This article first appeared in The Edge Financial Daily on March 13, 2018 - March 19, 2018

KUALA LUMPUR: Plantation development agency Felcra Bhd should explain its alleged sale of palm oil products at below the minimum rate endorsed by the Malaysian Palm Oil Board (MPOB), says an opposition lawmaker.

Bukit Mertajam member of parliament (MP) Sim Chee Keong said that based on two sets of invoices he had sighted, the practice occurred in two business dealings between Felcra and a third party in 2015 and 2017.

“In the two invoices referring to sales in 2015 and 2017, the oil extraction rates (OERs) applied were 14.5% and 14%.

“According to the MPOB oil palm fruit grading manual, the minimum OER applicable for Peninsular Malaysia is 18%, whereas for Sabah and Sarawak it is 18.5%,” said Sim in the Dewan Rakyat yesterday.

Sim said that according to MPOB, Malaysia produced 19.02 tonnes of palm oil per hectare in 2013. “This is equivalent to around four million tonnes produced in 2013,” he said.

Based on the total production volume in 2013, the alleged OER used by Felcra against the minimum rate allowed by MPOB would have cost Felcra scheme participants RM150 per tonne, or RM595.3 million, in each of the two years, said Sim.

Sim also pointed to similar cases previously — in 2010, the Federal Land Development Authority (Felda) was instructed by the Federal Court to pay RM11 million to Felda settlers in Kemahang for OER fraud.

He urged the government to form a special parliamentary committee to investigate the oil and kernel extraction rates used in both Felda and Felcra.

State-owned Felcra was known as the Federal Land Consolidation and Rehabilitation Authority before its corporatisation in 1997.