Sabah’s estate lockdown impacts 18 listed planters


TEMPORARY closure of oil palm plantations in six districts in Sabah, following the rapid spread of Covid-19 among the state’s residents, is affecting about 18 of the Bursa Malaysia-listed palm oil producers.

The Movement Control Order (MCO) has impacted firms with oil palm cultivation districts such as Tawau, Lahad Datu, Kinabatangan, Kalabakan, Semporna and Kunak.

Among the firms that have been operating in the six districts are TH Plantations Bhd, Sime Darby Plantation Bhd (SDP), FGV Holdings Bhd, Genting Plantations Bhd, IOI Corp Bhd and Hap Seng Plantations Holdings Bhd.

The six districts consist of 65% of Sabah’s 1.2 million ha plot of land planted with oil palm and contribute 75% of the state’s total production. Sabah is at present the country’s largest palm oil-producing state.

Malaysia, the world’s second-largest producer of palm oil, has been under the MCO since March 18, forcing businesses to halt operations for the time being and thus scaling down essential services, including the plantation industry.

Despite exemption to certain sectors like agriculture, the Sabah government has tightened its MCO in several major towns due to the spike in new Covid-19 cases.

As of yesterday, three positive cases were reported in Sabah, bringing the state’s registered accumulated cases to 209 (at press time).

As some of the infected patients were identified as plantation workers, the state government had ordered certain plantations and factories in three districts to temporarily cease their operations until March 31.

The workers were found to be linked to the religious gathering at Sri Petaling mosque in Kuala Lumpur.

On Monday, the state announced that the order has been extended to April 14 and is widened to a total of six districts.

Responding to the order extension, the Malaysian Palm Oil Association and Malaysian Estate Owners’ Association (MEOA) said the three-week closure would cost RM860 million in revenue loss for the firms.

Although the extension is aimed at reducing the virus spread among plantation workers, MEOA president Jeffrey Ong said the closure could also force the plantation employees, particularly the foreign workers, to seek other jobs which in turn compromise the action to control the virus spread.

“With the current situation, plantation companies are pressured to pay their workers with no income. So, the extension is feared will cause a ‘mini migration’ among the guest workers as their wages are likely to be affected by the closure. “The workers will likely seek other jobs at nearby plantations, or any jobs that they could find, and that will increase the risk of infection for other Sabah residents,” he told The Malaysian Reserve.

The closure is currently estimated to affect employments of about 100,000 plantation workers in the districts.

Ong added that all plantations in Sabah, including in other districts, are being monitored to restrict the movement of people entering and leaving the plantations.

In a statement yesterday, SDP, one of the firms who operate in the six districts, said the containment initiative by the state government needs to consider the implication to the affected companies.

“SDP believes the initiative on containment needs to be balanced out with considerations so as to not jeopardise industries recognised by the National Security Council (NSC) as essential to avoid potential adverse and severe implications arising from the decision.

“This is in line with NSC’s move to allow palm oil companies to continue limited parts of its operations deemed essential by strictly adhering to the conditions and operational guidelines as specified by the council,” it said.

The plantation giant stated that it has been working with the authorities and made adjustments to operations at its estates and mills to be in strict compliance with the conditions and guidelines.