party contractor.)

Carl Bek-Nielsen talks about the history and evolution of palm at the Jendarata plantation.Carl Bek-Nielsen talks about the history and evolution of palm at the Jendarata plantation.

“It hurts me here,” Carl said, thumping his heart, “when KLK is attacked because we are all painted with the same brush. It’s wrong that the industry is given a sentence before independent bodies can objectively assess the validity of the accusations.”

KLK, just like United Plantations, is a member of the Roundtable on Sustainable Palm Oil which is represented by environmental NGOs and businesses in the palm oil trade. The RSPO was an initiative of WWF, who set high standards for sustainable palm oil. If applied fully, it could make palm oil the world’s most eco-friendly options for vegetable oils. The problem, however, is that some RSPO members are working sustainably while others are using it merely to divert criticism.

While oil palm companies were voluntarily policing themselves, Carl lamented that green activists in Europe, US and Australia were adversarial toward the palm oil industry, which flourishes mostly in Malaysia and Indonesia. “There must be a level playing field. Most agricultural fraternities should also be exposed to the same principles and barriers as the palm industry. There should be no discrimination,” he said.

“Are we then brushing aside the concerns raised by environmentalists?” I asked.

“Not at all. Our industry needs to do much more in accepting and acknowledging the responsibility of caring for the environment and local societies,” Carl said, as he vigorously stirred a lime juice drink, before passing the glass to me.

“There are two ways you can run a plantation,” he added. You can be a black sheep and think only of short-term profits. Or you can choose to do it in a sustainable, social and environmental way. We have a duty not to forget the people.”

A renewal energy bio-mass plant at United Plantations, Jendarata.A renewal energy bio-mass plant at United Plantations, Jendarata.

Wonderful words, I thought to myself, but what’s it like in reality?

As I walked past the kitchen in Carl’s home, I greeted the domestic helper who has served Bek-Nielsen family for several decades. From the corner of my eye, I spied the stainless steel kitchen counter that she was using to prepare food for us. I did a double take. These were the same kind of stainless steel countertops and cabinets I saw in the homes of the UP workers whose homes I visited earlier in the afternoon. That was truly remarkable.

According to the UP annual report, the Bek-Nielsen family and UIEL Group hold a 47.40% stake in UP stock, which makes Carl and Martin wealthy indeed. Yet the brothers have ensured that they and their workers share some basic amenities.

Most of the drugs used in UP’s clinics and hospitals are original, not generic, drugs. “If the medicine is not good enough for my workers, it’s not good enough for me,” Carl’s father used to say.

We drove by the kindergarten where Carl used to study with other plantation children. Nearby was a sign that said “UNITED PLANTATIONS BERHAD OLD FOLKS HOME.”

United Plantations also provides homes for their retired staff who have been with the company. This gentleman has served United Plantations for over 40 years and now lives in the home for the aged on the plantation.United Plantations also provides homes for their retired staff who have been with the company. This gentleman has served United Plantations for over 40 years and now lives in the home for the aged on the plantation.

“Can we visit?” I asked Carl. After a pause, he said, “Sure.”

The retirement home has a well-kept monastic quality to it. We headed straight to the bathrooms. They were almost as clean as the bathroom I used in Carl’s house. The community room has Astro cable channels on a plasma television.

“These are the people who have given all their lives to UP,” Carl told me as he spoke in Tamil to Naraidu Mathar, 72, who worked at the plantation from 1952 to 2010. He knew all 17 people there and greeted most of them by name. “If we can’t give back something to them, there’s something wrong with us,” Carl said.

This attention to detail and people has paid off for UP. Plantation analysts have noted that UP spends more for employees compared to other plantation companies, and yet UP also has the lowest production cost for each tonne of palm oil.

Weeks later, I emailed Ku Kok Peng, director of Palm Oil & Rubber NKEA at PEMANDU, for a national perspective on my visit to UP.  “Your United Plantations experience is actually reflective of how most plantation operations are done in this country: productivity-driven and responsible,” he said. “Most palm oil cultivation is done on former rubber and logged over land, and we do not clear forest to plant anymore. At the same time, we must be entitled to use our land for create economic return especially for our smallholders, who account for 40 per cent of our total hectarage.”

Water buffalo is still used to transport oil palm from the field to the rail carts. Buffalo are said to have better efficiency and much less maintenance. These buffalos have been used on the Jendarata plantation since the 1920s.Water buffalo is still used to transport oil palm from the field to the rail carts. Buffalo are said to have better efficiency and much less maintenance. These buffalos have been used on the Jendarata plantation since the 1920s.

“It’s not enough to say we contributed millions to social causes and biodiversity,” Carl said, as we discussed oil palm companies that give to CSR programmes and rainforest initiatives. “You can’t think that issuing a check for a good cause can clean you up like going to a confession booth. You have to show you want to clean up your own backyard.”

At the end of my time behind enemy lines, I realized I genuinely liked United Plantations and its blue-eyed chief. There were still plenty of reasons to be wary of the industry and its players. But my perception of Carl Bek-Nielsen had changed: from skepticism to respect, and from enemy into friend.

“Living on the plantation is a real joy and privilege,” Carl told me before I drove off. “You must live on the plantation one of these days.”

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