WITH 54 parliamentary constituencies in Felda areas, one would assume that Barisan Nasional (BN), or more specifically Umno, would know how to take care of the welfare of the farmers and plantation owners. 

After all, if Felda parliamentary areas were defeated, BN and Umno would be gone. Even if merely a handful of Felda seats were lost, Prime Minister Najib Razak would be in hot soup in the Umno Supreme Council. Knives would be out to end his political career.

But the prospective Members of European Parliament (MEP) ban on the use of palm oil in biofuel by 2021 suggests evidence to the contrary. Najib does not care about Felda. Neither do his cabinet members. Earlier this year, the European Union Parliament passed two resolutions – to impose a single certified sustainable palm oil scheme for Europe-bound palm oil exports after 2020, and to phase out palm oil from the EU biofuel programme by 2020.

To be sure, some of the numbers do reflect sheer insouciance, as MP Wong Chen pointed out as early as 2015: 

“For 2015, the budget to counter the anti-palm oil campaigns has been cut from RM16 million for 2014 to RM 10 million for 2015. Malaysian Palm Oil Board (MPOB), the body responsible for the promotion and development of the industry has also seen a budget cut from RM25 million in 2014 to R14.5 million for 2015. Overall, from the Budget 2015, this Ministry has allocated a mere RM24.5 million to defend and promote palm oil.” 

Yet, palm oil is a RM80 billion export industry. To spend a mere RM24.5 million to defend and promote palm oil is nothing less than an attempt to trifle with the industry as a whole. RM24.5 million represents a mere 0.03 % of total exports of palm oil.

If anything, talk of an impending crisis of palm oil only appeared in Najib’s cabinet last week when Defence Minister Hishamuddin Hussein appeared to confess when speaking to his French counterpart Florence Parly on January 29.

Somewhat strangely, if not embarrassingly, Hishamuddin urged the Armed Forces Minister of France to block the ban even though defence and palm oil are not related issues at all. Hishamuddin admitted just as quickly. 

At another event, Tajuddin Abdul Rahman, the Umno/BN  MP of Pasir Salak in Perak, in turn, argued that Malaysia should have nothing to fear in enforcing an embargo against EU.  Perak Gerakan/BN colleague Mah Siew Keong, the Plantation Industries and Commodities Minister and Teluk Intan MP, entered the fray, by arguing that MEP’s declaration of a possible ban was a “black day for free trade.” 

Another fellow Perak Umno/BN member, Deputy Prime Minister and Bagan Datoh MP Ahmad  Zahid Hamidi confessed that the likelihood of some 650,000 small time plantation owners losing their livelihood was real if the ban is enforced by 2021.

For what it is worth, the EU ban is not easy to implement, as there are merely two resolutions. The European Council of Ministers and the European Commission have to approve it. Even then each of the 27 member states have to separately approve the ban, too.

All-in-all, it will take a few more years before the so-called ban can be operationalised. When it does, the palm oil will not disappear from the EU completely as its yield has been proven by agronomists to be “nine times higher than soybean, five times higher than rapeseed, and eight times higher than sunflower”, according to a widely shared editorial by The Jakarta Post on January 25. 

Still, the above does not detract from the fact that Malaysia has handled the potential EU ban badly. 

After all, if what Mah has called “crop apartheid” were to happen, Malaysia would fall into the mother of the economic crisis simply due to the impact on Felda and other plantation owners. At current count, close to 3.2 million people, mostly farmers, in Peninsular Malaysia and Sabah and Sarawak would be affected by the ban.

Thus the issue before one is simple: didn’t Najib and the government see the prospective ban coming? Wasn’t there any early warning signals? The plain truth is, they did, but they didn’t care about the plight of the farmers one bit. 

First of all, talk of a ban from MEP had been obvious at least since 2012. Yet, Malaysia was oblivious and indifferent to the threat of MEP, which mostly comprises leftists and environmental activists.

In fact, right until the end of last year, the Malaysian government still did not take the threat seriously, when in fact the crisis had been intensifying since October at least.

But between October and December 2017, Malaysian government did not react at all. The reaction was mainly left to the farmers themselves. This alone suggests sheer neglect of their plight. What can the farmers do convince the MEP otherwise even if close to 103,000 signatures of the protests were handed over to EU? 

