2009.10.17-TLSC 30th Meeting on 17th Oct

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30th Meeting of the Technical & Logistics Sub-Committee Meeting Room of MPOA-Sabah 17th October 2009 1

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1.0. To confirm the Minutes of the Twenty-Ninth Meeting held on 11th July 2009. 2.0. To discuss matters arising there-from. 3.0. To discuss recent development with regards to pollution and palm oil mill discharge into rivers arising from the:-   3.1. Study on Pollution Prevention and Water Quality Improvement for Sg. Kinabatangan by DOE appointed environment consultant, ereConsulting Group Sdn Bhd. Cotd- Agenda 2

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3.2. Study of Impact of Plantation and Milling Activities and Toxic Materials on Water Quality of Sg Segaliud, Sg Muanad, Sg Segama, Sg Pang Burong and Sg Kalumpang by EPD appointed environment consultant, Envsolve Sdn Bhd. 4.0. Engine Drivers - Intensive Courses on Steam Engine and Internal Combustion Engine. 5.0. To discuss any other business. 6.0. To decide date and venue of the 31st* Meeting of the Sub- Committee . * The Notice of Meeting wrongly stated the next meeting to be the 30th. 7.0. Adjournment. Agenda TLSC 30TH MEETING , SATURDAY 17TH OCTOBER 2009

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Agenda 2.0. To discuss matters arising there-from. 4

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5 Agenda 2.1.2. On Tracking the Movements of Palm Oil Products in Transit. Agenda 2.1.0. Security & Safety of Palm Oil Products in Transit 2.1.3. Proposed Briefing On Global Positioning System. Secretariat will write to service providers shortly. 2.1.4. Proposed Dialogue with the State Police Secretariat is waiting for a date from IPK Sabah.

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Agenda 2.2.0. Engine Drivers Boilermen 6 Agenda 2.2.2. On Engine Drivers’ Training Course - 2009: Venue : Meeting Room of MPOA-Sabah Fees Per Participant:- RM450.00 for member mills; RM500.00 for non-member mills. Trainers: Encik Mohamad Yusof, Felda Palm Industries Sdn Bhd. Date : 7th & 8th Oct for Steam Engine ; 9th & 10th Oct for Internal Combustion Engine.

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Agenda 2.2.0. Engine Drivers & Boilermen (Cotd) Agenda 2.2.3. On Engine Drivers’ Competency Tests by DOSH. Dates set by DOSH:- 12th, 13th & 14th October, and another in Mid December.

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9 Agenda 2.3.0. Recent Development On POME Issue. Agenda 2.3.1. Consultative Meeting On Study of Pollution Prevention & Water Quality Improvement For Sg Kinabatangan. Organized by Federal DOE in Putrajaya – Friday, 11th September. To discuss strategies and Interventions put forward by the Consultant, listed on the next page. MPOA was represented by Hj Halim Ahmad (FPISB); Syed Mahdhar Syed Husin (Sime Darby); Dr KPK Rama (MPOA) & Hj Awaludin (MPOA-Sabah)

