Billions at stake in palm oil battle over orang-utans

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The Straits Times

14 March 03

 

 

Billions at stake in palm oil battle over orang-utans

Malaysia fears a campaign pushing plantations' environmental threat will

rock

key export industry

 

 

By Reme Ahmad

 

 

MALAYSIA is worried about the economic impact of a campaign by Western non-

governmental organisations (NGOs) seeking protection for orang-utans whose

habitat, they say, is being threatened by oil palm plantations.

 

 

The groups claim that forests in the region are being cleared to make way

for

bigger palm plantations, thus reducing the orang-utans' habitat.

 

 

 

While the campaign's main focus is Indonesia, Malaysia is affected as its

territory includes the orang-utan's habitat on the Malaysian part of Borneo,

and local firms are expanding plantations into Indonesian territory.

 

 

The Malaysian government has expressed its concern the campaign could affect

consumer perception on palm oil.

 

 

The palm oil industry is a money-spinner and top foreign-exchange earner for

Malaysia. About 90 per cent of the commodity is exported, bringing in

foreign

exchange earnings of over RM19 billion (S$8.75 billion).

 

 

'We are not guilty but we have to be pro-active. We have to show to the

world

that we are not clearing virgin forests and converting to oil palm,' said Mr

M.R. Chandran, chief executive at Malaysian Palm Oil Association, an

influential group of palm growers.

 

 

'What we are going into are over-logged forests. We can't say it is

equivalent

to a natural forest in terms of biodiversity but it provides a forest

cover,'

he said in an interview.

 

 

It is easy to understand why officials are worried about the campaign's

effect

on the industry with 3.67 million hectares under plantation - about 10 per

cent

of Malaysia's land area.

 

 

The industry provides jobs to 350,000 people. Of 11.9 million tonnes of palm

oil produced last year, 10.8 million tonnes was exported to 140 countries.

 

 

Primary Industries Minister Datuk Seri Lim Keng Yaik has said a 'smear

campaign' was being waged against thepalm oil industry and Malaysia would

oppose any move linking trade with environmental issues.

 

 

Last year's average price of RM1,363 per tonne could rise by up to RM150

this

year because output is set to increase only slightly while demand remains

strong, said Mr Chandran.

 

 

Government officials are banking on palm oil and petroleum exports to make

up

the shortfall from the sales of electronics components abroad.

 

 

But the campaign to save the orang-utans is also compelling.

 

 

Says the US Balikpapan Orangutan Society: 'Palm oil plantations are a huge

problem for orang-utans, both in Indonesia and Malaysia, as entire forests

are

taken down to make way for the plantation,' it said in its website

(www.orangutan.com).

 

 

Some industry officials are accusing rivals of masterminding the campaign,

including possibly soy bean growers.

 

 

They said a campaign some years ago claiming that soy bean was healthier to

consume than palm oil had failed, forcing rivals to mount the orang-utan

campaign.

 

 

'It tried to pressure us by creating negative perceptions of our palm oil

industry,' said an official at a government-backed palm agency.

 

 

'This is a new campaign carried out by the NGO to enable the rival industry

to

compete worldwide.'