Sabah leaders taken for ride on oil palm
Published on: Sunday, January 17, 2021
By: John Lo
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1. Failure to discern truth from untruth.

Prevarication [ meaning – a fabricated story or statement, especially one intended to deceive.] when told consistently, frequently over a long period can become accepted as truth even though it is otherwise. This pattern is often reinforced by people who have strong economic power to influence and lobby the right politicians. This is especially so when the listeners, like some Sabah leaders, don’t bother to discern truth from falsehood. In such situation, the economically strong will swallow the weak. This is the situation in the oil palm industry. Sabah has got a bad deal. Time to reset the truth.

2. Untruth No. 1, cannot downstream in Sabah.

Adding insult to injury, the non-Sabahan plantation owners have succeeded in owning more than 90pc of Sabah’s oil palm land, have stubbornly refused to go down stream, exporting CPO from Sabah to their factories elsewhere, especially in EU and China. Netherland is host to most downstream factories owned by Malaysian plantation companies. I don’t mind this if they have given Sabah a fair deal. But they have not. Instead, they have given all sorts of reasons not to locate downstream in Sabah. So much so that our leaders, over the years, have accepted their excuses and have not pressed them to invest in Sabah. They have used CPO from Sabah to industrialise Netherland and other countries. Please read article below re their investment in downstream overseas.

Many excuses have been given, not many can be accepted. But our leaders have chosen to listen to them rather than to set rules for them to, at least, locate some downstream in Sabah. Sabahans must seek answer as to why Sabah is producing the largest volume of CPO and has negligible downstream.


3. Untruth No. 2, no employment for Sabahans cos they are unsuitable. 

This untruth is, to my mind, more serious that the untruth No. 1 cos they have, in their refusal to employ Sabahans, condemned Sabahans as being unfit to work in the oil palm plantations as executives and in other down-the-line jobs. The non-Sabahan plantation owners have drummed this into our heads that Sabahans are not good for plantation work in the last 30 years, so much so that our leaders and educated Sabahans have accepted this as gospel truth, accepted this whole sale and have never challenged this insulting assumption. Result? [a] Little or no employment for Sabahans in the plantation sectors, from executives to field workers. [b] Most plantation GMs, senior and junior executives are from outside Sabah. [c] All field workers are imported. [d] Sabah is the largest oil palm state but this golden crop has yielded DIRT for Sabahans. 

4. Debunking untruth No. 2.

Personally, I have never bought this untruth No. 2, i.e., that Sabahans are unsuitable for employment in the plantation industry. I cannot accept that Sabahans can’t be GM, senior executives, junior executive, office workers, nursery workers, maintenance, field workers, drivers, CPO mill workers. Does it mean that Sabahans are so bad that we are not good for the whole spectrum of employments in this industry? This can’t be true. Certainly, there must be something that Sabahans can do!

The foregoing is the story from non-Sabahan plantation owners. The story is very different from Sabahans plantation owners. They employ Sabahans from top to bottom with a few non-Sabahan workers. It is obvious that non-Sabahan plantation owners tend to employ outsiders and Sabahan plantation owners employ Sabahans. At least two Sabahan plantation owners have done this.

There isn’t a great deal of difference between oil palm and tree plantations in terms of employment. There are two tree plantations in the Bengkoka area which the Sabah Government agencies are shareholders, have about 400 management staff, and field workers. Surprise, surprise, surprise to the non-Sabahan oil palm plantation owners – they have three expatriates, four Malaysians from outside Sabah. The rest are all Sabahans. More than 80pc are from the Kota Marudu/Bengkoka area. This may shock the non-Sabahan oil palm plantation owners! All the section heads can give impressive presentations, with great confidence, in excellent English. These section heads look after the operations from nursery, planting, research, safety, fire fighting, from A to Z!

5. R & D by tree plantations and down stream-prospects.

These two tree plantations in collaboration with a few other plantations are conducting comprehensive research in the growing of various species of trees. Tree plantations can become the future perpetual gold mines of Sabah. With appropriate empowerment policies the tree plantations can give tremendous downstream industries. Right now, oil palm is giving us zilch. Something that oil palm plantation owners should have done and have failed to do.

6. Policy recommendations to rectify untruth No. 1.

The only way to “encourage” oil palm plantation owners to return the favour that Sabah has given them in the last 30 years, made them billionaires, the value of their PLC has sky rocketed, is to use the aged old policy of “carrots and sticks” on the recalcitrant plantation owners.

The Sabah government can consider imposing additional sizeable land assessment on plantations that have a combined group ownership of 10,000 or more acres. The State government shall rebate a certain per cent of land assessment to owners who invest in downstream and provide employment for Sabahans.

Why this policy approach? Cos the oil palm plantations generate about RM22 billion at today’s price. Sabah’s share is a mere RM1B. There is no equity for Sabah which has sacrificed 4.2 million acres of prime land for this industry. 

If the plantation owners consider their total taxes are high for them, then they should lobby the federal government, which is getting big chunk of the taxes, to lower its share. Sabah can also implement a policy of converting existing oil palm plantations to tree plantations on expiry of their leases.

7. Policy to rectify untruth No. 2.

Fundamental question is why tree plantation companies can employ Sabahans and non-Sabahan oil plantation owners have failed. Sabah has every right to ask them to justify this seemingly obvious discrimination.

To establish the truth and reality on the ground, the State government can consider setting up a task force to conduct a detail survey to establish the number of Sabahans and non-Sabahans working in all the plantations. How many of them have work pass? Compare the numbers of Sabahans and non-Sabahan in non-Sabahan oil palm plantations, Sabahan owned oil palm plantations and tree plantations.

Time for Sabah to implement a policy of Sabahan first employment policy in the oil palm industry.


Time to introduce a new norm for the industry in Sabah.

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