Indeed, when the signatures were handed over to EU representative Carl Horick at Menara Tan and Tan last week, not a single cabinet minister was there to lend support.

It is in this sense that Najib and his cabinet had taken a cavalier and “tidak apa”, attitude, until the crisis became full blown. More bluntly, they are sleeping on their jobs. 

But how did they allow a bunch of leftist MEPs in EU get the better of Malaysia?

After all, isn’t it a fact that Malaysia has 16 missions all across the 27 member states of European Union? Yes, if the admission of Mah is anything to go by, there are 16 fully accredited Malaysian ambassadors to EU who must have known of the increasing severity of the issue. Were they sleeping too?

But, as explained earlier, Najib and his cabinet colleagues simply did not care. Thus the Malaysian ambassadors let their guards down too. 

When Mah reacted in November, it was mostly to get the ambassadors of EU and Malaysia working together to resolve the issue. The dynamics of the issues, in other words, had morphed into crisis management, not preemption.

When Mah finally called for quick collective action across all  16 embassies, his cry to rally fell on deaf ears too. After all, the Malaysian embassies are not under his command. They are the responsibilities of Anifah Aman, the Foreign Minister. Thus, Mah’s rallying cry was as good as blowing a straw in the wind, since Anifah is known to be highly protective of his ministerial turf.

However, the attack on palm oil – either in Malaysia or Indonesia – has always been centred on the issue of sustainable development. 

In this sense, it doesn’t take a genius to figure out that the MEP would keep attacking Malaysia and Indonesia on this front. More precisely, the question time and again seems to be, can Malaysia or Indonesia, safely produce palm oil for healthy consumption too? 

But Najib and his cabinet did not appear to care about the gathering storm. If anything, they were more engrossed with 1MDB and other forms of grand larceny that they need to fire fight.   

Indeed, as early as 2012, a UN approved list of Sustainable Development Goals (17 of them in total) had been conceived by the UN Development Programme (UNDP). As a member of the UN, Malaysia should have understood the implications of UNDP too. But it didn’t. 

Moreover, when UNDP formulated its development goals, Najib was already three years into the tenure of his premiership. 

But, true to form, Najib did nothing to place palm oil as a top priority of sustainable development in Malaysia. Not surprisingly the credibility of Malaysia as a palm oil producing country – that could meet the exacting standards of EU and UN – was never taken to heart by Malaysia.

Consequently, when MEP saw that Malaysia did not care about its national interest at all, it went for the jugular. It promoted rapeseed and soybean as their alternatives to palm oil; even after it had cornered up to 80%  of the rapeseed and soybean market in the world. 

In turn, although Malaysia and Indonesia both controlled 90% of the palm oil production, it was our joint palm oil industry that was now at risk – not Europe’s.

As things are, palm oil forms the second most important industry of Malaysia, after oil and gas. Each year, Malaysia’s total exports on palm oil comes to about RM80 billion alone.

The size of the industry is massive both in upstream and downstream activities. There are at least 454 refineries in and across Malaysia. If the European Parliament ban is enforced, high unemployment in rural areas will instantly kick in, as workers have to be retrenched. 

While belated reaction is better than none at all, there are numerous signs that Najib has reacted too slowly to the MEP proposed ban, and would have been slower had it not for the actions of Mah.

Furthermore, Mah himself confessed on January 28 that the threat was growing: “If we recall, the EU Delegation to Malaysia gave assurances via a statement dated 30 October 2017, that stated the European Parliament’s Environmental Committee (Envi) anti-palm oil resolution on October 23, 2017 was non-binding and not part of a legislative initiative that needed to be ratified by EU member countries.”

To which he added: “Despite that, the Industry, Research & Energy Committee of the European Parliament on November 28, 2017 went ahead and endorsed the ban on palm biofuels in Europe under the Renewable Energy Directive and now we have the definitive outcome of the Strasbourg vote. So the threat is real and growing.” 

 If what Mah says is right, the situation is dangerous and delicate. But how did Malaysia get here?

Well, instead of working with UNDP, one of the faux pas had FGV Global of Felda trying to work with the Eagle High Plantation (EHP) of Peter Sondakh, an Indonesian.

