KOTA KINABALU: The Malaysian Estate Owners’ Association (MEOA) is appealing against the new Covid-19 standard operating procedures (SOPs) for the oil palm sector in Sabah.
In a statement issued by MEOA, it mentioned that the SOPs will have a negative domino effect on Sabah’s palm oil supply chain.
The association claims that the new and standard mandatory SOP measures announced by Local Government and Housing Minister, Datuk Seri Panglima Masidi Manjun in a statement issued Oct 20, would include the oil palm sector in Sabah.
Under the new SOPs, the oil palm sector will be allowed only 50 percent of its workforce capacity in attendance (for those employing more than 10 workers).
The sector will also have to enforce shorter 12 hours working time from 6 am to 6 pm in Sabah, the statement said.
“This is expected to include the upstream oil palm plantations (including the smallholders and estates), mid-stream palm oil mills, downstream activities including refineries and other supporting services which includes transportation services,” the statement read.
MEOA warned that if the new SOPs are rolled out, Sabah may end up in a ‘lose-lose’ situation and called for a balance between combating the Covid-19 infection and economic sustainability of the oil palm sector.
“MEOA is very appreciative that the State of Sabah with all its assets and human resources, especially the valued frontliners, has the best intentions and is doing its utmost efforts to stave off Covid-19. It is interesting to note that many people are not able to appreciate the coverage of the arduous efforts needed for Sabah per se which has a landbank size nine times that of Selangor State in Peninsular Malaysia.
“However, the Sabah State government also needs to appreciate the uniqueness of the oil palm plantation sector, the isolated locations of plantations, the sector’s supply chain, and particularly socio-economic aspects of the sector arising from its rural nature. These aspects differentiate the sector from other business operations that are within confined factories or buildings and often closer to urban townships,” explained the statement.
Hence, MEOA is appealing to the Sabah government to review its recent new SOPs which will likely adversely affect the State’s palm oil industry, impacting an oil palm planted area of over 1.544 million hectares, involving over 220,000 employees (excluding their dependents), 132 palm oil mills, 12 palm kernel plants, and 11 refineries.
“The State has always reiterated that there should be a balance between combating the Covid-19 infection and economic sustainability.”
MEOA also urged the State government to consider the implications that can arise from any changes relating to the estimated hundreds of thousands of foreign workers if they are not employed.
“During the first wave of the MCO in March 2020, MEOA along with other planter associations and plantation companies were active in engaging with the relevant authorities in Sabah. The planters provided justifications as to why the oil palm sector should not be shut down, nor be limited by any reduced workers capacity and shorter working hours,” it said.
MEOA also explained why the limitation of allowing only 50 percent of workforce capacity in attendance imposed by the State government in the SOPs should be waived for the sector.
“The normal daily operations in the oil palm plantation are confined to permanent sites, set against large uncluttered landscapes where movement control of both employees and outsiders is strictly enforced.By virtue of the nature of work activities in estates and mills, the workers are by default well-distanced from each other amid this space and the vastness of plantation landscapes.In fact, the distance from one oil palm tree to the next oil palm tree is around 29 to 30 feet or nine meters, more than the present mandatory social distancing of one meter being practiced. Thus, it is safer for the workers to be out in the fields gainfully working. Workers staying at their quarters could readily be enticed, because of the restrictions, to mingle and group together, thus putting themselves and their dependents at higher Covid-19 risk.”
It also explained that the employment labour to land ratio for oil palm plantation in Sabah is one worker to seven hectares.
“This further emphasizes the case to have the full workforce working in the field rather than staying at home.
“In view of this, MEOA would like to appeal to the State government to waive the limitation of having only 50 percent workforce capacity in attendance. Set against the prevailing shortage of skilled workers in the plantation sector, all available workers in place should be allowed to work to better manage Covid-19.”
MEOA also reminded that in the recent resurgence of the new Covid-19 wave in Sabah, all of its members in the state have already implemented ‘voluntary lockdowns’ of their respective operations and all guidelines and SOPs relating to plantation operations under the Conditional Movement Control Order (CMCO) are being adhered to in order to mitigate and stave off the spread of the virus.
“MEOA has also rolled out and shared with the plantation fraternity its SOP for prevention and mitigation of transmission of Covid-19 for the growers in estates, as well as for the palm oil mills and kernel crushing plants. Implementing the present SOPs is still the most effective answer to prevent and mitigate Covid-19 in the oil palm supply chain.”
MEOA also appealed for the extension of the permissible working and processing hours of palm oil mills from the stipulated 12-hour day of 6 am to 6 pm, to the usual hours per day in order to cope with the surge of crop to be processed.
It explained that since the operations of palm oil mills are connected with the estates harvested fresh fruit bunches (FFB), the limit set of 12 hours for processing from 6 am to 6 pm will not be sufficient.
MEOA reminded that Sabah is now experiencing high cropping season presently and that this will result in massive back-logs and long queues at the palm oil mills.
“When FFB production exceeds the amount of crop that can be processed as soon as possible after harvesting and delivery from field to mill, any shortened processing capacity will result in crops rotting in the fields and unmerchantable palm oil and kernels. The perishable nature of crops will have disastrous consequences to the growers, especially the numerous smallholders in Sabah.”
MEOA also stressed that the price of Crude Palm Oil (CPO) now hovers favourably close to RM3,000 per tonne and growers have the opportunity to recoup losses this year and previous years due to depressed CPO prices and crop losses incurred from earlier Covid-19 wave restrictions.
“The State itself will also lose out as Sabah sales tax collected for its treasury from oil palm planters set against the present favourable CPO prices will not materialize – hence a huge lost opportunity. As an illustration, Sabah produces over 5,000,000 tonnes CPO per year (refer to Year 2019). If CPO price averages at RM2,700 per tonne for this year, then with the prevailing Sabah Sales Tax of 7.5 percent, the total sales tax collectable for State coffers can amount to over RM1 billion. There is so much that can be done by the State for its people including mitigating Covid-19. The State should appreciate that there must be a balance between combating the Covid-19 infection and economic sustainability of the oil palm sector.”