kdn no: pp10311/10/2012(031241) • issn no. :...

Focus on Palm Oil

KDN No: PP10311/10/2012(031241) • ISSN No. : 2180-4486• VOL.16 ISSUE 2 (Apr-June), 2019

www.mpoc.org.my

MarketsImpact of US-China Trade SpatMalaysian Palm Oil – Industry Overview

CommentFriends, Foes and the EU Elections

SustainabilityCertified Sustainable Palm Oil:Multiple Standards

NutritionPalm Fruit Oil: A Big Fat Controversy

Planter’s Diary Lucky Escape

PublicationsAftermath of the Flood, Part 2

In Memoriam: Datuk Leslie Davidson (1931-2019)

Tribute to a Planter: Tan Sri Dato’ Dr Lee Shin Cheng

Cover, Back Cover & Ads:Layout 1 6/20/19 6:22 PM

Global Oils & Fats Business, a quarterly news magazine with a circulation of 25,000 copies worldwide has been reporting on

the oils and fats industry since 2004 and continues to inform decision makers, regulators, health professionals and those

involved in the oils and fats business on key issues widely discussed in the industry.

The magazine covers developments in sustainability, nutrition, regional markets, branding and technology. It presents key

opportunities and strategic challenges that exist in building a successful business globally in new and developing markets.

The Global Oils & Fats Business Magazine helps you to reach a worldwide audience through a distribution network that

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For details on advertising rates or to place an advertisement, please e-mail Advertising Sales - [email protected] or call

603-78064097/ Fax 603-78062272.

Download a copy of the GOFB at www.mpoc.org.my

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GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.16 ISSUE 2, 20194

Cover StoryEU Cap on Trans Fats in FoodNew regulation 6

MarketsImpact of US-China Trade Spat 9… on palm oil imports

Malaysian Palm Oil – IndustryOverview 11Performance in 2018

CommentFriends, Foes and the EU Elections 16Uncertain outcomes for palm oil

SustainabilityCertified Sustainable Palm Oil:Multiple Standards 19

NutritionPalm Fruit Oil: A Big FatControversy 23

Planter’s DiaryLucky Escape 30In the twilight

6 1611

Contents & Editorial 1pg (b):Layout 1 6/21/19 3:44 PM

PublicationsAftermath of the Flood, Part 2 32Optimism in sight

In Memoriam:Datuk Leslie Davidson(1931-2019) 35

Tribute to a Planter:Tan Sri Dato’ Dr Lee Shin Cheng 37

23 37

Editor-in-chief

Datuk Dr Kalyana Sundram

EditorBelvinder Sron

Published by:

Malaysian Palm Oil Council (MPOC)2nd Floor, Wisma Sawit,Lot 6, SS6, Jalan Perbandaran47301 Kelana Jaya,Selangor, Malaysia.

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MPOC Copyright 2012

All rights reserved

KDN No: PP10311/10/2012(031241)

• ISSN No. : 2180-4486

All views expressed in the GOFB are not necessarily

those of the publishers. No part of this publication

may be reproduced, stored in a retrieval form or

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5GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.16 ISSUE 2, 2019

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Cover Story

On April 24, 2019, the European Commission (EC)adopted Regulation (EU) 2019/649, amending Annex III toRegulation (EC) No. 1925/2006 of the EuropeanParliament and of the Council of the EU (the Council)with regard to trans fats.

The EC had launched consultations on Oct 4, 2018, toseek stakeholders’ views on the draft Regulation setting amaximum limit of trans fats of 2 grams per 100 grams offat in food intended for the final consumer. The maximumlimit applies for trans fats other than that naturallyoccurring in animal fat.

The consultation allowed for feedback on the draftRegulation until Nov 1, 2018. The EC received 49responses that it evaluated. Not all comments, forinstance those of the German confectioneryassociation, were supportive of the initiative.

EU Cap on Trans:Layout 1 6/13/19 1:22 PM

The EC requested approval of the amendment from theresponsible EU Committee. After approval was given, theCouncil and the European Parliament had two months to makeobjections. As they did not object, the limit of 2 grams of transfats per 100 grams of fat was codified into EU law.

Regulation (EU) 2019/649 amends Annex III to Regulation (EC)No 1925/2006 on the addition of vitamins and minerals, and ofcertain other substances to foods, with regard to trans fats infoods intended for the final consumer, other than that naturallyoccurring in animal fat.

This Regulation addresses substances representing a potentialrisk to consumers when added to foods or used in themanufacture of foods under conditions that would result in theingestion of amounts greatly exceeding those reasonablyexpected to be ingested under normal conditions ofconsumption of a balanced and varied diet.

Annex III to Regulation (EC) No 1925/2006 provides for thelisting of substances whose use in foods in the EU is prohibited(Part A), restricted (Part B) or under scrutiny (Part C). The ECconsiders trans fats to be a substance for which harmful effectson health have been identified and, therefore, has placed thesubstance in Part B of Annex III. The addition of trans fats tofoods or their use in the manufacture of foods is only allowedunder the conditions specified in that Annex, in view of thecurrent state of scientific and technical knowledge.

More specifically, the content of trans fats, other than thatnaturally occurring in animal fat, in food that is intended for thefinal consumer, is not allowed to exceed 2 grams per 100 gramsof fat. Food that does not comply with the Regulation is stillallowed to be placed on the market until April 1, 2021.

The European Consumer Organisation BEUC has indicated thatit supports the limit of 2 grams of trans fats per 100 grams offat. However, the BEUC appears to remain open to the optionof prohibiting the use of partly hydrogenated oils (PHOs),provided that such measure equally protects consumers’ health.

The BEUC remains concerned about the options of setting limitsfor trans fats or banning PHOs through voluntary agreementswith food business operators, as such measures have provenineffective in ensuring that all food businesses eliminate trans fatsfrom products.

Opening for sustainable palm oilWhile the EU was debating measures against trans fats, viableand more obvious (industrial and nutritional) alternatives to

trans fats have been already available. In particular, naturallystable fats exist, such as palm oil.

In fact, palm oil can be considered as the primary alternative topartially hydrogenated fats and oils in food products. It is anatural and healthy alternative, which is already available on themarket. Palm oil is a vegetable oil that is solid at roomtemperature and does not need to be artificially hardened. Palmoil is a balanced oil that contains equal amounts of saturated andunsaturated acids. And it is not costly.

European Commissioner for Health and Food Safety VytenisAndriukaitis has stated that, in preparation of future regulatorysteps, the EC is also assessing whether measures regulating transfats could prompt manufacturers to use alternatives that are lessenvironmentally sustainable.

This comment may be read in connection with the allegedsustainability concerns with respect to one of the key naturalalternatives to hydrogenated oils: palm oil. Such concernstypically relating to palm oil’s sustainability are largely unfounded,in particular taking into account the industry’s efforts to makeproduction more sustainable and the significant increase insustainable palm oil now being produced and used by foodmanufacturers.

Policy makers, companies and civil society organisations shouldbe aware of, and promote, sustainable palm oil as a keyalternative to vegetable oils and fats containing trans fats, withoutbias or hidden economic agendas. Alternatives to trans fats exist,and should be used.

Following the conclusion of the stakeholders’ consultations, theEC adopted a regulation introducing limits on industrial trans fatsin foods. Regulatory measures with respect to trans fats lookpoised to significantly affect the demand for certain vegetableoils on the world market. This development is, therefore, a clearopportunity for palm oil and, even more so, an opening forsustainable palm oil.

As companies continue to use palm oil to fill the gap left by theremoval of partially hydrogenated vegetable oils, an increase indemand for palm oil should in fact mean an increase in demandfor sustainable palm oil. The restrictions on trans fats in foods(see Box on page 8) should be used to not only improve thehealth of EU citizens, but also to support sustainable palm oilproduction in Malaysia.

FratiniVerganoEuropean Lawyers



8

Cover Story


Curbs on Trans Fats

Trans fats are specific types of unsaturated fatty acids and are

naturally present in food products derived from ruminant animals,

such as dairy products or meat from cattle, sheep or goat, as well

as in some plants and products of vegetable origin, such as

leeks, peas, lettuces and rapeseed oil.

Trans fats can also be formed by chemically modifying vegetable

oils, such as soybean oil. By adding hydrogen atoms, vegetable

oils can solidify into a texture like that of many oils high in

saturated fats, making them useful in a wide variety of food

applications. Trans fats are, therefore, also present in fats that

have been industrially processed to artificially solidify them

through the treatment with hydrogen (hydrogenation). This

process was first discovered at the beginning of the 20th century,

but gained wider use during World War II as rationing cut into

butter supplies and there was a need for margarine supplies.

Industrially produced trans fats can only be obtained through the

process of so-called partial hydrogenation. Partial hydrogenation

of vegetable oils has an impact on the properties of the

unsaturated fatty acids, thereby leading to a high content of trans

fats (depending on the type of fat and method). Conversely, the

more costly process of complete hydrogenation does not lead to

trans fats. Trans fats are mainly found in processed food

products, such as ready meals, biscuits, potato chips, ready-

made sauces or margarines, but also in take-away food.

Regulating trans fats in food

Denmark was the first country to mandate restrictions on

industrially-produced trans fats in 2004. Since then, the trans fats

content of food products has declined dramatically and

cardiovascular disease deaths have reportedly declined more

quickly in Denmark than in comparable countries.

Other EU member-states have introduced or announced

legislation limiting the trans fats content to 2% of the total fat

content of food products. They including Austria, Hungary and

Latvia. In Belgium, Germany, Greece, the Netherlands, Poland

and the UK, voluntary measures aimed at reducing the trans fats

content of food have been adopted.

National dietary recommendations have been issued in Bulgaria,

Finland, Malta, Slovakia and the UK. Finland, Greece and Spain

have introduced other legislative measures, such as limits on

trans fats content for specific products only. Legal measures have

been taken by Iceland, Norway and Switzerland as well.

Options of addressing trans fats were evaluated by the European

Commission in a 2015 report regarding trans fats in foods and in

the overall diet of the EU population. The report recalled that

coronary heart disease was the leading cause of death in the EU

and that a high intake of trans fats seriously increased the risk of

heart disease, more than any other nutrient on a per calorie basis.

The report evaluated options to reduce trans fats consumption in

the EU, including: 1) The introduction of a mandatory trans fats

content declaration; 2) A legal limit on the trans fats content of

food; 3) Voluntary agreements towards reducing trans fats in

foods and diets at EU level; and 4) EU guidance for national legal

limits on the trans fats content of food.

