John Hartmann
Jeanne Stampe
Bustar Maltar
KUCHING: Malaysia and Indonesia should cease competing against each other on palm oil production and focus on market demand by improving their reputation around the world.
Cargill Tropical Palm Holding Pte Ltd (Cargill) chief executive officer John Hartmann, in giving this advice, stressed that both countries should focus on generating greater awareness and knowledge of the industry to consumers.
“Because of the increasing demand of palm oil internationally, I don’t see the (point for) competition between Malaysia and Indonesia.
“What is more important is for both countries to work together in a way that will increase demand around the world. As I have said, there is a need for us to improve our reputation so that we can serve our customers around the world into the future,” Hartmann told The Borneo Post on the sidelines of the 2nd Singapore Dialogue on Sustainable World Resources – “Sustainability: A new Profit Driver?” here recently.
He added that what was most important in the industry was to ensure there was robust demand for the product.
“Oil palm players must improve their credibility so as to tackle the negative perception of the crop among consumers and improve sustainability, such as eliminating deforestation from the supply chain, especially on peat soil.
“There is also a need to avoid exploitation of people and how to make people thrive, be they living in communities or are your employees. Reputation is important to keep, especially at the international level.”
Hartmann stressed that the world needed palm oil, and palm oil should respond to this demand.
“It does not require deforestation to be able to accomplish this, but by using new initiatives and yield intensification. Work with smallholders so that they can become more productive.”
Cargill currently has two refineries in West Malaysia, and it has plans to expand to Sarawak. It employs some 18,000 workers in Indonesia, especially in Sumatra and West Kalimantan. It operates some 80,000 hectares of oil palm plantations and another 40,000 hectares under smallholdings.
On another issue, Hartmann pointed out that in the palm oil industry, harvesters were considered as the most important component and the most difficult to recruit.
“For us, we try to have the right facilities for them. Say, if they have families, they would be living in a community. So, we have to provide housing, schools and medical facilities. Those are important parts to retain and attract harvesters.”
Meanwhile, non-governmental organisations (NGOs) such as World Wide Fund for Nature (WWF) and Greenpeace believed that technology and efficiency could be applied to improve yields for palm oil production.
“Improve yields through technology and efficiency to boost productivity, especially among smallholders. There is no need for any more deforestation that can endanger animals to extinction in the efforts to feed the increasing population in the world,” said WWF Asia Finance and Commodities Specialist Jeanne Stampe.
She stressed that WWF was “not against palm oil, but, in fact, we are pro palm oil”.
“Our view is that palm oil is the highest yielding edible oil seeds. If we don’t use palm oil, then we have to use other oils that require three, four or five times the amount of land to produce the needed oil.
“We do see palm oil in resolving the problem of oils that the world is facing, except that it has to be grown in a more sustainable way.”
Stampe stressed the need for banks in Malaysia to build their capacity and understanding to be more aware of the environment and conservation.
“There’s no point to talk about butterflies and tigers to banks if they don’t have the mechanism to handle environmental issues, as they are not environmentalists.”
Greenpeace Head of Forest Campaign Global Forest Network (Indonesia), Bustar Maltar, stated that their role was to stop oil palm companies from continuing deforestation as both Indonesia and Malaysia had one of the last remaining rainforest in the world.
“We will tell palm oil buyers such as Wilmar International and Cargill that if producers do not comply with sustainable land use, they (buyers) should stop buying from them.
“There are still lots of room for improvement as the yield is not high yet. In some cases, the yield is only five tonnes per hectare. That’s low, compared to those who can achieve eight tonnes per hectare. With the latest technology, they can easily improve the yield,” he said.
Bustar pointed out that many cultures, such as those in Borneo, were related to the environment.
“If you take our environment away, then you are also taking our culture away too.”