Malaysia, palm oil

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Malaysia and Indonesia are major players in the palm oil supply chain, expressing 85 percent of global production. We have already written something about the international operations of the Malaysian giants, related to the palm business. Also denouncing the misleading propaganda of tropical fat carried out by Malaysia’s booth at Expo Milano 2015. Let us now try to take a closer look at the current situation in this area of Southeast Asia.

The global palm oil business

WWF (World Wild Life) has published a list of everyday consumer goods made with extensive use of palm oil. A list that surpasses imagination, as it includes not only a multitude of food products-including those for children-but also household cleaners, creams soaps and shampoos, lip glosses, biodiesel and aviation fuels.

At least 163 categories of products are made through the use of palm oil and its derivatives. Among them, 82 percent fall under food products (1) and the remaining 28 percent in different categories, such as those mentioned above. It is therefore, beyond doubt, a colossal business. Not comparable in breadth of use to any other source of fats or even to petroleum derivatives (with which palm also competes). No wonder, then, that Big Palm pursues its interests regardless of anything else, even on the lobbying front.

Palm oil, colonialism and neo-colonialism. Indonesia

The history of palm oil has its roots in European colonialism of Africa and the Indies, and finds relevance again with forms of neo-colonialism exercised by global giants against weaker peoples. In 1848, the Kingdom of Holland brought to Indonesia (then the Netherlands East Indies) the first oil palm plants, originally from central Africa. (2) Shortly thereafter, the first plantations for ornamental use on the roadsides of Deli (North Sumatra, Indonesia) and the start of large-scale palm oil production from 1870 onward. The Industrial Revolution.

Socfin (Société Financiere des Caouchoucs Field Societe Anonyme) – now in the hands of French tycoon Vincent Bolloré, and still at the center of controversy over land grabs aimed at growing oil palm (3) – was founded in 1909 by Belgian pioneer Adrien Hallet, along with one of the scions of the Bunge dynasty. And it was Socfin that was responsible for the profitable start-up of industrial-scale plantations, in Sumatra and Aceh, which in just a few years made Indonesia the leading producer of palm and palm kernel oils.

Malaysia assumed global leadership on palm in 1957. (4) And it took over vast plantations in Indonesia in the mid-1990s, when President Suharto was forced by the IMF(International Monetary Fund) to offer the plantations to foreign investors. (5)

Since the fall of Suharto in 1998, Malaysian investors have had an easy hand in buying up land in Indonesia at bargain prices. To the point that today 45 Malaysian investors effectively control more than 2 million hectares of Indonesian palm crops–of the total 11.5, still growing (6)–including through joint ventures and corporate mergers. (7)

Palm oil and Malaysia, between yesterday and today

In 1870 the UK government brought the first palm plants for ornamental use to the then British Malaya.

Sime Darby & Co-a group that is still the subject of several complaints of land robbery related to palm plantations (8)-was founded in 1910 by William Middleton Sime, Henry d’Esterre Darby and Herbert Milford Darby. Since its inception, the company has been dedicated to the cultivation of oil palm and the trade of related fruits. Socfin in turn established the first industrial-scale nursery(breeding center) in Kuala Selangor, Malaya, in 1911-1912.

In 1957 Malaysia, as noted (see previous section), achieved dominance over world palm production. In the years to follow, plantations were expanded considerably, and the Ministry of Agriculture established the Palm Oil Genetics Laboratory, in collaboration with West African researchers. In 1963 the autonomous governments of Sarawak and Borneo-where cultivation has been and still is further developed as a result of land grabbing and deforestation of rainforests-as well as Singapore were recognized.

In 1979, the Malaysian Agricultural Research and Development Institute (Mardi), under the influence of large palm producers, established the Palm Oil Research Institute of Malaysia, now the Malaysian Palm Oil Board. The industrial development strategy thus focused on this production, which attracted foreign investors and labor force from neighboring countries.

In 2000, the increasing devastation of peatland forests-with serious impact on the environment and the health of the people-then prompted the government to take some safeguard measures. Perhaps timid measures, which nonetheless spurred the Malaysian giants to move into new territories of conquest, in Southeast Asia as in Central Africa and Central and South America.

Malaysia is now the control room of the global palm business. On the commercial side-where Bursa Malaysia is the platform of choice for Crude Palm Oil Futures (FCPO)-and the regulatory side. Given that, since 2008, Kuala Lumpur has hosted the annual meetings of the Codex Alimentarius Commission charged with setting and updating international reference standards on oils and fats for human consumption. (9)

This explains the doggedness of the lobbyists who also in Italy, on behalf of Malaysia, are intervening on all fronts to counter initiatives to raise awareness of the international crimes that are still taking place to maintain and expand the productions of this tropical fat. Land robbery, deforestation of virgin forests, greenhouse gas emissions, widespread use of neurotoxic pesticides banned in palm oil destination countries, slavery (10) and child labor exploitation.

Dario Dongo

Notes

1) As defined by reg. EC 178/02, Article 2

2) Precisely, two of the stems planted in the Bogor Botanical Garden (Indonesia) came from Bourbon (Mauritius), the other two from the Hortus Botanicus in Amsterdam)

3) V. https://news. mongabay.com/2015/06/coordinated-protests-hit-socfin-plantations-in-four-countries/, https://www.farmlandgrab.org/post/view/27006

4) Production in Indonesia had first dropped dramatically during the Japanese occupation from 1942 to 1945. In 1957 the Sukarno government ordered the manu militari expropriation of foreign-owned plantations. Entrusting their management-with poor results in terms of productivity-to the military, Buruh Militer, Military Workers)

5) The offer of the domestic palm industry to international investors was the quid pro quo granted by President Suharto to the IMF-in the fateful Letter of Intent (LOI) at the time-to get the deficit that recurred on an annual basis covered. Until the irreparable economic meltdown that ended the ‘Suharto era’

6) Indonesia meanwhile, since 2008, has regained global leadership in palm oil production

7) According to Mahendra Siregar, head of The Investment Coordinating Board of the Republic of Indonesia/Badan Koordinasi Penanaman Modal, foreign investment-Malaysia, Singapore, China, Europe, the U.S.-on the palm supply chain reached 92 percent of the total foreign investment in the country, in 2012

8) See, for example, https://www.farmlandgrab.org/post/view/21381

9) Codex Committee on Fats and Oils (CCFO).

10) See an eloquent video, at https://www.youtube.com/watch?v=TmwvHf0nM7E