According to the report, leaving this issue to member-states

would not ensure that all EU citizens benefit from the reduction

and would continue the current piecemeal approach, negatively

affecting the EU Internal Market. The report concluded that

establishing a legal limit for industrial trans fats in food appears to

be the most effective measure in terms of public health, consumer

protection and compatibility with the EU Internal Market.

In 2016, the European Parliament adopted a resolution calling for

a limit on industrially produced trans fats in foods. Legal limits

have already been established in infant formulae and follow-on

formulae; and the EU Regulation on the provision of food

information to consumers requires food business operators to

specify in the list of ingredients of all pre-packed foods whether

refined fats/oils are fully or partially hydrogenated.

In the US, the Food and Drug Administration concluded in 2015

that partially hydrogenated oils, the primary dietary source of

industrial trans fats, are no longer to be considered as ‘generally

recognised as safe’ for use in food and have, therefore, been

prohibited since June 2018.

On May 15, 2018, the World Health Organisation called for the

elimination of industrially-produced trans fats from the global food

supply.

On June 19, 2018, the European Food Safety Authority published

a report based on a review of available scientific evidence;

according to the latest national and international

recommendations, dietary intake of trans fats should be as low as

possible.



Markets

The US is one of the world’s majorconsumers of oils and fats. Its totalconsumption in 2017 amounted to 22.5million tonnes, comprising mainlysoybean oil, canola oil and corn oil. TheUS has a relatively low palm oil per capitaconsumption, owing to the dominance ofdomestic soybean oil and corn oil in theedible oils market. Palm oil consumptionamounted to about 1.4 million tonnes in2018.

However, the volume of palm oilimpor ts has been rising. TheDepartment of Agriculture indicatedthat palm oil imports increased byabout 17% on annual average between2000 (182,000 tonnes) and 2017 (1.7million tonnes). The value went up by3.4% to US$1 billion from January toNovember 2018, against US$967.04million over the same period in 2017,according to WorldCity’s analysis of the

latest US Census Bureau data. Malaysia’smarket share constituted 38% of thetotal value.

The East Coast states of the US are themain gateways for palm oil imports, withthe top three being the Port of NewOrleans (37% of the total import value),Port of Savannah (25%) and Port ofNewark (13%). Concentration in the EastCoast states has limited the opportunity

to expand palm oil demand andconsumption in the West Coast, whereCalifornia is a major market.

The US consumes about 10% of theworld’s fats and oils for both food andnon-food uses, including biodiesel andfatty acids production. The US remainsthe biggest market for palm oil in theAmericas region, accounting for 91.5% ofall palm oil imports.

Impact of US China:Layout 1 6/13/19 6:13 PM

10

Markets


From January to December 2018, the USabsorbed 540,509 tonnes of Malaysianpalm oil products (Table 1). This was aslight decrease of 2.5% compared to thevolume recorded in 2017.

RBD palm olein remained the largestpalm oil product imported in 2018,followed by RBD palm stearin and RBDpalm oil (Figure 1).

Soybean oil continues to be the mostcommonly used edible oil in the US. In2017, soybean oil made up 9.1 milliontonnes or 40% of the edible oilsconsumed domestically. However, canola,corn and palm oil have each grown at afaster rate than soybean oil. From 2011-16, use of these three commodities grewby 66%, 57% and 21% respectively, whilesoybean oil use increased by 11%.

Uncertainties aheadChina is the main importer of USsoybean, accounting for 60% of totalsoybean exports to the country. TheChinese government’s decision toimpose a 25% import tariff on USsoybean has had a mixed effect on thestock balance and prices in bothcountries.

The trade dispute between the US andChina has not made any significant impacton palm oil imports. However, the lageffect could see higher palm oil uptake bythe US due to the attractive current priceof palm oil.

There are no immediate indications as tohow the reduction of soybean exports toChina will affect the demand for palm oilin the US. It is also not clear whether the

reduction in US exports will lead toincreased domestic crushing of soybean;if so, it will in turn reduce the need forpalm oil. The trade dispute may also affectthe oils and fats balance in the US,thereby having a long-term effect onpalm oil imports.

MPOC USA

Impact of US China:Layout 1 6/13/19 6:13 PM


Markets

The global economic uncertainties of2017 continued into 2018. The year waspunctuated by escalating trade disputes,especially between the US and China,and episodes of financial stress andvolatility amidst an undercurrent of geo-political tensions.

This exposed the global oils and fatstrade to a confluence of risks includingintensifying climate challenges, whichcould severely disrupt economic activityand inflict significant damage on longer-term development prospects. Thesituation was exacerbated by the

European Parliament’s vote proposingan earlier exclusion date for palm oilbiofuels in the Renewable EnergyDirective II mandates. The EU has useduncorroborated scientific evidence tosupport its baseless claims.

This protectionist policy is a politicallymotivated defensive measure that runscounter to the UN Charter, whichpromotes fair globalisation and apeaceful, prosperous future for all – onein which no one is left behind. The EU’sprotectionist policy will hurt those withthe thinnest margins of security –

vulnerable small farmers, not only inMalaysia but in all palm oil producingnations. It will result in steep reductions inincome inequality and act as a severeimpediment to social development forthe very communities compromised byEU’s lopsided decisions.

As the global outlook darkens, theimperative of sustaining economicmomentum will require the Malaysianpalm oil industry to make the most outof growth opportunities, avoid pitfalls andbuild buffers against possible futureshocks.

Malaysian Palm Oil:Layout 1 6/20/19 11:28 AM

12

Markets


In 2018, Malaysian palm oil was subjectedto volatile global trade, as well as weatheruncertainties that impacted productionand exports. Nevertheless, Malaysiamanaged to curtail the impact to aminimum; this was achieved throughdiscipline, strong commitment andteamwork among all stakeholders.

The domestic oil palm planted acreagewas recorded at about 5.9 million ha in2018, a growth of 38,185 ha (0.7%)compared to 5.8 million ha in 2017(Table 1). As a result of erratic weatherpatterns, crude palm oil (CPO)production fell by 402,970 tonnes (2%)compared to 2017.

Although the first quarter saw higherproduction, dry and hot conditions fromApril to September resulted in lowerCPO production for the year. Despiteimproving weather conditions in thefourth quarter, the higher production ofQ4 could not compensate for lowerproduction in Q2 and Q3. On a positivenote, production of crude palm kernel oilwas recorded at 2.3 million tonnes, anincrease of 19,072 tonnes (0.8%)compared to 2017.

Although CPO production went down in2018, stock levels reached an all-timehigh of 3.2 million tonnes in December,largely due to lower exports. Thissituation was aggravated by thenarrowing price discount between palmoil and competing oils such as soybeanoil, sunflower oil and rapeseed oil in theglobal market. Year-end stock levels of



palm kernel oil were recorded at 434,133tonnes (up by 50%) against 289,375tonnes a year earlier.

Exports of all types of palm oil productsstood at 24.9 million tonnes (Table 2), anincrease of 902,256 tonnes (3.8%). Withthe exception of palm oil and palm kerneloil, other products registered an increasein export volume. Palm kernel cakeexports increased by 85,487 tonnes(3.9%), oleochemicals by 317,475 tonnes(11.4%), and finished products by208,866 tonnes (51.4%). Palm biodieselexports rose by an impressive 280,176tonnes (119.1%) due to the favourableprice and higher demand from China.

Malaysian palm oil exports registered 16.5million tonnes (Table 3) and were valuedat RM41 billion in 2018. This was lower by72,410 million tonnes (0.4%) in volumeand almost RM9 billion (17.9%) in valuecompared to 2017. The decline in valuewas attributed to low average prices of allglobal oils and fats, which affected theexport prices of palm oil as well.

Export destinationsIndia retained its position as the maindestination for Malaysian palm oil with2.5 million tonnes, an increase of 485,711tonnes or close to 24% year-on-year. Thiswas due to the suspension of Malaysianexport duty on CPO in the first quarter.It was the third consecutive year thatIndia was the top destination forMalaysian palm oil. Despite the Indiangovernment’s decision to increase importduties on palm oil three times between

March and May, CPO imports stayed inpositive territory due to high demandfrom refiners.

China was the second-biggest destinationfor Malaysian palm oil with an importvolume of 1.9 million tonnes, albeit adecrease of 57,540 tonnes or 3%compared to 2017. China’s palm oil stockshad depleted by end 2017, which sawimporters start procuring palm oil in thefirst half of 2018. However, demandtapered off when there were adequatestocks subsequent to the large purchases.

Pakistan was the third-biggest importerwith 1.2 million tonnes, an increase of144,301 tonnes or 14.2%. Malaysiansuppliers were very competitive inoffering attractive prices for palm oleinduring the first half of 2018, leading to asignificant market share.

Asia Pacific and the Sub-Continent werethe marketing regions that took up thebulk of Malaysian palm oil in 2018 (Table4). They respectively imported 4.7 milliontonnes and 4.4 million tonnes. Thisaccounted for 55% of Malaysian exports.


Markets


The Sub-Continent was the only regionthat recorded an increase in Malaysianpalm oil imports – amounting to 697,442tonnes (up by 19.1%). This was due torising intake by India, Pakistan and theCentral Asian Republics.

All other regions showed a drop – thebiggest was seen in Asia Pacific, by462,711 tonnes or 8.9%. The main reasonwas lower imports by Vietnam, thePhilippines, Myanmar and Japan. Vietnamcrushed a large quantity of soybean forthe feed industry that saw an oversupplyof soybean oil. In the Philippines, anincrease in coconut production andbetter yield resulted in higher availabilityof coconut oil.

Export revenueThe annual average local delivered CPOprice decreased by RM544 (19.5%) fromRM2,783 per tonne in 2017 to RM2,239per tonne in 2018 (Table 5). Lowerexports and higher production ofcompeting oils adversely affected theoverall global oils and fats prices. Thehigher stock levels of CPO in Malaysiafurther dampened the price.

The average export price of RBD palmoil and RBD palm olein went downrespectively from US$670.50 toUS$570.50 (by 14.9%) and from US$686to US$576 (by 16%) per tonne. RBDpalm stearin and Palm Fatty AcidDistillates recorded lower prices as well,from US$659.11 to US$550 (by 16.6%)and from US$637.50 to US$476 (by25.3%) per tonne respectively.



