ESG issues high on Felda’s priority list

Director-general Datuk Amiruddin Abdul Satar (pic) said among the steps that are to be taken is to get settlers used to the Roundtable on Sustainable Palm Oil (RSPO) standards to add to their adherence to the standards set under the Malaysian Sustainable Palm Oil (MSPO) standard. The RSPO is seen as a stricter standard than the MSPO.

KUALA LUMPUR: The Federal Land Development Authority (Felda) is taking steps to address the environmental, social and governance (ESG) issues within the group by forming a sustainability committee and learning from its subsidiary, FGV Holdings Bhd, on its knowledge and experience on the issue.

Director-general Datuk Amiruddin Abdul Satar (pic) said among the steps that are to be taken is to get settlers used to the Roundtable on Sustainable Palm Oil (RSPO) standards to add to their adherence to the standards set under the Malaysian Sustainable Palm Oil (MSPO) standard. The RSPO is seen as a stricter standard than the MSPO.

“We are to have a sustainability unit with a new director,” he said during a media briefing yesterday.

Apart from learning to deal with the ESG requirements that are important for plantation companies, Amiruddin said that labour issues were not a major issue for Felda compared with other plantation companies.

“We don’t 100% rely on foreign labour,” he added.

According to Felda, its settlers were currently reaping the benefit of high crude palm oil (CPO) prices with higher incomes being earned from the commodity’s record prices in the international market.

It also said Felda settlers on average could earn around RM12,000 a month, given where the prices are should they run their estates well.

Top settlers in Sabah and Sarawak are said to be earning between RM14,000 and RM15,000 a month.

The minimum income settlers’ earn is said to be about RM6,000 a month from the current high prices of CPO.

The top earning settler is in Perak, who earns over RM20,000 a month.

Meanwhile, Felda chairman Datuk Seri Idris Jusoh said claims of settlers not benefitting from the high price of CPO would likely be those who had sold or mortgaged their estates.

He said one of the benefits of taking over FGV was better control and negotiations over the palm oil mills that were in the domain of FGV.

“Felda without FGV did not have control of the mills,” he pointed out.

Felda is better able to control the oil extraction rate with the control over the mills.

Idris said one of the main strengths of Felda has been its low cost of production, given the role settlers play in harvesting the crop.

“We have no issue on the lack of labour,” he said.

Felda has an 82% stake in FGV and on continuing on its offer to privatise the listed company, Amiruddin said it was Felda’s intention to take FGV private.

“We will make an announcement at the right time,” he said when asked on the next step to be taken on privatising FGV.