Under the agreement, Felda subsidiary FIC properties Private Limited paid US$505.4 million for a 37% stake in EHP. 

Ostensibly, the collaboration with Sondakh was to give Felda access to more than 320,000 hectares of land bank in Indonesia, which is about 4.4 times the size of Singapore. (Ayisy Yusof, “Felda has board and management representation in Eagle High”, New Straits Times, August 9, 2017.)

But, close to half of Indonesia’s palm oil planters were small time land owners and producers anyway. They could not have achieved the exacting standards of what the EU and UNDP had jointly demanded.

Second, due to the high cost of compliance to the highest standards of production, the problems faced by Indonesia with regard to the EU ban, are now also hanging like an albatross on the neck of Malaysia. 

Thus, why should the palm oil planters in Malaysia suffer for the bad environmental practice of Indonesia?

Yet, Malaysia does not appear to be able to learn from the lesson. As this is written, there are reports  that Malaysia will work with Indonesia to force EU to lift its future ban. How? 

As things are, Indonesia’s palm oil practices are dragging Malaysia down. Yet, Malaysia wants to work with it? Surely, this cannot be.

Indeed, A. Kadir Jasin noted that when the transaction with EHP went through, the prices of Felda dropped immediately, while the prices of EHP went up. Even the market, for lack of a better word, was against any collaboration with Peter Sondakh. 

Yet, Najib and the board of FGV Global proceeded with the plan. By going ahead, Malaysia has inevitably imported Indonesia’s plantation issues and environmental problems. This is not only bad strategy but bad international relations.

Thirdly, UNDP, which has an office in Putrajaya, has since May 2017 appointed Stefan Priesner as the resident coordinator of UNDP for Malaysia, Singapore and Brunei. Yet, no one of any importance seems to have contacted him. Or at least there are no public reports of such meetings.

In other words, a veritable and valid UN agency was willing to collaborate with Malaysia, and at no cost, too. But due to sheer apathy, Malaysia lost this vital and strategic opportunity.

Once again neither the PM nor the cabinet ministers in charge of palm oil and primary industries were able to seize the chance.

Even more ominously, the attempt to speak to the MEPs was only scheduled for the first quarter of March. 

Among others, the Malaysian delegation sought to debrief these MEPs included statutory entities such as the Malaysian Palm Oil Council(MPOC), the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Certification Council (MPOCC).

Even more oddly, the risks posed by EU’s ban had been well covered by both main stream media and alternative media like The Malay Mail, The Edge, MalaysiaKini and Bernama. Had the PM and the cabinet taken the time to read, they could have seen the oncoming freight train that is the ban.
 
Yet, the PM did nothing to ease the tensions. MPOC chief Kalyana Sundram, speaking to Bernama, was even quoted by The MalaysiaKini on January 9 while presentinf a scientific journal entitled “Building a Sustainable Future Together: Malaysian Palm Oil and European Consumption.”(Nurul Haniz Izmir, “Malaysian Delegation to Meet EU Reps Over Palm Oil Ban”, Bernama, January ). 

Over and again, the PM did not urge MPOB and/or MPOC to inject more urgency to the meeting.

Understood in this vein, the mangled palm oil policy of Malaysia began with the PM and his cabinet’s poor understanding of how the UN and EU parliament operate. By neglecting both, he has compounded Malaysia’s delicate situation in the EU palm oil ban in biofuel. 

By allowing his cabinet colleagues to press the panic button, as exemplified by Hishamuddin’s appeal to the French minister of armed forces and Tajuddin’s recommendation to embargo EU products, Malaysia has lost its strategic planning completely. 

One must not forget that a Malaysian embargo on EU products is surely no more than an ant bite to the EU, which commanded a population of 494.8 million and a GDP of US$17.1 trillion (RM66.47 trillion) in 2017,, if the threat of EU products embargo are actually carried out by Malaysia folowing Tajuddin Rahman’s heroic suggestion. On the other hand, Malaysia will tend to lose big if the EU palm oil ban were to be actually implemented.

God save Malaysia.

Part II of this series will be on how Malaysia is losing the palm oil market to European planters of rapeseed and soybean. Part III will offer a solution. – February 3, 2018.

* Dr Rais Hussin is a Supreme Council member and the policy and strategy bureau head of Bersatu.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.