The overall value of palm-based exportsdecreased by 12.5% from RM74.7 billionto RM65.4 billion (Table 6). This wasmainly due to lower prices of oils andfats, particularly in the second half of2018. However, there was higher revenuefrom exports of palm cake (by 19.2%),finished products (49%), biodiesel(84.4%) and other products (39.5%).

Global production and tradeWorld production of oils and fats stoodat 231.2 million tonnes in 2018, anincrease of 8.8 million tonnes from 2017.Palm oil and palm kernel oil togetheraccounted for 80.3 million tonnes, or34.8% of total oils and fats production(Figure 2). Soybean oil output contributed56.4 million tonnes (24.4%) and rapeseedoil registered 25.6 million tonnes (11.1%).

Of the 88.3 million tonnes of oils and fatstraded worldwide during the year, palmoil and palm kernel oil jointly contributed53.5 million tonnes or 60.6% of globalsupply (Figure 3).

Malaysia retained its position as a majorplayer in the oils and fats export market.Its palm oil exports of 16.5 million tonnesrepresented 32.8% of the global palm oiltrade (Figure 4).

MPOC



Comment

Elections to the European Parliament took place in May,changing the composition of the EU’s assembly, at leastto a certain extent. While the approach towards palm

oil by the European Parliament and its Members (MEPs) afterthe elections remains largely uncertain, it is clear that palm oilhad many outspoken critics in the previous legislature. Theyhad driven the issue forward and contributed to shaping thedebate within the EU and its member-states in recent years(see Box on page 18).

The key function of the European Parliament is its role in theordinary legislative procedure to adopt EU laws. The EuropeanCommission (EC) submits legislative proposals to the EuropeanParliament and the Council of the EU (the Council), which mustthen reach agreement. One of the main recent pieces oflegislation affecting palm oil has been the recast of the EU’sDirective on Renewable Energy Sources.

In addition to debating and voting on legislative proposalsprepared by the EC, the European Parliament is alsoempowered to conduct public hearings and to draft, debate andadopt resolutions on its own initiative. This is an important toolfor the European Parliament to set issues; initiate debates; putpressure on the EC, the Council and on other stakeholders; aswell as to suggest the political desire to act in a given area.

In particular, the Resolution on Palm Oil and Deforestation ofRainforests (the Resolution) of April 4, 2017, showcased theclear anti-palm oil bias of the Parliament and caused months ofdebate; but as a non-binding resolution, it did not have anyimmediate legal consequences. Still, such debates can bedamaging and ultimately consequential as they put pressure onthe EC and alert other EU stakeholders and the greater public.

With all the negative bias towards palm oil, the more reasonablevoices are often overlooked, although they do exist. A smallnumber of MEPs continuously tries to contribute to the variousdebates.

An important example is MEP Alberto Cirio (Group of theEuropean People’s Party). He intervened repeatedly withrespect to various developments, noting the complexities of theissue; the use of palm oil by businesses based in the EU; and theefforts that have been achieved in certain producing countries,in particular in Malaysia.

In the context of the debate over the Resolution, MEP Ciriopraised Malaysia, which he stated had made significantinvestments to move away from exploitation of theenvironment. He concluded by expressing support for labellingto ensure the proper traceability of palm oil.

Friends Foes and the EU:Layout 1 6/13/19 6:03 PM

Earlier in the process, MEP Cirio hadtabled an amendment in the Parliament’sCommittee on the Environment, PublicHealth and Food Safety, which wouldhave added the following to theResolution: ‘calls on the [EC] to rejectclaims like ‘palm oil free’ as – by implyingthat the product is unsuitable for thehealth and/or the environment and/orthe rights of the local communities inthe cultivating countries and/or thewildlife – [they] send a wrong andmisleading message and provide thewhole supply chain [with] an adversemarket incentive’.

MEP Schreijer-Pierik (Group of theEuropean People’s Party) also underlinedthat palm oil is not the main driver ofdeforestation and that there is growingdemand for food in the world, with palmoil being essential for the EU’s foodindustry.

Activism on holdBetween May 23 and 26, citizens in all 28EU member-states (including the UK,since its exit from the EU has beenpostponed) elected 751 MEPs for thenext five-year term until 2024.

At this time, it is still largely uncertainwhat the elections and the newcomposition of the European Parliamentwill mean for palm oil and the issuesaffecting palm oil. However, it is clear thatlegislative activity will likely slow downduring 2019, as dossiers are closed,postponed and then slowly taken up againafter the constitution of the newParliament. The final plenary session of thislegislative period was held in mid-April.

The opening session is set for the firstweek of July, thereby taking place shortlybefore the Parliament’s summer recessfrom August until the next plenarysession in mid-September. One of thefirst tasks of the new Parliament will bethe election of the next President of theEC, as the term of the current ECconcludes on Oct 31, 2019.

Hence, from mid-April to mid-September – possibly even until the endof the year, considering the renewalwithin the EC – no major legislativedevelopments are to be expected.

After years of political activism from theEuropean Parliament, or at least certain

MEPs, the legislative and political activitywill largely see a pause. It can beexpected that there will be increasedparliamentary activity leading up to theelections and then a period of virtualstandstill from April to October.

The assumption is that nationalist forcesthroughout Europe will increase theirrepresentation and it is likely that theirrhetoric will be largely against importsand in search of easy targets to attack.Hopefully, palm oil will not become yetagain one such target and the debatewill be informed by science and facts,rather than demagogy or hiddenagendas.

Therefore, 2019 might be a goodopportunity for palm oil producingcountries to take control again of thedebate on palm oil and drive the issuesforward on the basis of their owninitiatives and agendas. Activities shouldbe planned and issues strategicallyframed.

FratiniVergano

European Lawyers



A number of Members of the European Parliament made it their

task to push the debate on palm oil and oil palm cultivation during

the previous legislative term, often in the context of deforestation

and forest management.

In early 2017, the European Parliament debated and adopted the

Resolution on Palm Oil and Deforestation of Rainforests.

The Resolution originated from a Public Hearing on Palm Oil and

Rainforests: What can the EU do to stop deforestation?, held on

March 17, 2016; it was organised by the European Parliament’s

Committee on the Environment, Public Health and Food Safety

(ENVI). The tone of the hearing was overwhelmingly anti-palm oil

and, as a result, all interested stakeholders, including Malaysian

palm oil, were placed in a negative light.

According to the European United Left/Nordic Green Left

European Parliamentary Group, the organisation of the public

hearing was initiated by Kateřina Konečná, MEP from the Czech

Republic, during a meeting of the ENVI Committee. At the

hearing, Ms Konečná, stated that the situation in palm oil

producing countries was a disaster in the making and that the EU

should work towards the reduction of the cultivation of oil palm.

Another significant comment came from MEP Benedek Jávor

(Group of the Greens/European Free Alliance), Vice-Chair of the

ENVI Committee, who claimed that the EU did not have time for

more studies and that an Action Plan on Deforestation and Forest

Degradation must lead to strict regulations on palm oil and other

forest products, as well as stricter biofuel regulations. A rather

extreme comment came from MEP Eleonora Evi (Europe of

Freedom and Direct Democracy Group), who expressed the

opinion that she did not have confidence even in sustainable

palm oil, in part due to ‘failures’ of the certification mechanisms.

Following the public hearing, MEP Konečná became the

responsible rapporteur to draft the text of a resolution by the

European Parliament. After discussions within various committees

of the European Parliament, the ENVI Committee tabled, on

March 20, 2017, the text of a draft Resolution on Palm Oil and

Deforestation of Rainforests.

The Resolution addressed a number of aspects related to palm oil

production and contained a significant number of calls on the

European Commission (EC). Importantly, the Resolution called

‘for the EU to introduce minimum sustainability criteria for palm oil

and products containing palm oil that enter the EU market’.

On April 3, 2017, the European Parliament debated the

Resolution and then adopted it the following day. In the context of

the debate, MEP Konečná stated that, in general, work should

focus on moving towards sustainable forms of production for all

products, and criticised first-generation biofuels, which increased

CO2 emissions and whose production contributed to forest fires.

MEP Konečná further stated that palm oil was “not the greatest

evil that we know, but certainly is a major product” and that the

EU “shouldn’t just talk, but should do” things to address the issue.

Again, a number of MEPs spoke out against palm oil. Some

reiterated rather simplistic perceptions; others highlighted certain

aspects, such as palm oil as a biofuel feedstock, sustainability

standards and traceability. At the end, the European Parliament’s

plenary adopted the Resolution with 640 votes in favour, 18

against and 28 abstentions.

In 2018, the European Parliament continued its discussions on

forest management and deforestation, debating and adopting the

‘Resolution on Transparent and Accountable Management of

Natural Resources in Developing Countries: The case of forests’.

Inter alia, it notes that ‘the expansion of palm oil plantations has

led to massive forest destruction and social conflicts that pit

plantation companies against indigenous groups and local

communities’. With regard to palm oil, the resolution largely

focuses on sustainability schemes and traceability in order to

ensure that only sustainable palm oil is imported into the EU.

Finally, the European Parliament has strongly lobbied for the

phase-out of palm oil as a biofuel feedstock in the EU. While not

expressly containing such a ban, the EU’s revised Renewable

Energy Sources Directive hides the ‘ban’ of palm oil biofuel

behind rules that will apply to all biofuel crops. More specifically,

the revised Directive calls for the determination of ‘low indirect

land-use change-risk biofuels’. The use of biofuels that do not fall

within this category was agreed to be frozen at their 2019 level,

with the EC then required to recommend phase-out strategies for

the time between 2024 and 2030.

While the EC insisted that there is no ‘ban’ on palm oil, MEPs

touted the compromise as the end for palm oil- and soybean-

based biofuels by 2030. The issue was driven by Bas Eickhout

(Group of the Greens/European Free Alliance), who served as the

rapporteur for this legislative initiative for the ENVI Committee.

18

Comment


Active Legislative Period on Palm Oil and Forests



Sustainability

The emergence and presence of numerous sustainabilitybenchmarks and standards for palm oil intensify the need for thesector to transform itself so that sustainable practices becomeinstitutionalised over time.

Having more references for sustainable palm oil raises awarenessof sustainable development. If you look at palm oil producers,especially in Malaysia and Indonesia, they already know about theRoundtable on Sustainable Palm Oil (RSPO) and now withMalaysian Sustainable Palm Oil (MSPO) and IndonesianSustainable Palm Oil (ISPO), even more people, in particular, thesmall growers and the smallholders know about sustainable palmoil. The permeation and influence of the message of sustainablepalm oil has risen more than ever before in these two majorproducers, who account for nearly 85 per cent of the globalproduction.