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. Mandate requirements that a trained technician is registered and designated for the maintenance of pollution control systems for palm oil mills. Objective: To ensure sufficient level of expertise is available for the running and maintenance of effluent treatment systems at all mills.   Justification A major cause of poor effluent discharge quality is due to the lack of monitoring and maintenance of the effluent treatment systems. Pollution control systems are often not viewed as an integral part of the mill operations as such capacity in this area is often poor. Description The appointment of a trained technician (designated as the Pollution Control Officer or PCO) can be made as a mandatory license condition under the Written Approval. A mill operator could either (1) employ a full-time staff as the PCO, or (2) designate the responsibilities of the PCO to an existing staff member e.g. the Health, Safety and Environment (HSE) Officer. However, the PCO is expected to meet competency requirements, and at a minimum, be equipped with relevant technical certificates.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. (Cotd) The PCO’s major task would be to operate, monitor and maintain the palm oil mill effluent treatment system, as well as identify where operations are inadequate and improvements can be made. In addition to effluent treatment, the PCO would also be responsible for all other aspects of pollution control systems of the mill including air emissions (from boilers and incinerators), scheduled waste etc. The PCO would work also closely and oversee all liaisons with the DOE including the preparation and delivery of monitoring reports etc.   It is envisaged that as the expertise of the PCO expands, a better knowledge base of pollution control systems will be built within the industry. The PCO will also play an important role as the focal point when new expertise would need to be developed to operate advanced treatment systems   Plan of Action   DOE to establish a technical committee comprising of relevant agencies (as well as representatives of stakeholders i.e. MPOB, MPOA, MPOC etc.) to finalize the responsibilities, scope of work and competency requirements of the Pollution Control Officer. These requirements can then be incorporated as an additional condition of the Written Approval.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. (Cotd) MPOA’s RESPONSE (Industry) agreed in principle. The philosophy is correct but to put in another intervention to mandate the requirement of a trained technician is not necessary. It will only become an additional burden to the industry. Mills are already engaging engineers and mill managers, people with expertise knowledge and technical knowhow, – a requirement set by the law even before a license to build and operate a mil is approved. Their responsibilities include effluent treatment which is one of the regulations that mills must carry out to comply with the law. There may be one or two black-sheep who defy the law; so it is the duty of the DOE who visits them once every quarterly to revoke their license and drag them to court. Again, the image of the industry must not be smeared just because of the wrongdoing of these few black-sheep. – Syed Mahdhar.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. (Cotd) MPOA’s RESPONSE RSPO is a good start but we also need to know that RSPO is voluntary and is a trade related issue. We should also know the Government should not get involved because it is basically a B to B issue. On top of that many in the industry are beginning to get extremely discontented and ‘fed up’ with RSPO. The industry has spent more than RM100mil to produce sustainable palm oil but today the premium promised by the European Union is zero. Not only that, they are also hammering the industry with new criteria like carbon stock, peat-lands, deforestation, green house gas which were never in the original P&C. The industry feels the Government should not intervene in making the proposal to mandate any company – big or small - to comply with the RSPO by 2010. We should not be too dependent on (guided / dictated by?) the RSPO which basically satisfies only the demands of the European communities. Instead, the Malaysian Govt should formulate its own sustainability standards. For Kinabatangan, the PMM Report for replanting, for example, can be enforced as a Sabah formula.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. (Cotd) MPOA’s RESPONSE RSPO had a noble intention in the beginning recently became a non-tariff barrier to the NGOs in the West. They use the RSPO to pressure the industry and add elements like LCA to make it more difficult for the industry to achieve. In Sabah, for example, land title is an issue, which if not resolved, will be an obstacle to RSPO certification. When RSPO compliance is made mandatory, it will pose a problem to the industry. The intervention must be taken out. The oil palm industry always appears to be the culprit of virtually everything that goes wrong in terms of environment; and a lot of cases of references is made to the Kinabatangan area. The media highlights this together with the pressure that is being applied by the International NGOs. But looking at the data, the information provided by Dr Bala, non-point sources is as important as point sources (?). One quarter of area is planted with oil palm while approximately half of the remaining 75% under forest comprises cultivated or managed forests. The siltation, it appears also comes, in large part, from the forest activities. But this does not come out in international scene.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.2.1. (Cotd) MPOA’s RESPONSE Most of the time, it is the oil palm industry that is highlighted. Although the concern seems to be confined to only Sabah at the moment, in the international context, the whole palm oil industry in the country is affected. The industry faces a lot of pressure at the international level because many cases are being channeled through RSPO, very often through international NGO action. Looking back at the data, the oil palm industry is not alone to blame, that there are also other sectors, notably the timber industry. The oil palm industry has a very long and proud tradition of self regulation and it is responding. But it should not be seen to be or made up to be a culprit all the time. However, the extensive coverage made by the local media depicts a scenario that gives an adverse image of the industry. This is what the international NGOs look for.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.3.5. Implement requirement for sediment holding ponds within the drainage network of all plantations. Improve agricultural practices in plantations. Objective  Reduce the transport of suspended sediments load to the watercourses.   Justification  Suspended solids for agricultural activities remain of a key water pollution issue within the basin. The construction of holding ponds may be a first step to mitigate these loads from reaching the rivers.   Description All plantations should be required to construct and maintain surface runoff holding / retention ponds as a means to reduce non-point source pollution from the land.  The size and density of the holding ponds shall depend on the size and the topography of the plantation. The DID’s MASMA provide guidelines for the design criteria of such ponds.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTIONS 1.3.5. (Cotd) Perhaps sedimentation ponds are necessary during the development stage when there is soil disturbance. But for mature plantations, it should be sufficient to have planting and conservation terraces. For hilly areas, scupper drains and silt pits would be necessary. INTERVENTION 1.4.1. Restore and rehabilitate encroached riparian areas along tributaries Sg. Karamuak, Sg. Lokan, Sg. Pinangah and Sg. Tenegang Besar - Restore and rehabilitate riparian areas under encroachment by oil palm cultivation. Objective  Re-establish functional riparian vegetation along major river stretches.   Justification  Riparian vegetation sustains many functions including the mitigation of non-point sources of pollution. However, many river stretches have been encroached by oil palm cultivation where natural vegetation is either completely absent or severely degraded.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.4.1. (Cotd) Plan of Action Encroachment by oil palm cultivation can be grouped under two categories: (1) plantings on land outside of the lot boundaries which extend to the river reserves1, and (2) plantings on land within the lot boundaries but which take place on river reserves. The first category is subject to infringement of the Sabah Land Ordinance 1968 which is enforced by LSD. The second category is subject to infringement of the Sabah Water Resources Enactment, 1998 is enforced by DID.   In both situations sufficient discourse with the oil palm growers is required to identify best course of action. For example, oil palm growers can be requested to voluntary set-back planting areas with respect to lot boundaries/river reserve and rehabilitate the affected areas (e.g. through replanting programmes etc.) either independently or by financing local community initiatives. However, if this fails then growers can be prosecuted under the respective laws and fines imposed to be used to fund rehabilitation activities. MPOB & EPD should be the lead agencies.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 1.4.1. (Cotd) MPOA’s RESPONSE   in response to statement from the PermSect, Tourism, Culture and Environ Ministry, Sabah.   MPOA does not know to what extent or to what percentage of the 1.4mil hectares of the oil palm area in the State that encroach into the riparian (or for that matter, beyond the specified boundaries) but from statements (made by authorities) as well as media reports, they look very serious. MPOA appeals to the respective authorities, locate these hardcore who flout the law and punish them but refrain in making statements that tarnish the image of the industry in general.   Punish those who flout the law and not the industry in general.

