Alarm bells for oil palm, timber
Published on: Friday, April 03, 2020
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File photo from Bernama.
Kota Kinabalu: The palm oil industry hopes plantations and mills in six districts on the east coast will be allowed to resume operations while the timber sector faces millions in losses if no special permission is granted to export ready shipments during the current Movement Control Order (MCO) period.

Both want the State Government to act urgently to save the situation that has arisen due to the Covid-19 outbreak. 

Kuala Lumpur Kepong Berhad (KLK) said it hopes the State Government would consider the appeal by Malaysian Palm Oil Association (MPOA) and Malaysian Estate Owners Association (MEOA) on the matter

The State Government had earlier decided to extend the closure of oil palm operations to three additional districts in the State, resulting in a shutdown of a total of six districts which account for approximately 75pc of Sabah’s Crude Palm Oil (CPO). 

KLK said it understands and shares the objective of the State Government to introduce measures to curb the spread of Covid-19 in Sabah.

However, it believes most plantation companies have already put in place robust Standard Operating Procedures (SOPs) coupled with various other preventive measures following the MCO.

The Plantation Industries and Commodities Ministry had also given its approval for the industry to resume operations as the National Security Council (NSC) had concurred that it is as an essential service.

 “We urge the State Government to allow the industry to resume operations…the industry operates in an open environment with workers employed in large fields where physical distancing can be enforced and is a norm. In addition, an estate management has full control over its premises which could further assist the State Government in enforcing the MCO,” it said.

 It said various precautionary measures implemented by KLK to curb the spread of Covid-19 include:

 (a) Restricting visitors into the plantation unless for official business and conducting body temperature checks;

 (b) Daily health and body temperature monitoring and provision of personal protective equipment (PPE) such as masks, soaps and hand sanitisers;

(c) Disinfection of common areas in the plantation;

(d) Educate all workers on preventive measures with posters and videos on handwashing technique, social distancing and emergency contacts are made available in various languages;

(e) Medical facilities such as clinics manned by medical assistants;

(f) SOPs to regulate and check on compliance with MCO regulations;

(g) SOPs for suspected Covid-19 cases or close contact – voluntary self-isolation/quarantine centre, send for Covid-19 testing if showing symptoms and disinfection exercise to mitigate the risk of Covid-19; and

(h) SOPs for confirmed cases and voluntary lockdowns.

 Besides, it said even within this short period of recent closure, workers have been getting restless.

 “If they remain idle for a prolonged period they may start to congregate to overcome their boredom and ignore the practices of social distancing. 

 “It would also be more difficult to convince them to stay if they, as basic salary earners, leave to seek for better opportunities during the closure of operations.

 “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. 

The Sabah Timber Industries Association (STIA) is appealing for special permission to export ready shipments, failing which they risk losing millions. 

Its President Chua Yeong Perng said this is vital to avoid the value and quality of the logs deteriorating on weekly basis. 

He said shipment of ready goods, controlled movement of perishable raw material (felled logs) and systematic re-starting of manufacturing will go a long way in improving the industry’s ability to maintain and pay its workforce. 

“STIA estimates approximately 120 containers worth RM9-10 million of products at the port and at various factory locations that that have been held back. 

“In fact, there is approximately 100,000 -120,000 m3 of felled logs, valued between RM35-45 million, sitting idle due to the MCO,” he said.

 STIA expects, overall, these felled logs would have lost at least between 15 and 20 per cent of its inherent value and certain non-durable species that have lost nearly all its commercial value by now. 

 Besides, downstream mills are now faced with the critical problem of wood adhesives expiring. 

“If partial production is not permitted over the next few days, it is estimated 964 MT (963,000kg) of plywood and woodworking adhesives will need to be disposed of.  

“The value of adhesives and the disposal cost will come to between RM5 and RM8 million. There is also a concern that Sabah may not have the facilities to dispose of such quantities in such a short time frame.

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 STIA is extremely concerned that the combination of the above factors will ultimately impact the industry’s short term ability to pay employees’ wages for April and the months after.

 In the event the MCO is extended beyond April 14, 2020, STIA suggested the government allows for certain upstream and downstream activities to commence. 

It cited Sarawak and Johor which have permitted scaled down manufacturing operations.

 “If remedial action is not taken during and after MCO, the repercussions would be irreversible for the industry players in Sabah,” Chua said. 

 “The timber sector currently has approximately 30,000 fulltime employees and between 5000 – 10,000 piecemeal or part-time workers. Majority of the players would struggle to sustain existing payroll commitments following implementation of the MCO period.

“At least 50 per cent of the workforce in the upstream and downstream sector will be facing job security risks,” he said.

 “Due to the inherent remote location of timber factories and logging camps, most companies have between 30 and 40 per cent of its workforce residing in quarters within factory premises or logging camps. 

“By default, workers quarters act as a quarantined area since entry and exit is restricted and controlled by security personnel. 

“Since implementation of MCO, companies have proven to have successfully controlled and monitored the welfare conditions of workers staying in company quarters,” he said.

With companies executing additional safety measures (PPE distribution, temperature check and personnel medical monitoring), Chua said the risk of infection for this segment of the workforce is extremely low. 

Therefore, Chua said consideration should be given for these workers to be allowed to start working as soon as possible without delay.

He said authorities could allow movement of raw material and manufacturing to progressively startup within timber clusters (Keningau, KKIP, Ladalam, Kimanis) that are not deemed a high risk area (hot/red zone).

 “STIA feels it is necessary that the State Government consider making minor changes to the current MCO. This will at least allow the industry to help itself in the interim,” Chua said.



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