These emerging national standards are in reality each country’sown definition of sustainable palm oil, but that does not meanthey should be divergent or contradictory.

DEVELOPING A CREDIBLE FRAMEWORKPerhaps, palm oil-producing nations could follow the lead of theForest Stewardship Council (FSC), a non-profit organisation that

encourages responsible management of the world’s forests. TheFSC was the model for most Roundtables in the world todayand the first standard that involved all stakeholders in the supplychain of timber.

It developed standards that incorporated social andenvironmental issues and today, everyone in the timber industryuses FSC as a benchmark. As a result, multiple national timberstandards have emerged, claiming to address the same issues asthe FSC, which has gone from strength to strength. Today, thevast majority of paperbacks you read are made from FSC-certified timber.

As for crude palm oil, around 19 per cent of the world’sproduction is RSPO-certified, and that is in just eight years. Andlike the RSPO, which has its fair share of critics, the nationalstandards have come under the spotlight.

The questions swirling around in the industry include: Will eachnation’s standard have credibility? Will it have adequate resources?How independent is the certification process? Is the standardbased on full shareholder participation? How will it be enforced?What kind of sanctions will be taken against companies andsmallholders that do not comply since the national standards are

Certified Sustainable (b):Layout 1 6/20/19 4:24 PM

now mandatory? Is this an excuse for some producing nations tobypass the internationally recognised RSPO, which is seen as aforeign imposition? What about demand for CSPO? How willnational standards assure the demand side?

All these are valid questions and the respective governmentsshould respond to them with full transparency in order to createconfidence among international stakeholders. Of course, therewill be challenges. It is a big task for Indonesia and Malaysia tocertify their 4 million odd smallholder units. Considerableresources are required. It is also going to be an issue for othermajor producing countries, such as Thailand, Colombia, Nigeria,Papua New Guinea and Latin American countries. But justbecause the journey is arduous, it does not mean it should notbe taken.

Some attribute the emergence of these many references andstandards to a lack of trust in the framework of the RSPO. Oneshould angle this debate more constructively by drawingstrength from the potential contributions these respectiveplatforms can make to the sustainability agenda. And this mustbe done sincerely. The RSPO is actually a catalyst for morestandards of this nature to be conceived – the ultimate aimhere should be for the industry to produce sustainable palmoil.

ROLES PLAYED BY STANDARDSAlthough the many initiatives seem to have polarised the sectorsomewhat, hopefully it is only for the short-term. For the longer

term, due to the complexity of the palm oil supply chain and theparticipation of such a massive number of players, includingpolicymakers and governments, it is critical to ensurecollaboration, if not integration, so that all these parallel schemesamalgamate at some point for maximum leverage and impact.This is how it is seen working.

National Standards• These are critical as they allow the governments of producing

nations to emphasise the importance and seriousness ofresponsibly managed practices for palm companies.

• While not necessarily inclusive, national standards neverthelessset the base line parameter for all producers to comply within ensuring responsible practices across the board, includingsmallholders that account for over 50% of oil palm cultivationworldwide.

• At national level, some element of mandatory complianceand enforcement is critical for mass transformation of bestpractices in the sector; and

• Once this baseline is achieved, companies will be betterequipped to improve to a more stringent international standard.

International Standard – the RSPO• The RSPO is an international benchmark for any and all oil

palm-growing countries, from South East Asia and the Congobasin to the Amazon and Oceania that goes beyond national

20

Sustainability



legal requirements. For example, the requirement to complywith New Planting Procedures involves free prior and informedconsent and high conservation and carbon stock value assessments;

• The RSPO is now a massive institution. It has huge influence,since it represents producers, supply chain players, financialinstitutions and environmental and social NGOs via its 3660members from over 60 countries around the world with everyentity directly or indirectly in the palm oil sector participating;

• The RSPO was conceived and established through an inclusivemulti-stakeholder process, in which every stakeholder in thesector can take ownership of with a commitment to successfulimplementation;

• The RSPO also includes a supply chain certification standardto support trade and traceability. This covers field productionright down to downstream retailers of palm products. Thosewho comply are entitled to use the RSPO trademark on endconsumer products;

• The RSPO is part of an evolutionary process committed tocontinual improvements and a review of the Principles andCriteria every five years aimed at eventually achieving totalsustainability.

Producing nations and governments should leverage on theRSPO as the next step in sustainability standards after thenational standard has been achieved for countries that have suchpolicies. This will ensure that producer countries upgrade fromnational to international sustainability standards.

Other initiatives• Today, a number of new standard-makers for the palm oil

industry have entered the fray in the hope that they woulddrive further change. In addition to RSPO, ISPO and MSPO,we have the International Sustainability and Carbon Certification(ISCC), Roundtable of Sustainable Biomaterials (RSB), SustainableAgriculture Network (SAN), Palm Oil Innovation Group (POIG),High Carbon Stocks Approach (HCS), RSPO Next (NoDeforestation - No Peat – No Exploitation Policy) and UnileverTraceable Supply Chain Initiative (UTSCI) etc.

• Odd, yes, but standard setting is where the sustainabilitycommunity has been investing a growing proportion of itsresources in recent years.

MARKET – THE FINAL ARBITERIn the beginning, the markets may be confused about whichstandard to adopt. Should they choose just one or more? Themarkets will have to do their own analyses of which platformsare prudent and what kind of assurance the consumers want.Indeed ultimately the markets will dictate which standardscontinue to exist for the long-term.

Interestingly in a recent comparative study of the many palm oilcertification schemes, the non-profit organisation Forest PeoplesProgramme (FPP) concluded that the RSPO has the strongestset of requirements.

The study employed a comprehensive set of over 39 social andhuman rights indicators with six different themes and used thesame yardstick to assess the various schemes against a range ofcriteria including:

• Fair land acquisition, respect for customary rights and FPIC,• Treatment of smallholders,• Social and environmental safeguards,• Core labour standards,• Gender and discrimination,• Quality assurance, and• Access to remedy.

Some of the most useful outcomes flow from the standard-setting processes, rather than the standards themselves. Thenecessity to debate what a standard is for, and how it should bedeveloped, applied and verified, spurs engagement between awide range of business, government, civil society and otherstakeholders.

It is also important to be conscious of the maxim thatstandards are driven more by markets than industry orgovernments. This, of course, can make them much tougher todeal with than laws. The predictability factor can drop throughthe floor.

As always, if there is no demand, there is no reason for yourproduct to exist, whether it is RSPO, ISCC or any other palm oilstandard. But, it is not a matter of choice: these standards shouldbe embraced at different levels, as shown in the diagram (Figure

1), and fully leveraged for their respective advantages asexplained.



Sustainability


SUSTAINABILITY CHALLENGES“Ours is a world of looming challenges and

increasingly limited resources. Sustainable

development offers the best chance to

adjust our course” ….Ban Ki-Moon, UN

Secretary General, COP 18 Doha

In the foreseeable future, demand for palmoil will remain constant. In fact, demand isvery likely to increase, given higherconsumption in the developing countries,thanks to growing populations and affluence.

The greatest barrier to the growth of thepalm oil sector will be lack of awareness andmisconstrued messages arising frominitiatives promoting the banning of palm oilaltogether. There will also be a significantimpact from government policies. Forexample, at the time of writing this piece,the European Parliament is poised toendorse a legislative campaign to removepalm oil from the list of designatedrenewable fuels from 2021 overconcerns about the environmentalimpacts. Camouflaged in arguments overdeforestation and Indirect Land Use Change(ILUC), the resolution is clearly aimed atsupporting European oilseed-based biofuel,primarily rapeseed and sunflower thatstruggle to compete with palm methyl ester(PME) which is far more competitive.

There has also been a proliferation of “NoPalm Oil” labels on food products inEurope and elsewhere. Law does notrequire them nor do they provide anyuseful information to the consumer. Theyare there for one reason: to imply thatbecause a product does not contain palmoil that product is somehow nutritionally orenvironmentally superior. These are thebeginnings of a series of challenges thatpalm oil will face in some mature markets.

When a company does not use ordecides to stop the use of palm oil in itsproducts, most of time, it means that theproduct contains an alternative vegetableoil or fat. Concerns about environmentaldamage are prevalent with regard to thecultivation of any monoculture crop.Shifting to other vegetable oils will mostlikely increase the adverse environmentalimpact of edible oil production since thealternative crops will require five to eighttimes more land for the same amount ofoutput compared with palm oil.

CONCLUSIONOil palm cultivation is an importantcontributor to addressing dilemmaswhich we confront globally, such aspoverty alleviation and food security. Oilpalm is grown in some of the poorestnations in the world and over 50 per centof the cultivators are small farmers andcommunities that are highly dependenton the crop for their livelihoods.

As the most widely-produced and tradedoil seed crop and as one of the lowest-priced vegetable oils, sustainable palm oilhelps to ensure world security invegetable oils, stability in pricing and also

provides a guarantee of sustainability.Supporting the sustainable production ofpalm oil is a far more constructiveapproach than simply boycotting palm oil.

It is therefore not only desirable, but alsocritical that all players in the palm oil supplychain, including regulatory and governmentrepresentatives, rise to meet thesechallenges through accessible discussionsand the forging of strong alliances andpartnerships rather than working in silos.

The trajectory for the sustainability of thepalm oil sector must be clearly carved out.Compromising the delivery of sustainablepalm oil should not be an option.

M R ChandranAdvisor

Roundtable on Sustainable Palm Oil

Source: The Planter, Kuala Lumpur, 94 (1104):

175-179 (2018)

This article is reproduced with permission of ‘The

Planter’ and the Incorporated Society of Planters.



Nutrition

The well-known tagline:“Saturated fats cause heart diseases”

“Palm oil is a saturated fat”.

