On the Beat | By Wong Chun Wai

Sharing the palm oil boom

The prediction is that crude palm oil prices will continue to escalate from current record levels.  

Employee benefits: United Plantations poured money back into the working community by building these housing quarters in Jenderata.

Heavy foreign buying in Sime Darby and IOI Corp, two of the world’s largest oil palm planters – pushed the Kuala Lumpur Composite Index to 1,466.67 points.  

It is the best start for the year, as some 942 million shares changed hands. There is bright hope for a Chinese New Year rally ahead of the general election.  

Just consider this: in 2006, the price of crude palm oil was RM1,500 per tonne. Today it is past RM3,000 per tonne. In all likelihood, the price is going to be robust in view of the strong demand due to the ravenous appetite for edible oils from China and India.  

In short, oil palm plantations are rich and going to be so for sometime to come.  

The question is how they are using it to reward the little people who have contributed significantly to their bulging pockets – their workers.  

In an ideal world, it would be great if they could tear up the collective agreements signed when prices were lower, and draw new ones to take into account the spike in crude palm oil prices.  

But the fact is this is not going to happen because what could be a RM3,000 per tonne commodity today could drop to RM2,000 per tonne in 24 months. Companies will loath to tie themselves down with a bigger wage bill due to the cyclical nature of the business.  

Still there are other ways in which palm oil companies can share the good times with their workers and families. For a start, they could upgrade the housing in plantations, provide better medical facilities and adopt schools in the vicinity of their plantations.  

The point is that they have a duty and obligation to spread the wealth, especially to those who have toiled under the sun for years.  

It is interesting that when the issue of marginalised workers was raised recently, all fingers were pointed at the Government.  

Sure, while it is the responsibility of the Government to install the infrastructure, to nurture the economy and ensure there are sufficient opportunities for education and work, the private sector cannot take a hands-off approach – especially when record profits are being chalked up.  

To be fair, some plantation giants have already started moving in the right direction. Take Sime Darby Bhd for example. In December, it announced that it was going to build model townships of affordable housing for thousands of low- and middle-income earners in several states.  

Under the Bandar Gemilang programme, the diversified multinational plans to turn slivers of its vast tracts of plantation land in Negri Sembilan, Kedah, Selangor, Malacca and Johor into townships with a mix of apartments, link houses, semi-detached houses, libraries, schools, sports fields, police stations and places of worship for the major religions.  

In addition, 30% of the land area in each of the townships will be dedicated to open spaces, parks and landscaped gardens.  

It is understood that the prices will be competitive, as the land is owned by Sime Darby. In all probability, some of the workers in Sime Darby’s plantations may well be able to afford the low-cost apartments in these developments.  

With a market capitalisation of more than RM70bil, Sime Darby has also started adopting Tamil schools in its estates as well as sponsoring rural schools in the northern states.  

United Plantations is another exemplary employer – its housing quarters for workers in Jenderata is one of the best around. The plantation group has also poured money back into the working community by building a bakery and sporting facilities.  

The point is that there is no limit to the good that money from the palm oil boom can do.  

Just think about it. There are more than 500 Tamil schools in the country, and two-thirds of them are in rural areas. These schools need resources so that their students can enjoy better teaching facilities and even have the opportunity to attend tuition classes.  

Funds from plantation companies will be heaven-sent for these schools, as they will help their students break the cycle of poverty.  

Even Chinese language and national schools in rural areas can do with a lift.  

Last month, IOI Corp Bhd executive chairman Tan Sri Lee Shin Cheng announced that the company would build the second phase of SRK Ladang Harcroft in Selangor. TSH Resources Bhd, meanwhile, has an adoption scheme for 100 students in three Tawau schools.  

One of the more successful corporate social responsibility programmes is Pintar – a scheme where government-linked companies adopt schools in the back of beyond. 

The main aim of the programme, which stands for “Promoting Intelligence, Nurturing Talent and Advocating Responsibility,” is to assist children from low-income families so as to improve their academic performance. 

There is nothing stopping plantation companies from getting involved in the Pintar programme.  

Basically, the sky is the limit when it comes to doing your bit for Malaysians in these days of heady palm oil prices.