Immediate measures needed to address labour shortage in Sabah's palm oil industry, says Warisan

KOTA KINABALU: Parti Warisan deputy president Datuk Darell Leiking has called on the Sabah government to address the labour shortages in the palm oil industry immediately. He also recommended reducing the state sales tax of 7.5% on palm oil, as it is creating financial difficulties for smallholders who are unable to maximize their profits. Leiking emphasized the need for the state government to manage the palm oil industry effectively to ensure direct benefits for Sabahans. He highlighted that labour issues in the industry are covered by the Roundtable on Sustainable Palm Oil (RSPO) guidelines and urged the state government to facilitate workers’ documentation.

Leiking additionally proposed the establishment of a separate database to track revenue from Crude Palm Oil (CPO) and other palm oil derivatives contributed by palm oil-producing districts. He asserted that these districts should receive infrastructure upgrades and funds for development corresponding to their contribution, with a minimum return of 40% of revenue. Until the state achieves its food self-sufficiency level (SSL) target and completes the restructuring of the palm oil industry, Leiking argued that Sabah should prioritize the welfare of its people by banning all types of cooking oil exports. Furthermore, he stressed the importance of intensifying monitoring at the border to prevent smuggling to neighboring countries.

Warisan’s Tunku assemblyman Assaffal Alian expressed concerns that the current labour shortages faced by Sabah’s palm oil smallholders would impact the supply of subsidised cooking oil in the market. Alian urged the state government to prepare for the potential mass return of Indonesian workers to their home country and the possible occurrence of the El Nino phenomenon. He highlighted that a cooking oil shortage in Sabah last year led to a significant price increase, with the cost of one kilogram of subsidised cooking oil rising from RM2.70 to RM6 per packet.

Alian referred to the Department of Statistic Malaysia report on the State GDP 2022, which disclosed a 0.2% decline in the agriculture sector for Sabah, largely due to a contraction in the oil palm sub-sector. He further cited a report by the Malaysian Palm Oil Board (MPOB), revealing a 1.7% decrease in CPO production in Sabah from 2021 to 2022. Interestingly, CPO production in Peninsular Malaysia and Sarawak increased during the same period, leading to inquiries about the cause of Sabah’s decline. Despite having a similar location, Sabah experienced a different trend, prompting suspicions that insufficient manpower for palm oil fruit harvesting is contributing to the shortage of subsidised cooking oil.

Alian concluded that smallholders, unable to maximize their profits and burdened by the 7.5% sales tax, will be most affected by the labour shortage. He emphasized the importance of addressing this issue to ensure the availability of subsidised cooking oil for Sabahans.