MALAYSIAN PALM OIL

AND CONSERVATION

EFFORTS

23rd May 2012

Dato’ Seri Utama Shahrir Abdul Samad

Malaysian Palm Oil Board

European Association of Zoos and Aquaria, 2012

PRESENTATION OUTLINE

1. Malaysia: An Introduction

2. Importance of Palm Oil to Malaysia

3. Malaysia’s Economic Transformation

4. Conservation Efforts in Malaysia

4. Conclusion

Malaysia: An Introduction

Malaysia: Facts & Figures

• Area: 329,847 km 2

• Population: 29.2 Million (July 2012 est)

• Per Capita Income: US$ 8,937 / EU 6,980 (2011)

• GDP: 5.2% (2011)

Source: Economic Report 2010/2011, Ministry of Finance Malaysia

Malaysia: GDP by Sectors

Gross Domestic

Product

Value

( RM Mil)

Share

( %)

Agriculture 43,238 7.1%

Mining &

Quarrying

41, 835 6.9%

Manufacturing 164,107 27.1%

Construction 18,975 3.1%

Services 336,609 55.6%

TOTAL 604,764 100%

Components of Malaysia’s Exports 2011

Source: http://www.matrade.gov.my

Malaysia: Top 10 Major Export

Products, 2011

Source: http://www.matrade.gov.my

RANKING:

1. Electrical &

Electronic

Products

2. Crude &

Refined

Petroleum

Products

3. LNG

4. Palm Oil &

Palm Oil

Products

Importance of Palm Oil to

Malaysia

Global Producers of Palm Oil (000 tonnes)

Countries 2009 2010 2011

Indonesia* 20,900 22,000 23,900

Malaysia* 17,566 16,993 18,880

Thailand* 1,310 1,450 1,530

Nigeria 860 885 900

Colombia 765 750 965

Ecuador 448 360 460

Others 3,260 3,180 3,494

Total 45,108 45,618 50,129

Source: Oil World Dec 2011, January-December 2011 Total Production

*South East Asia (2010)

47.7%

37.7% 88.4%

3.05%

Oil Palm –

the most

productive

oil crop

Oil Crop Production

(million t)

% of total

production

Total area

(million ha)

% of total Area

Oil palm

(PO + PKO)

50.85 39.0 13.44 2.9

Soya bean 41.48 32.2 104.2 59.4

Rapeseed 23.66 18.4 33.09 18.9

Sunflower 13.18 10.25 24.55 14.0

Source: Oil World 2011

* Combined tonnage of palm

oil and palm kernel oil

Avg. Oil Yield (t/ha/yr)

Average Oil Yield for Major Crops

Source: Oil World 2011

Total Planted Area of Oil Palm in Malaysia

(million hectare)

Source: Malaysian Palm Oil Board

Government halted new forest land conversion for agriculture, including oil palm

Land Use Change

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

1990 2000 2002 2004 2006 2007 2008 2009 2010 2011

Million Ha

Government halted new forest land conversion for agriculture, including oil palm

Land Use Change

Area

(1 mil ha)

Year

1990 2010

Oil Palm 2.029 4.854

Rubber 1.836 1.029

Coconut 0.313 0.11

Cocoa 0.393 0.020

Malaysian:Total Area Under

Selected Crops

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Oil

Pa

lm

Ru

bb

er

Co

co

nu

t

Co

co

a

Crop

Are

at

1990

2010

MILL

HOUSING

NURSERY

FOREST

RESERVE

SCHOOL &

KINDERGARTEN

SPORTS

COMPLEX

REPLANTS

CLINIC

CRECHE OIL PALMS

Desa Talisai Estate, Sandakan, Sabah – IJM Plantations Bhd

TRAINING

FACILITY

From Cocoa to Oil Palm

Total Hectarage: 4.854 mil hectares (2010)

FELDA 16%

Private Estate 60%

RISDA 2%

FELCRA 4%

State Schemes 7%

Smallholders 11%

Private Estate FELDA FELCRA RISDA State Schemes Smallholders

MALAYSIA

Smallholder Farms: ~40% of Oil Palm hectarage

15

Oil Palm & Household Incomes

Source:

1 Maklumat Asas Felda 2009 (published)

2 MPOB Data

3 Economic Planning Unit (EPU), Tenth Malaysia Plan and Mid-Term Review of the Ninth Malaysia Plan

Note: *PGK for Peninsular Malaysia

Year Felda Settler1 Independent

Smallholder2

National Poverty

Line (PGK)3

2006 RM 1,338

~ US$ 429 RM 476

~ US$ 153

RM 526

~ US$ 169

2007 RM 2,221

~ US$ 712 RM 1,209

~ US$ 388

RM 740

~ US$ 237

2008 RM 3,278

~ US$ 1,051 RM 1,094

~ US$ 351

RM 691

~ US$ 221

2009 RM 2,457

~ US$ 788 RM 944

~ US$ 303

RM 666

~ US$ 213

2010 RM 3,000

~ US$ 962

RM1,259

~ US$ 404

RM 720

~ US$ 231

Oil Palm & Its Importance to Malaysia

• The livelihood of 1.5 million people is dependent on the palm oil industry

• Raised rural incomes above the national poverty line.

