My Experience in Malaysia - Part 1

For those who are curious about Borneo and its incredibly rich biodiversity or eager to know more about the ‘Dayaks’ of Sarawak, or are interested in understanding better what are the benefits and risks of biodiesel development and palm oil plantations expansion in this part of the world, I invite you to take a tour through the five weeks I spent in this amazing region doing the fieldwork for my thesis on “the Effects of Biodiesel in Producer Developing Countries”.

WEEK 1 : Interviews in KL - Understanding the National Perspective

Kuala Lumpur is a city full of contrasts. A mix of past in the present, a modern cosmopolitan city carrying spirit of progress but reminding ancient cultural tradition. A city in expansion but still working into its connection. Public transport? Mmm… no, car or taxi if you need to move around in KL. Technology yes! Everywhere, gigantic malls and fairs full of all the latest electronics you could imagine. And of course great food and nice bars, especially those with fantastic view to the Petronas Towers … This week run fast carrying out interviews with different key stakeholders of the biodiesel and sustainable development sphere. Great smiles and support opened me the doors to understand better what is the national perspective on palm oil and biodiesel development in Malaysia. Summing up the results of this week I found out that palm oil as feedstock for biodiesel has a lot of advantages in comparison to other oil crops. It has the highest yield and a very high I/O ratio in its energy balance. Moreover I understood that the main driver for palm biodiesel development in Malaysia is palm oil price stabilization. They use biodiesel as leverage mechanism to increase palm oil demand and thus its commodity price. To date, the result is incontestable, palm oil market price has been rising since global interest and demand for biodiesel started escalating, in particular in EU countries. In short, the main benefits of palm biodiesel production for Malaysia are: national revenues, since the palm oil industry represents the third largest contributor to export earnings for Malaysia; it contributes to its energy security by lessening the reliance on fossil fuels and diversifying its energy portfolio; it serves as climate change mitigation measure and allows cleaner fuel consumption; and finally, it contributes to the generation of employment and development of basic services and infrastructure in the rural areas. The key issues for biodiesel development in the country are several and are mostly related to market dynamics and spot price fluctuations. However, sustainability was also recognized as a key issue and although negative impacts were acknowledge, also the willingness to introduce sustainable practices that can cope with future challenges. Having read about the national perspective let’s go now on the ground and see what happens if we walk through the sea of palms…


WEEKS 2 - 3: Ground realities - The First Case Study

The second and third weeks I spent in Kuching, capital of the State of Sarawak in the Island of Borneo, East Malaysia. Sarawak fascinated me. The people, the food, the atmosphere and the incredible nature have definitively marked a path to go back to this region. During my weekends in Sarawak I escaped to do some hush run and caving exploration with a group of friends. I also walked around the city which is highly known by its beautiful landscaping, and I got lost in the history museum trying to understand better the development process of that region which stayed under the British Colony governance until 1963, when the country became part of Malaysia. The 1.7 million population of Sarawak is composed of 27 different ethnic groups, of which the major ones are the Malay, Iban, Bidayuh, Melanau, Orang Ulu and the Chinese. The Malay and Melanau (Malays) constitute the so called Muslim-natives, whereas the other groups are classified as non-Muslim natives. The Iban and Bidayuh together with other native groups are referred to as the “Dayaks”. For my research I had the chance to work with Iban longhouse communities. During these two weeks I carried out several meetings with local NGOs and a couple of interviews and group meetings and discussions with representatives of the communities Selezu, Setulai and Sepadok, all of which are located in the Bintulu District, northern Sarawak. More than 50 representatives of these communities stayed in Kuching for 10 days to attend a court case they initiated against a palm oil plantation that infringed their ‘customary right land’ 10 years ago. This is one of the 210 court cases of this type in Sarawak and only one of the 10 successful ones that has being able to start trial. Although native customary land is recognized under the Land Code, it is considered ‘under-utilized and idle’ land by the State Government which can declare it State land and then lease it to private companies to be developed, generally into a palm oil plantation. This process is generally carried without a proper consultation process and consensus agreement with the communities and numerous times these development strategies end up in land conflicts and cause negative externalities that are borne by the affected native communities and the local environment. During a focus group discussion with a group of men representatives of longhouse communities of Selezu, Setulai and Sepadok

WEEK 4: The View from the Palm oil Industry

Palm oil industry plays an important role in Malaysia’s economy. In terms of resource potential, palm oil plantations have grown from less than 1 million ha in the 1970s to around 4 million hectares in 2005. In 2006 Malaysia produced about 15 million tonnes of crude palm oil and the country set the target to expand its production to 19.6 million tonnes by 2010. Although land availability for palm oil expansion in West Malaysia is limited, palm oil plantations can still expand in the States of Sarawak and Sabah. Malaysia plans to fulfill its plan of increasing palm oil production by 1) increasing productivity and 2) expanding plantations in East Malaysia and outside the country borders in neighboring countries such as Indonesia. The fourth week in Malaysia I spent my time in the State of Sabah working in a palm oil company. I spent the week working in the office, doing interviews to people in the palm oil sector and WWF (which among others started the Round Table for Sustainable Palm Oil Production) and visiting palm oil plantations and an oil mill in Lahad Datu, where a large Palm Oil Industry Cluster (POIC) is currently under development. The experience allowed me to gain another perspective on the issues I was researching and I was able to explore possible solutions or improvements that could be introduced to ensure that biodiesel development contributes to the achievement of MDGs in producer developing countries such as Malaysia. There are a few things that could be implemented, but the ones I picked up to explore further are: what gaps are there where palm oil companies can still improve and reduce their impact on the local environment (MDG 7 environmental sustainability), what process could be implemented to consult native communities and reach better agreements respecting their customary rights and by doing so preventing social disruption, what is the potential of using solid waste and effluent of palm oil plantations and mills to produce electricity that could be sold to the grid or provided to rural communities (this has been already well studied but not yet broadly put into practice) and how the revenues of such projects under the CDM could serve as an economic support mechanism to implement further sustainability criteria. Finally, the last strategy explored is how to facilitate biodiesel economic viability so that it can be used in rural areas as a cheaper fuel to generate electricity, thus enhancing productive factors in the rural area and contributing to poverty alleviation (MDG 1). All of these ideas have been explored in the recommendations of the study as a basis for further research. Of course I could not leave Sabah without looking a bit of the Heart of Borneo. Since I spent almost the entire week in Kota Kinabalu (the capital) I went to Mount Kinabalu and to the Islands that are not so far to reach on boat from the city. From mountain high to ocean deep I enjoyed the treasures of Sabah. Wonderful coral reefs, unimaginable fauna and flora and beautiful landscapes captured my view and mind for hours. Having said so, I have to mention that Sabah also allowed me to get lost in an endless horizon disposed by a real sea of palm trees…