These smear campaigns are aimed at demonising tropical oilsand specifically palm oil. The negative labelling had badly affectedand stigmatised palm oil. This is a ploy used by the competitor tohide the harmful health problems caused by trans fats or“artificial saturated fats” they had produced, and throughdeceitful marketing, portrayed it as a natural saturated fat issue(https://experiencelife.com/article/big-fat-controversy/). Basedon a report published in the American Journal of PreventiveMedicine, Time magazine mentioned that Denmark had bannedtrans fats between 2003 and 2012, resulting in deaths caused bycardiovascular disease to slide from 359.9 to 210.9 per 100 000people (http://time.com/4025570/denmark-trans-fat-ban/). USFDA (Food and Drug Administration) ban only starts in 2018

(https://www.nytimes.com/2015/06/17/health/fda-gives-food-industry-three-years-eliminate-trans-fats.html).

Ancel Keys first hypothesise that dietary saturated fat causescardiovascular heart disease and should be avoided (https://en.wikipedia.org/wiki/Ancel_Keys). In 1957, he and his colleaguesembarked on an intensive survey comprising 12 000 men agedfrom 40 to 59 from 18 regions of seven countries and is knownas the “Seven Countries Study”. The report published in 1970had a decisive impact on cardiovascular disease (CVD)prevention, as it described one of the first studies to clearly showthat dietary saturated fat leads to CVD, and that the relationshipis mediated by serum cholesterol (http://www.bcmj.org/article/ancel-keys-and-lipid-hypothesis-early-breakthroughs-current-management-dyslipidemia). A physiologist by training, Ancel Keysalso ended up in the nutrition committee of the American HeartAssociation (AHA). In 1961, AHA endorsed Ancel’s hypothesis

Palm Fruit Oil:Layout 1 6/20/19 2:31 PM

as a dietary guideline (https://www.wsj.com/ar ticles/the-questionable-link-between-satur ated- fat-and-hear t-disease-1399070926). On 15 June 2017,AHA’s presidential address once againcalled for saturated fats to be replaced bypolyunsaturated and monounsaturatedfats(http://circ.ahajournals.org/content/early/2017/06/15/CIR.0000000000000510).Mr Taubes, an investigative sciencejournalist, found AHA cherry-picked anduse severely deficient data to supporttheir stand on saturated fats. He alsoproved beyond a reasonable doubt, thatthe evidence against saturated fat isinconsistent, weak, and unreliable(http://www.cardiobrief.org/2017/06/21/my-beef-with-the-ahas-saturated-fat-recommendations/). To add salt tosaturated fats’ wound, the sugar industrysecretly paid three Harvard scientists toshift the heart diseases and sugar link andblamed it on saturated fats (https://www.nytimes.com/2016/09/13/well/eat/how-the-sugar-industr y-shifted-blame-to-fat.html).

Lately, using meta-analysis, a statisticalmethod that combines many separatebut similar studies and pool the data todevelop a single conclusion, has shownthat saturated fat is not linked to heart

diseases (http://www.cam.ac.uk/research/news/new-evidence-raises-questions-about-the-link-between-fatty-acids-and-heart-disease; https://fhs.mcmaster.ca/qa/network/fats.html; http://www.bmj.com/content/351/bmj.h3978). The US DietaryGuidelines Advisory Committee iswithdrawing its warning on cholesterol,and hopefully saturated fats will followsuit, as it was reported that subsequentstudies have failed to confirm saturatedfats and heart diseases risk (https://www.aocs.org/stay- informed/read-i n fo r m/ fea tu red - a r t i c l e s /b i g - f a t -controversy-changing-opinions-about-saturated-fats-june-2015). Before going

into detail, it is necessary to understandthe relevant terms used and theirmeaning.

The term oil and fat are often usedinterchangeably to mean the same thing.Strictly speaking, there is a difference. At20ºC, oil is liquid, and fat is solid (Figure 1).Palm oil is unique as it has naturalfractions of both oil and fat. The ratio ofoil (olein) to fat (stearin) production in2005 in Malaysia was 3.5-to1(http://bepi .mpob.gov.my/news/detai l .php?id=3045). This makes palm oil highlyversatile and can be used in a lot ofapplications, be it food or non-food!

24

Nutrition



TYPES OF OILS AND FATS: THE TRAIN ANALOGYThe properties of the oils and fats are largely governed by thetypes of fatty acids present.

These fatty acids are further grouped together based on thenumber of vacant spaces within each acid.

To illustrate, think of a fatty acid as a train with a range ofcarriages. In each carriage, there are two vacant seats. If the seatsin all the carriages are taken, the train is said to be saturated. Ifone seat each in the adjoining carriage is vacant, it is said to bemonounsaturated. Likewise, two or more seats in the adjoiningcarriages are vacant, it is termed as polyunsaturated.

Polyunsaturated oils are very unstable. They have poor shelf life,which means the oil that is produced cannot be kept for longbefore turning bad (rancid). Such oil cannot be used for frying orfor making solid products such as cakes, biscuits or pastriesunless they are hydrogenated. Going back to the train analogy,hydrogenation process is like “forcing passengers to occupy thevacant seats” to stabilise it. In other words, it is an “artificial wayto saturate” the oil. The hydrogenation process also createsanother type of acid called trans fatty acid, which is a twistedform of the natural oleic acid. The analogy of the types of fattyacids are as sketched in Figure 2.

IS PALM OIL SATURATED OR UNSATURATED?This is best answered by referring to Malaysian Standard,MS814:2007. The fatty acid composition for palm oil is as quotedin Table 1 (Adapted from Malaysian Standard, MS814:2007). Theoverall composition is:

Palm oil Mean

Saturated 49.3%

Unsaturated 50.6%

The points to note are:

• The arithmetic mean shows that palm oil is more than 50 percent unsaturated. By a simple majority rule, palm oil is “unsaturated”.It is wrong to label palm oil as “saturated”.

• Apart from having natural liquid and solid fractions, there isanother feature about palm oil, it naturally has nearly equalsaturated and unsaturated portions.

This is a classic case of the proverbial “half empty or half full glassof water” expression. How one interprets it depends on one’sstate of mind and intention. This is best defined by theCambridge dictionary, which says:

“The glass is half empty” refers to an attitude of alwaysthinking about the bad things in a situation rather than thegood ones.

As evident from the above-mentioned, palm oil has more oilthan fat and it is slightly more unsaturated than saturated. Basedon these facts, palm oil should be labelled as an “unsaturated oil”.One can only surmise that whoever that labelled palm oil as a“saturated fat” choose to disregard or distort the facts becauseof ulterior motives.

SATURATED FAT AND HEART DISEASEIn the 1950s, heart disease was America’s number one killer andwhen President Eisenhower had a heart attack in 1955, therewas a desperate need for answers (https://www.wsj.com/articles/the-questionable-link-between-saturated-fat-and-heart-disease1399070926). It was Ancel Keys who hypothesised that dietarysaturated fat causes cardiovascular heart disease and should beavoided (https://en.wikipedia.org/wiki/ Ancel_Keys). The suggestion,as can be expected, was readily accepted.

In 1958, Keys’s subsequent observational “Seven CountriesStudy” demonstrated heart disease could be linked to poornutrition. Keys, a physiologist, also ended up on the nutritioncommittee of AHA. In 1961, AHA issued the country’s first everguidelines targeting saturated fat (https://www.wsj.com/articles/



Nutrition


the-questionable-link-between-saturated-fat-and-heart-disease-1399070926). The guidelines had remained unchanged for manydecades. On 15 June 2017, AHA’s stand was reaffirmed via itspresidential address, which concluded that based on evidence,called for a reduction in saturated fat and replace it withpolyunsaturated and monounsaturated fat (http://circ.ahajournals.org/content/early/2017/06/15/CIR.0000000000000510).

American Heart Association cherry picking data onsaturated fatsMr Gary Taubes, an award-winning science writer, author and aprominent investigative journalist took AHA to task in a postpublished by Cardio Brief, a source for new and importantinformation about cardiovascular medicine.

AHA pretends to be science-based but is not. There is no strong

scientific basis to support their guidelines but are opinions. Their

recommendation that saturated fats be replaced with polyunsaturated

fats, is based on cherry-picked and severely deficient data. With

the devastating precision of a prosecuting attorney, Taubes lays

out the case against the AHA paper. He doesn’t prove that

saturated fat is innocent, but that’s not his goal. He does prove,

beyond a reasonable doubt, that the evidence against saturated

fat is inconsistent, weak, and unreliable. “If the data doesn’t exist,

you must acquit,”I suppose he might say (http://www.cardiobrief.org/

2017/06/21/my-beef-with-the-ahas-saturated-fat-recommendations/).

Taubes, was also quoted in Olive Health News, said “The AHA

ignores results from some of the biggest studies ever conducted,

including the Minnesota Coronary Survey, Sydney Heart Study

and the Women’s Health Initiative” (https://www.oliveoiltimes.

com/olive-oil-health-news/experts-dispute-aha-warning-saturated-

fats-coconut-oil/58005).

One such example is the Sydney Heart Study quoted below.

Sydney (Diet) Heart studyIn this cohort, substituting dietary linoleic acid (a polyunsaturated

acid) in place of saturated fats increased the rates of death fromall causes, coronary heart disease, and cardiovascular disease. Anupdated meta-analysis of linoleic acid intervention trials showedno evidence of cardiovascular benefit. These findings could haveimportant implications for worldwide dietary advice tosubstitute omega 6 linoleic acid, or polyunsaturated fats ingeneral, for saturated fats (http://www.bmj.com/content/346/bmj.e8707). These results clearly contradict AHA’sguidelines and as Mr Taubes quite rightly said, the results wereignored.



Nutritional policy: Personal ambition, bad science,politics and biasWall Street Journal also ran an article by Nina Teicholz, anotherinvestigative journalist and author of the International (and NewYork Times) bestseller, The Big Fat Surprise. She too questionedthe saturated fat link. The nutritional policy, she writes, had beenderailed over the past half-century by a mixture of personalambition, bad science, politics and bias.

She added that there is no solid evidence to back up the ideathat saturated fats cause disease. Critics have pointed out thatDr Keys violated several basic scientific norms in his study. Forone, he did not choose countries randomly but instead selectedonly those likely to prove his beliefs, including Yugoslavia, Finlandand Italy (https://www.wsj.com/articles/the-questionable-link-between-saturated-fat-and-heart-disease-1399070926). Keys’soriginal studies covered twenty-two countries out of which onlyseven countries were chosen.