Narrowing income gap between urban and rural,

Improving quality of life for rural population,

• Important export revenue for Malaysia ( 4th largest export by value)

• Palm oil downstream sector provides new growth opportunities for green energy, oleo derivatives, food & health based segments

Malaysia’s Economic

Transformation (2010-2020)

The New Economic Model has identified the right

framework to drive Malaysia to achieve high

income nation…

High

Income

Sustainability Inclusiveness

Meets present

needs without

compromising

future generations

Target USD

15,000-20,000 per

capita by 2020

Enables all

community

benefits from the

wealth of the

country

Palm Oil National Key Economic Areas (NKEA): 8

Entry Point Projects (EPPs)

(USD11.03 billion) (USD4.67 billion)

Malaysia’s Economic Transformation Programme

(2010-2020)

Land Matters:

• National Land Code 1965

• Land Acquisition Act 1960

Environmental Matters:

• Environmental Land

Conservation Act 1960 revised in

1989

• Quality Act 1974 (Environmental

Quality) (Prescribed Premises)

(Crude Palm Oil) Regulation 1977

• Environmental Quality (Clean Air)

Regulation 1978

• Environmental Quality

(Prescribed Activities)

(Environmental Impact

Assessment) Order 1987

Labour and Employees Matters:

• Labor Law

• Workers’ Minimum Standard of Housing & Amenities Act 1990

• Occupational Safety & Health Act 1977

• Factories & Machinery (Noise Exposure) Regulations 1989

Pesticide Use:

• Pesticides Act 1974 (Pesticides Registration) Rules 1988

• Pesticides (Licensing for sale & storage) Rules 1988

• Pesticides (Labeling) Regulations 1984

Wildlife Matters:

• Protection of Wildlife Act 1972

MPOB licenses all critical activities of the Malaysian Palm Oil Sector and

enforces its orderly conduct

A Highly Regulated Industry

MPOB’s Codes of Practice

1. Code of Good Nursery Practice for the Oil Palm Nurseries (Mandatory from June 2012)

2. Code of Good Agricultural Practice for the Oil

Palm Estates and Small Holdings

3. Code of Good Milling Practice for Palm Oil

Mills

4. Code of Good Refining Practice for Palm Oil

5. Code of Good Crushing Practice for Palm

Kernel Crushers

6. Code of Good Practice for the Handling,

Transport and Storage of Products from the

Oil Palm

7. Code of Good Practice for Bulking Facilities

MPOB’s Codes of Practice for the Oil Palm

Supply Chain

Conservation

Efforts in Malaysia

Malaysian Palm Oil Wildlife

Conservation Fund (MPOWCF)

• Launched in 2006

• RM20,000,000

– RM10 million from the

Malaysian palm oil industry

– RM10 million as grant from the

Malaysian Government

• MPOWCF welcomes donations

& grants

• Matches third party funding on

a 1:1 basis

Government-Industry

Collaboration

Malaysian Palm Oil Wildlife Conservation Fund

(MPOWCF)

List of MPOWCF Programmes Since 2007

No. Project Status

1 Establishment of a Jungle Patrol to protect wildlife in forest reserves

bordering OP Plantations

Completed

2 Tabin Wildlife Reserve Completed

3 Diversity of Ground Vegetation in OP Plantations Completed

4 Orang Utan Island Infant Care Unit (Bukit Merah, Perak) Completed

5 Biodiversity conservation study on ox-bow lakes in OP Plantations Completed

6 Survey of orang utan population in Sabah Completed

7 Orang Utan Conservation Colloquium 2009 On-going

No. Project Status

8 Satellite-tracking, population dynamics, ecology and conservation of

Bornean Banteng in Sabah

On-going

9 Establishment and operation of the Sabah Wildlife Rescue Centre

(WRC)

On-going

10 Wild Asia-Biodiversity for Plantation Managers On-going

11 Malua Biobank Joint Conservation Efforts On-going

12 Borneo Elephant Sanctuary, Sabah On-going

13 Sarawak Orang Utan Conservation Programme On-going

14 Borneo Elephant Wildlife Sanctuary (BEWS) Up-coming

Sabah Wildlife Conservation Colloquium January 2012

Jointly Organised by Sabah Wildlife Department (SWD), Malaysian Palm

Oil Council (MPOC), Borneo Conservation Trust,

Danau Girang Field Centre & HUTAN

Government-Industry-NGO

Collaboration

Distribution of Orang

Utan Population in

Borneo

The most recent estimates

place the population at about

11,000 individuals in Sabah

(Ancrenaz et al. 2005, Alfred et

al, 2010)

Lower Kinabatangan-Segama Wetlands Intertidal forested wetlands, Forested peatlands, Non-forested

peatlands

Ramsar Site: 1849, Designated: 28 October 2008, Total Area: 78,803 ha

Kinabatangan Biodiversity Corridor

Existing

Ramsar

Site

PROGRAMME GOALS:

1. To establish a transparent platform to ensure consultation could be carried out among local government, local community and oil palm developers

2. To establish support system in land acquisition through ground truthing to assess status of biodiversity and wildlife corridor to secure biodiversity corridor

3. To develop funding mechanism in order to support restoration programme of riparian reserve and other wildlife corridor, including monitoring

4. To develop and integrate the management plan to re-establish ecological corridor enforcement programme

Estimated (Private Land): 4,038.72 Acres

Estimated Total Cost for Land Compensation: RM 48,464, 628

(USD 15,960,687.63 )

Zoos & In-Situ Conservation in

Kinabatangan

Conservation is an Integral Part of

Development S

ab

ah

Deve

lopm

en

t C

orr

ido

r

Conclusion

The Future

• Malaysia’s New Economic Model balances higher

income with inclusiveness and sustainability

• Malaysia’s ETP seeks to maintain palm oil’s importance

in its economic and social development

• Conservation is integral to sustainability

• Opportunity for in-situ conservation

• Collaboration of all stakeholders to turn opportunity into

reality- the creation of the Kinabatangan Biodiversity

Corridor!

THANK YOU

‘If orang utans go extinct in the wild, paradise is gone. And we

will never have it again’.

Birute Galdikas,

New York Times 21 March 2000