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INTERVENTIONS THAT RELATE TO OIL PALM & PALM OIL INDUSTRY INTERVENTION 5.1.2. Establish the stakeholder coalition of 'Friends of the Kinabatangan‘ - Establish framework for river basin planning and management. Objective  Develop a formal mechanism for stakeholder engagement (bottom-up approach) to implement, monitor and assess plans and programmes for the Sg. Kinabatangan Basin.   Justification  There are multiple activities in the Sg. Kinabatangan Basin that impact upon water quality and river health. The engagement and support of the stakeholders is therefore a critical component to ensure that plans and programmes are successfully implemented. Description The coalition is a state-led initiative with membership consisting of institutions, organizations or individuals who are interested in the well-being of the river basin; the chair would be rotated amongst these members. The establishment of the coalition would be state-funded however the coalition would have the opportunity to raise funds to support its activities.

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05/10/2009 STRATEGIES & INTERVENTIONS (Cotd) INTERVENTION 5.1.2. (Cotd) The main functions of the coalition are as follows:   Ensure that the interest of all stakeholders are adequately represented; Develop consensus on issues and actions to be taken; Support the implementation of plans and programmes for the river basin; Monitor and provide assessments of activities implemented; Ensure the dissemination of relevant information among members (between government agencies and NGOs, private companies etc.); Create better awareness and mutual understanding. The members of the coalition could consist of the following:  Associations (i.e. MPOA, EMPA, RSPO etc.) Community organisation (i.e. Mescot, KiTA etc.) Logging concessionaires (i.e. Yayasan Sabah etc.) Non-governmental organizations (i.e. WWF, PACOS, etc.) Oil palm companies (IOI, Asiatic, Borneo Samudera etc.) Tourism operators Government agencies (i.e. MTCE, EPD, DOE, SFD, DOA, DID, MPOB, local authorities etc.).

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05/10/2009 STRATEGIES & INTERVENTIONS (Cotd) INTERVENTION 5.1.2. Plan of Action   MTCE to form a pro-tem committee consisting of 2-3 major stakeholders to outline details of the scope, function and membership of the coalition. A kick-off meeting to be organised where the outline will be tabled, discussed and approved; the chair will be elected.

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Agenda 2.2.2. Engine Drivers Intensive Course. Steam Engine - 7th and 8th October. Internal Combustion Engine - 9th and 10th October. Venue:- Meeting Room of MPOA Sabah Branch Office. Fees:- RM450 per person from MPOA member mills. RM500 per person from Non MPOA member mills. Date:- Agenda 2.0. To Discuss Matters Arising There-from. 05/10/2009