Saturated fat and heart disease: A questionable linkIn the last four years, two meta-analysis studies on saturated fatswere published in reputable journals are mentioned below. Alsoincluded is a diet intervention study from Norway. Meta-analysisis a method for systematically combining pertinent qualitativeand quantitative study data from several selected studies todevelop a single conclusion that has greater statistical power(https://en.wikipedia.org/wiki/Meta-analysis).

i. New study: Total saturated fatty acids are not linked to coronary

disease risk

On 18 March 2014, The Annals of Internal Medicine publisheda repor t of an international group led by University ofCambridge, pooled data from 72 separate studies that includedover 600 000 participants in 18 different countries. Theirpooled analysis showed that whether measured in thebloodstream or as a component of diet, total saturated fattyacid was not linked to coronary disease risk (http://www.cam.ac.uk/research/news/new-evidence-raises-questions-about-the-link-between-fatty-acids-and-heart-disease).

ii. Saturated fats have no association to increase heart disease

A study by McMaster University, Canada which analysedresults from 50 observational studies was published in theBritish Medical Journal in 2015. The study found no associationbetween a high intake of saturated fat and an increased riskof heart disease and other life-threatening diseases (https://

fhs.mcmaster.ca/qa/network/fats.html;http://www.bmj.com/ content/351/bmj.h3978).

iii. A high intake of good quality saturated fat tolerable, maybe

even healthy

Another Norwegian diet intervention study was publishedin The American Journal of Clinical Nutrition, 27 December2016. The results indicated that most people probablytolerated a high intake of saturated fat well, if the fat qualityis good, and the total energy intake is not too high. It mayeven be healthy (https://www.medicalnewstoday.com/articles/314693.php).

In June 2015, American Oil Chemists Society (AOCS) reporteda promising sign that the US Dietary Guidelines AdvisoryCommittee is withdrawing its warning on cholesterol. Perhapssaturated fats will follow suit. These main points were extractedfrom an article in AOCS’s publication.

AOCS: Big fat controversy – Changing opinions aboutsaturated fatsNutritionists have long vilified saturated fat for its propensity toraise LDL (“bad”) cholesterol levels in the blood. Although initialepidemiological studies associated saturated fat intake with heartdisease risk, subsequent studies have failed to confirm the link.Saturated fat raises HDL (“good”) cholesterol levels, perhapsameliorating its effects on LDL cholesterol. An unintendedconsequence of a low-fat diet may be increased carbohydrateintake, which could actually raise heart disease risk compared toa higher-fat diet (https://www.aocs.org/stay-informed/read-inform/featured-articles/big-fat-controversy-changing-opinions-about-saturated-fats-june-2015).

Not all saturated fats are the sameA closer look at only the saturated fatty acids components ofboth animals and vegetable oils may help us understand thesituation better (Table 2).

In palm oil, the predominant saturated acid is palmitic acid, and,to a lesser extent, stearic acid. The Cambridge team concluded:

“Within saturated fatty acid, the researchers found weakpositive associations between circulating palmitic and stearicacids (found largely in palm oil and animal fats respectively)and cardiovascular disease…” (http://www.cam.ac.uk/research/news/new-evidence-raises-questions-about-the-link-between-fatty-acids-and-heart-disease).



Nutrition

Palm oil, the fall guyThe saturated fat mentioned so far referred mainly to red meatand dairy products. AHA’s recommendation is to switch topolyunsaturated vegetable oils, namely corn, soybean and canola.These oils require hydrogenation to mimic saturated oil. Whenhealth problems related to trans fats arose, labelling tropical oilsas “saturated fat” fits the bill as no distinction is made betweenartificial or natural saturated fat. This made palm oil the main fallguy.

THE REAL HEALTH CULPRIT IS TRANS FATSDr Mary Enig, an internationally renowned nutritionist and lipidsbiochemist, is known for her unconventional positions on therole saturated fats play in diet and health. Her views appeared in“The big fat controversy” (https://experiencelife.com/article/big-fat-controversy).

The real health culprit is not saturated fats but rather trans fats,

which were introduced into the food supply in great quantity by

the soy industry in the 1950s. This is when partially hydrogenated

fats were developed to imitate naturally saturated fats and to

expedite the production of processed foods.

To create the solid substance, manufacturers typically take vegetable

fats and bombard them with hydrogen, turning them into the solids

used in commercial baked goods or to make shortening from

vegetable oil. “They have a different shaping than the normal

kind of fatty acids that are in the food supply or in the tissues

of the body,” Enig says. “Trans fats also have a higher melting

point, all of which can make them very harmful to the system.”

The food industry has so cleverly marketed these trans fats,

insists Enig, and so regularly bad-mouthed saturated fats, that in

the last 30 years their dogma has been accepted as gospel by

the medical establishment – and, by extension, the general public,

which is why low-fat, processed foods are so prevalent and

popular these days.

Trans fats are deadlyConsumption of industrial trans fats was associated with a 34per cent increase in death for any reason (https://fhs.mcmaster.ca/qa/network/fats.html; http://www.bmj.com/content/351/bmj.h3978).Time magazine carried an article that Denmark’s trans-fat ban in2004 worked based on an article published in the AmericanJournal of Preventive Medicine on 9 September 2015. Between2003 and 2012, deaths caused by cardiovascular disease slid

from 359.9 to 210.9 per 100 000 people, a 9-point drop.Between 2004 and 2006, cardiovascular disease mortality ratesdropped by 4 per cent - the equivalent to 750 fewer deaths peryear in that period (http://time.com/4025570/denmark-trans-fat-ban/).

On 16 June 2015, the US Food and Drug Administration gavethe food industry three years to eliminate artery-cloggingartificial trans fats from the food supply, a long-awaited step thatcapped years of effort by consumer groups and is expected tosave thousands of lives a year (https://www.nytimes.com/2015/06/17/health/fda-gives-food-industr y-three-years-eliminate-trans-fats.html). On 14 August 2015, in the BritishMedical Journal, experts from Oxford and Liverpool Universitiessuggested that banning trans fats from processed foods couldsave around 7 200 deaths from heart disease in England over thenext five years (http://www.bmj.com/content/351/bmj.h4583). InMalaysia, popular commercial pastry shortening samples werefound to contain up to 34.4 per cent trans fats (http://palmoilis.mpob. gov.my/publications/TOT/TT540.pdf).

HARVARD SCIENTISTS PAID TO SHIFT BLAMEFROM SUGAR TO SATURATED FATThe Journal of the American Medical Association (JAMA)dropped the bombshell by reporting that the sugar industry paidscientists to shift blame on saturated fat. This was picked up byvarious newspapers and excerpts from The New York Times on



12 September 2016 (https://www.nytimes.com/2016/09/13/well/eat/how-the-sugar-industry-shifted-blame-to-fat.html).

The sugar industry paid scientists in the 1960s to play down the

link between sugar and heart disease and promote saturated

fat as the culprit instead, newly released historical documents show.

The internal sugar industry documents, recently discovered by a

researcher at the University of California, San Francisco, and

published in JAMA Internal Medicine, suggest that five decades

of research into the role of nutrition and heart disease, including

many of today’s dietary recommendations, may have been

largely shaped by the sugar industry.

“They were able to derail the discussion about sugar for decades,”

said Stanton Glantz, a professor of medicine at U.C.S.F. and an author

of the JAMA Internal Medicine paper.

The documents show that a trade group called the Sugar Research

Foundation, known today as the Sugar Association, paid three

Harvard scientists the equivalent of about $50,000 in today’s

dollars to publish a 1967 review of research on sugar, fat and

heart disease. The studies used in the review were handpicked

by the sugar group, and the article, which was published in the

prestigious New England Journal of Medicine, minimized the link

between sugar and heart health and cast aspersions on the role

of saturated fat.

Even though the influence-peddling revealed in the documents

dates back nearly 50 years, more recent reports show that the

food industry has continued to influence nutrition science.

CONCLUSIONPalm oil is a good oil. It is tainted by unscrupulous competitorsin a non-level oils and fats playing field. Currently, there is anoutstanding issue of 3 MCPD, a suspected carcinogen to bemanaged. Palm oil is non-GMO and is mechanically extracted.This is a very strong plus point which will give the oil an edgeover its competitors - oilseeds that are mainly solvent extracted.Palm oil extraction efficiency is about 92 per cent compared toaround 98 per cent with solvent. Preventing remnant oilrecovered from being added back into the system to increase oilextraction is the first step in preventing 3 MCPD. As consumersourselves, we must adhere to the universal rule: “Food safetymust precede profits”, failing which, we are no better than themanufacturers of trans fats!

Ng Say Bock & Vincent Ng

Source: The Planter, Kuala Lumpur, 94 (1103): 79-88 (2018)

This article is reproduced with permission of ‘The Planter’ and the Incorporated Society

of Planters.



Planter’s Diary

Borge Bek-Nielsen’s first boss,Axel Lindquist, was accustomedto fly a British built two-seater

Auster J2 high wing monoplane fromUnited Plantations’ Ulu Bernam Estate.He would fly to meetings at thecompany’s headquarters at Jendarata andfor weekends to Penang. Each venue wasless than half an hour’s flying time fromUlu Bernam. Ipoh, the capital of Perak,was an hour away, and the bright lights ofKuala Lumpur might be up to two hoursaway during the rainy season.

When Bek had completed his palm oilmill training at Ulu Bernam and after hehad sat for the Steam Certificate, Axeltaught him how to fly. Five years later, hebought his first aircraft, a fully aerobaticBellanca Citabria. It was the one-timeproperty of a member of the PenangAero Club – a serving US Colonel in the

Vietnam War who, on being offeredpromotion to command a US PacificIsland airbase, offered his hobby-horse forsale.

Within five years of Bek starting work atUlu Bernam, a plantation in Kedahsignalled its need for a palm oil mill. Byany form of late 1950s reckoning, Gebr.Stork’s oil palm mill monopoly fromAmsterdam was a questionable matchfor ‘Made at Ulu Bernam’ know-how;even Stork’s very mill buildings weresupplied from Holland. Then Malaya hadno domestic commercial alternatives toGebr. Storks’ time-proven, reliable palmoil mills.

Bek hired a part-time draughtsman towork for him on mill design at UluBernam. His motto, ‘Made at Ulu Bernam’,moved up a notch to ‘Designed and

made at Ulu Bernam’. He found a civilengineering contractor, Mr Lee Fook Sumof Capital Engineering, Klang. He waswilling to prefabricate all-steel buildings inhis yard, as well as carry out the on-sitecivil engineering work required forbuilding and machinery foundations.Together, they found workmen who weretrained in the shipping industry, andrailway and workshop machineryinstallation.

