This article first appeared in The Edge Financial Daily on April 3, 2020
KUALA LUMPUR: Singapore-listed vegetable oil company Wilmar International Ltd and plantation player Kuala Lumpur Kepong Bhd (KLK) have chimed in with their pleas to the Sabah government, asking the state to reconsider the closure of palm operations in six districts, saying the move has potential adverse socio-economic ramifications.
This came a day after FGV Holdings Bhd and Sime Darby Plantation Bhd added their voice to appeals made by the Malaysian Palm Oil Association and Malaysian Estate Owners Association to the Sabah government, following Sabah Chief Minister Datuk Seri Mohd Shafie Apdal’s announcement that palm oil operations in Kalabakan, Semporna, Kunak, Tawau, Lahad Datu and Kinabatangan will be halted until April 14 to control the spread of Covid-19. These six areas account for 75% of Sabah’s palm oil production. Sabah is the largest palm oil producing state in Malaysia.
In a statement, Wilmar — PPB Group Bhd’s associate and its largest profit contributor — said while it understands the concerns of the Sabah government and applauded the state’s efforts to contain the spread of Covid-19, it noted that the local workforce in these six areas are highly dependent on the continuous operation of the palm oil industry.
“An estimated 100,000 workers are directly affected by the closure. Thus, ensuring the availability of continuous financial and job security is essential, especially under these troubling circumstances,” it said.
The group also highlighted that there is a looming food crisis at home in Malaysia and abroad due to the severe disruptions in supply chain and logistics.
So, while the government has enforced measures to address food security concerns and deemed palm oil refineries an essential service, the irony is that the closure of oil palm estates and mills will have a direct impact on the ability of refineries to operate. Consequently, this will impact the supply of food products and cooking oil, which are essential items.
As such, Wilmar said it is seeking to engage with the Sabah government to reconsider its decision, and to allow oil palm plantations and mills to resume essential and critical operations — namely harvesting, crop evacuation and milling operations.
KLK, meanwhile, argued that the industry already operates in an open environment with workers working in large fields where physical distancing can be enforced and is the norm. “In addition, estate management has full control over its premises which could further assist the state government in enforcing the movement control order (MCO),” it said in a separate statement.
The enforced idleness is already causing its workers to get restless, it said. Should they remain idle for a prolonged period, they may start to congregate to overcome their boredom and ignore social distancing practices, it said.
It will also be more difficult for KLK to convince them to stay if they seek better opportunities during this closure. “This could potentially create a sea of drifting unemployed workers that could defeat the whole purpose of the MCO and expose the wider community to a higher risk of Covid-19 infection,” it said.
Both Wilmar and KLK assured that they have robust standard operating procedures in place to help curb the spread of the virus, should any of their workers be infected.