Bek undertook to design the larger itemsof palm oil mill mechanical inventoryitems, including the water purificationsystem, fresh fruit bunch ramp, horizontalsterilisers, elevators, conveyors, pressingstation, palm oil separation, water and oiltanks and the nut plant. He continued tomake use of Stork fruit digesters, Storkautomatic oil recovery presses, Storkpalm oil sludge centrifuges (some of

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which are still in use 60 years later!) andStork nutcrackers.

The contracts were duly signed and Bek’sfirst mill construction was set in motion.He made it a point to pay an afternoonvisit to the Kedah plantation site once ortwice a week to monitor the physicalprogress. Every now and again, a mini-crisis would loom; fittings supplied didn’tmatch their foundations or a supportgirder went missing somewhere alongthe supply line.

Shocking endCame the day – actually one fineafternoon – when Bek requested a testrun at the new mill. He was watchingsome adjustments being carried outwhen the patter of rain reminded him ofhis schedule. He set off from the Kedahairfield within half an hour, only to findthat a thunderstorm had developedalong his route back to Ulu Bernam.

His only course was to fly southwardsalong the Kedah coast in the fadingevening light. The storm passed while hewas – by his aircraft clock – only a fewminutes out from Ulu Bernam, but hewas obliged to locate his airstrip from anunfamiliar direction.

It was almost dark. He flew across a newrubber replanting site on the coastal flats– across which a bicycle lamp was steadilymaking its way. A straight road appearedbehind the cyclist. Bek made a U-turn inthe Citabria and landed on the roadbehind the worker.

He jumped out to ask one surprisedIndian man of his actual whereabouts. Theman explained. In a flash he remembered

– a rubber replanting site less than 10miles cross-country from Ulu Bernam.Good. Now all he needed to do wasbuzz the Ulu Bernam mill and wait for theLand Rover to light up the other end ofhis airfield with two sets of runwayindicators; it had all been done before.

But first there was the small matter ofdeparture. He requested the awestruckIndian man to cycle to the other end ofthe field and stand with his kerosenelamp in the centre of the road. Done.Good.

He locked the parking brake and turnedover the Lycoming engine. In a fewmoments, the hot machine was runningsmoothly. Sitting on his briefcase, he couldjust make out the wavering kerosenelamp over the top of the engine cowling;he locked his door panel, turned on thelanding light, opened the throttle fully andreleased the brake. The Citabria rolledsmoothly down the road and Bek easedthe stick forward to raise the tail wheel.The lamp down the road wavered as hisspeed was building up.

Without warning, his left-hand undercarriagefell away; the propeller hit the road witha ‘whop’ and a terrible snap. Bek wasthrown against the cabin roof and theCitabria slid with a hiss into the roadsidedrain. He somehow found his briefcaseand managed to scramble clear.

The Indian man reappeared out of thegloom. “Tuan,” he said, “you rolled off toone side of the centerfield bridge.”

Bek said: “What to do. Too late now. Fiftyringgit to cycle me back opposite to UluBernam, please?”

My God, half a month’s wages to cycle awhite man back home. Just wait till hecould tell his friends on his return! Bek setoff on the back of the old bicycle, the firsttime he’d done that since he was atschool. The journey took over an hour.

The Bernam River ferry attendant,dozing in his cabin on the side of theSungei Samak, jumped up as surprised asif he had seen a ghost. He burst intoroars of laughter at the Indian man’sexplanation of the aircraft landing in thegloaming on the rubber replanting road;then later ditching into the roadsidedrain. Bek accepted a hastily-made hotdrink from the ferryman’s wife beforesetting off on the five-minute journeyacross the river.

Muthu, Bek’s cook, cried when he heardabout the lucky escape and wanted tocall a Malay pawang to interpret theomens. Some Ulu Bernam mill staffrushed over to the house. Bek normallynever drank by himself but, when hefinally sank into his accustomed chair, hewas hit by the shakes. It took him fully 10minutes to settle down, after which hetook stock of what had happened.

He told himself: “Well, better count thatas ‘a couple of my nine lives’ used up. Stilla handful to go!”

The next morning Ralph Grut, GeneralManager at Jendarata confirmed it: “Bek,next time please try your luck only once.Twice is pushing it!”

Moray K Graham

Retired Planter


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In early February, I went to Jesselton to meet Olive and Fiona. On

arrival, I was asked to go immediately to the Secretariat to brief the

Governor and the Director of Agriculture on the extent of the flood

damage. Sir William was anxious to learn if Unilever still intended to

continue with the project.

He had just been informed by Cadburys that they had decided to

abandon the cocoa plantation they had started only a few months

before on the Labuk, a few miles upstream from us. Also, Sir

William was fully aware that it was flooding in earlier years which

had caused Imperial Tobacco to decide to withdraw from tobacco

production in the colony.

With my fingers crossed, I assured him with as much confidence

as I could muster, that UPI in London was well used to problems

of this nature in other parts of the world, and that Unilever was

very unlikely to be put off by an unexpected flood.

Olive and Fiona arrived at Jesselton Airport the next day. It was the first time that Olive had

been separated from Catriona since she was born, and she was missing her already. Since Catriona was only

six, she was not able to write to us for the first few months. However Olive had given her a tape-recorder

and this enabled us to keep in touch.

The next time we were to see Catriona was at the summer holidays. Her first trip as an ‘unaccompanied

child’ was to prove something of an Odyssey. She was sent by train from Devon to London, where she was

met by one of the secretaries from Plantations Group. That evening she was taken to Heathrow and put

on a plane to Singapore, where she was met by a Ground Hostess and accommodated in Raffles Hotel for

the night.

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The next day, she was put on the Singapore-

Jesselton flight. Olive and I tried to get over to

Jesselton to meet her, but the flights were full, so

Catriona had to change planes in Jesselton for the

flight to Sandakan.

When the plane touched down, Olive and I

watched eagerly as passenger after passenger

disembarked. There was no sign of Catriona. She

was not on the plane. The Sandakan Airport staff

could tell us nothing except that her name was on

the passenger list and she seemed to have gone

missing.

We were frantic. We had visions of white slavers or

kidnappers having made off with her. We enquired

of some of the disembarking passengers. One or

two said that a little European girl had been with

them as far as Jesselton but she had not joined the

Sandakan flight. I phoned the Borneo Airways desk

at Jesselton.

Eventually I found an official who said: “Now that

you mention it, I did notice a little girl sitting on a

suitcase in a corner of the departure lounge. I’ll go

and see if she is still there.”

Eventually she was tracked down. Catriona said that

she had been told to sit in the corner and not to

move until someone came to collect her. Obviously

they forgot about her and the plane took off

without her. After sitting there for three hours or

so, she was beginning to get worried.

There was no plane from Jesselton to Sandakan

that night, so one of the Ground Hostesses took

her home with her for the night. Catriona trotted

off the plane at Sandakan Airport the next morning

in her straw hat and school blazer.

She was bright and cheerful although she had by

now been four days in transit. She said she’d had a

lovely time with the Hostess in Jesselton. They had

gone for a moonlight barbeque on the beach with

a lot of young Chinese friends.

When I think of some of the mothers in UK

nowadays, who will not risk letting children of 11

travel a few hundred yards to school by themselves,

it makes me shudder to think of our little six-year-

old travelling around the world on her own. In due

course all three of the girls became quite blasé

about travelling unaccompanied. There was often a

crowd of children travelling together and they

usually had a wonderful time.

Free fertiliser

Back at the estate, we patched up the Rest House

as well as we could. I moved into it for a few weeks

until our permanent house could be completed.

One evening I was sitting at the bar feeling rather

gloomy. Olive and Fiona were still living in Sandakan

and I was on my own amidst the ruins of our first

two years’ work.

Old Ibrahim paddled across the river to pay me a

visit. It reminded me of my first few days in October



Publications

1960. We lit up our pipes and discussed the effect

of the floods. Ibrahim was as cheerful as ever. His

house, being on the other side of the river, had

been out of the fiercest flow of the flood waters,

and he had already carried out the few repairs that

were necessary.

He said he had heard that the Assistant District

Officer and all the government officials were to be

moved permanently down to Beluran. The

Chinese shopkeepers from Klagan were all rich, he

said. They could all look after themselves. Tumpeh

was already starting to build a new shophouse on

the estate.

Had the Tungud Kadazans been badly hit, I asked.

Ibrahim laughed. They were grateful, he said, that

the company had provided them with free food

and shelter during the peak of the floods.

However, by the middle of the year, they would

probably be better off than they would be in a year

without flooding. They were now frantically busy

planting paddy and vegetables. After a flood,

Ibrahim said, they always got marvellous crops

because of the rich deposits of silt, which were left

behind.

“Rich deposits of silt!” Ibrahim had said. This made

me think. We had just had millions of tons of rich

deposits of silt, distributed free of charge all over

our concession to an average depth of more than

a foot!

We had estimated that we would spend about

$200 per acre on fertilisers during the palms’ three-

year-long immature period. If the deposits of silt

permitted us to reduce the cost of fertilisers by

half, then we could be looking at a saving of perhaps

as much as half a million dollars on our fertiliser

costs over the next few years.

Against this, the cost of replanting the dead palms,

and repairing the roads and drains, would be trivial.

After all, the temporary management houses which

we had lost were due to be replaced by permanent

buildings in the course of the next year anyhow.

I began to think about the wording of my next

monthly report to London: ‘In the first three

months of 1963, we had a marvellous stroke of luck

when the alluvial deposits from an exceptionally

high flood helped us reduce our costs to maturity

by half a million dollars!’

Well, as our workers used to say in West Africa: "All

things by try!"

Datuk Leslie Davidson

Author, East of Kinabalu

Former Chairman, Unilever Plantations International

This is the second part of an edited chapter from the book

published in 2007. It can be purchased from the Incorporated

Society of Planters; email: [email protected]



Leslie Davidson was born inAberdeen, Scotland, on Jan 26,1931 and had his education at

Gordon’s College. After he did NationalService as a young officer in Kenya, hestarted planting in Pamol Estate nearKluang, Johor, in 1951. It was not a goodperiod for planters, due to theEmergency during the Communistinsurgency in Malaya. He was mistakenlyreported killed a few times. In 1957, hewas seconded to Cameroon and later toNigeria.

From 1960-69, he worked in Sabah todevelop the Pamol oil palm plantationand mill on the Labuk River, nearSandakan. In 1970, he returned to Kluangto become Chairman of the two Unileverplantations. He served on several nationalcommittees in the planting industry.

He left Malaysia for London to becomeVice-Chairman of Unilever InternationalPlantations Group in 1974 and becamethe Chairman in 1982. During his time inLondon, he started oil palm businesses inThailand and Colombia, and the Groupdoubled in size with the acquisition ofBrook Bond’s tea plantations in India andEast Africa.

He was Chairman of Unifield in Bedford,the first large-scale tissue culture unit

which planted the first tissue cultureoil palm on Pamol Estate in Kluang.

He was Chairman of the TropicalGrowers Association in London

for two years and was the first Chairmanof the International Centre for PlantationStudies at Silsoe.

On retirement from Unilever at the ageof 61, Leslie Davidson joined the board ofBertam Holdings, and retired as DeputyChairman at the age of 70 in 2001.

As a young man, he helped to developthe oil palm industry in Sabah. He plantedoil palm on an old tobacco estate. He hadbeen sent there by Unilever because ofhis experience and because he hadpassed the ISP examinations in bothMalay and Hakka.

He went up the Labuk River, recruited hisfirst worker and started Pamol’s TungudOil Palm Estate. Although CDC hadsome oil palm on an abaca estate inTawau, Tungud became the first oil palmestate in Sabah.

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In the first few years, Leslie Davidson andhis family lived in an attap hut on thebank of the Labuk River. In the floods of1963, the hut was washed away. In spiteof the floods, he managed to develop anoil palm estate which covered over20,000 acres. He wrote a book East of

Kinabalu, detailing his life and thechallenges faced.

But the standard of pollination was low.The company needed over 500 workersto hand-pollinate the palms daily. As ayoung planter, he had seen in Cameroonthat the fruit got pollinated even in thewettest months, and had noticed a lot ofinsects around the flowers. He was surethat in Africa, where the oil palm camefrom, they were insect-pollinated.

In 1974, on his return to London asDeputy Chairman of Unilever PlantationsInternational, he persuaded the companyto let him use his idea. He had severalmeetings in London with Dr Greathead,the Director of the CommonwealthInstitute for Biological Control (CIBC)

The CIBC agreed to send an eminentexpert, Dr Rahman Syed, to Cameroonto investigate. Dr Rahman found severalpollinating insects in Africa. The mosteffective pollinator proved to beElaeidobius kamerunicus. Female flowers,when ready for pollination, have a way ofattracting these pollen-covered weevils.Dr Rahman found that in some areas ofPeninsular Malaysia and Indonesia, the oilpalm was being partially pollinated bythrips. However, they were not as efficientas the weevils.

Dr Rahman and the CIBC carried outfour years of research on Pamol’s LobeEstate in Cameroon to ensure that theweevils were exclusive to the oil palmand did not damage crops.

Finally, a team of Malaysian governmentscientists was sent to Cameroon todouble–check the findings. The weevilswere proved safe and, after seven monthsof quarantine in Kew Gardens and inKuala Lumpur, the government allowedfor their release – 2,000 insects were setfree on Unilever’s Mamor Estate on Feb21, 1981. From this small beginning, theinsects spread very fast in Malaysia andthen to Indonesia, Thailand, PNG andSolomon Islands.

The improved pollination brought abouta big increase in crops. The Minister ofPrimary Industries estimated that betterpollination in 1982 resulted in an increaseof 400,000 tonnes of palm oil and300,000 tonnes of palm kernels. Now, ofcourse, the benefit is much more with theincrease in planted area. In Sabah, theplanted area under oil palm grew from100,000 ha in 1980, the year beforekamerunicus was introduced, to over amillion hectares in 2000. The productionof palm oil grew from zero in 1967 toover 3 million tonnes in 2000.

The weevils did not confine their activitiesto plantations alone. They were of evengreater benefit to smallholders who didnot have the facilities for collecting anddrying pollen for hand-pollination. Sabahrewarded both Leslie Davidson and DrRahman Syed with the title of ‘Datuk’.

Leslie Davidson has contributed his ideasin other ways as well. One of these wasthe buffalo system of fruit transport. It wasused widely in the 1970s and 1980s, andhelped harvesters who no longer had tocarry bunches in baskets. They could cutmore bunches and raise their earnings.

Here his biggest problems were not theworkers who accepted the idea or thebuffaloes, which were ever willing towork. It was his managers he had a job toconvince. He contributed papers atconferences in Kuala Lumpur onproductivity, and trained many planters tothink of new ways.

He was the winner of the 1992 WorldVision Award for Development Initiative,a recognition given to individuals whopersevere in their contribution tosustainable development. In 2008, hereceived the prestigious Merdeka Awardin the ‘Outstanding Contribution to thePeople of Malaysia’ category.

Memoriam Datuk Leslie (B):Layout 1 6/13/19 6:11 PM


Today, my mind turns to a subject I did not think I wouldhave to write about, and it is the passing of Tan Sri Dato'Dr Lee Shin Cheng on the evening of June 1, 2019, twodays short of his 80th birthday.

I first heard about him when I was working for SimeDarby Plantations in Sabah in the 1980s, looking forplantation land to buy. Many big companies were doingthat, too. But IOI Corporation raced ahead. It boughtBaturong, a big piece of land that ran for miles on the leftside of the Tawau-Lahad Datu road. I had my eye on itbut did not get far.

With his team and banks in support, Tan Sri Lee went onto buy Halusah estate near the Sandakan road and,further in, he bought Bendera, Sungei Kretam and BatuPakis. By the Kinabatangan, he netted Gold Bond, VeryGood Estate, and Best Cocoa. Cocoa prices stayeddown. He switched to oil palm and changed the namesof the estates as well.

Tan Sri Lee chose only areas with the best soils. Hedeveloped Morisem, by the Kinabatangan. The palms weredark green. I heard he was there often. He went ahead tobuy Lindbar, with a river flowing by it. He acquired SakilanDesa, by the Labuk road. The tall and stately Albizziasoftwood was soon gone, to be replaced with oil palm. Hebought Ladang Sabah nearby, and later he went on to buyPamol Plantations, which had areas upriver where I onceworked under the former owner, Unilever.

IOI bought Pamol Plantations from Unilever through abidding process where serious buyers were shown thedetails in an information room in Kuala Lumpur andvisited the areas both in Kluang and in Sabah. I went withanother bidder, and I knew every corner.

But IOI won the bid. It turned out that luck was with TanSri Lee, and his bold moves paid off as the price of palmoil went up. He led his team by arriving even on holidaysand weekends, to see that the crop was brought in andthat managers walked the fields. He worked to pleasethe bankers and the analysts. He was as good as his wordin getting results.

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38 GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.16 ISSUE 2, 2019

His strictness was legendary, but it was also true that he wouldkeep his good people, even from the companies that heacquired. That was how managers like Kuppusamy s/o Sinnappanwere asked to stay and got promoted in Pamol Kluang; as wellas N B Sudhakaran, an engineer, who is now the PlantationsDirector in the Group.

Later, I was in the downstream business of Sime Darby, and turnedmy attention to refineries for edible oils and oleochemicals. Ivisited Palmco, for it was also for sale. Others had come to studyit too, but IOI persevered, and brought it into the IOI fold. In 2002,he bought Unilever’s refineries, Loders Croklaan, based in Holland.

Back in Johor, I once helped in a bid for another client when theoleochemical plant Pan Century was up for sale. The plant wasnear the refinery I used to run in Pasir Gudang, This time Ibrought a team to check closely. I advised my clients on the priceto quote, but IOI won.

But probably Tan Sri Lee’s most happy achievement was buyingthe Dunlop plantations. They belonged to the Dunlop group ofUK. Many had tried to buy but failed, until Multipurpose HoldingsBhd bought the estates and later, he bought from them.

The plantations, such as Gomali and Paya Lang in Johor, had highstandards. Sagil, next to where I once worked in Tangkak, had agolf course and a fine clubhouse, and the road was tarred up tothe bungalows. Oil palm replaced cocoa, and the yield wasamong the highest in the group. Tan Sri Lee was said to havebeen turned away by Dunlop from a job he had applied forabout 20 years earlier. He came back as the owner.

Tan Sri Lee was one who would choose a target, collect thefacts and make his move. He had courage. But he was also notafraid to change his mind. He had walked away from deals andhe did that not only with plantations, but also with properties.That was where he was expanding next, and he was mostlysuccessful of course, converting areas into housing andtownships when the time was right. That included the place inPutrajaya where he built his head office, the Marriott and LeMeridien, and shopping malls. There were plantations beforethey became townships.

As we know, over time the property business was listed on itsown, with a young team. It went on to develop properties, suchas in Johor and Singapore. The latest was at Xiamen, in Fujian,China. At Xiamen, I was struck by the prosperity in the city. Theyoung people had handphones and electric scooters, and were

learning English seriously. The roads, hotels and facilities werebuilt to welcome foreign tourists.

I did not see the IOI houses, but I did pass by the IOI specialtyfats plant. It was new and now owned 70% by Bunge followingthe sale of shares to them on most of the downstream plants.Tan Sri Lee knew the value of partners who could help in theintegration of business.

There was only one moment when I saw him beingdisappointed. It was the time he had to tell me he would verymuch like to own a plantation in Johor where he had lost his bid.On this one, I was advising the winner. But when I told him laterthat there would be no deal, he let the matter rest.

One day, he had asked about my work as a consultant – if therewas anything I could do for him on the plantation. I had to say:“From all I had heard about what you are doing, there is nothingI can add.”

I said that sincerely. He was a true field man, who would checkevery detail, from fertilising, to collection of loose fruit andchecking on the ripeness of bunches being harvested. If possible,he would check and talk to every tree. He did not takeweekends seriously, and he worked with a passion.

He had so much energy that, when he entered a room, it waselectric as he made a beeline for someone he would recogniseand like to meet. His eyes were bright and alive.

So, it was a surprise to hear through the grapevine that he wasnot well. It proved to be true from the rare photos that cameout in the press, and soon the news came that he was gone.

So, a giant in the industry has passed away. We will miss him. Weare sure the businesses he left behind are stronger than ever; hischildren and their team will build them further, and most likely inthe same way he had done.

He did it all because he did not get a job he had applied for. Thatwas just as well. That job was not what life had planned for him.

Mahbob AbdullahPlantation Consultant

This slightly edited article is reproduced with permission of ‘Focus Malaysia’.

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