Developing NCR Land – private approach

18 Responses to “Developing NCR Land – private approach”

1. Iban Abroad on July 23rd, 2009 9:59 am

   GTJ,

   Thanks for your open talk and discussion regarding your investment on Dayak NCR Land. Any genuine and honest development in Dayak land is most welcome, especially in term of Win-Win situation.

   Can BN in Sarawak follow this step? And do not hidding something.

2. Engkeruak Tau Tepang on July 23rd, 2009 10:42 am

   Some plantation ventures simply not going for the OP but for the rich timber resources in the area. OP or logging (sapu block) can lead to destruction of environment and affect the likelihood of the rurals. The rivers become polluted, poisonous, and in some cases the only water source destroyed. Wild animals, fish become scarce. When the rurals do not have water source and their only sources were destroyed, it is up to the plantation to supply clean water by all means viable/available to quench the rurals’ thirst. If the oil from OP can be converted into water, they may do so or else they have to sell the oil and buy bottled water and sent to the affected villages. Many people have ‘kena tepang’ to earn money by OP at the xpense of the local water supply for the affected villages. Never mind, there are lots of water from the sky. Entahlah, maya kemarau nadai ga ujan nya laboh lalu nyawa pen tinggal ikak lelanggak ga alu ka nyerauh agai sida YB kitai ngasoh sida nyaukka sida ke tasah neh.

3. Empelesik Sungai on July 23rd, 2009 11:14 am

   We are a plantation company based in Peninsular Malaysia, and are interested to expand into Sarawk NCR lands. blah…blah…blah… Devt Concept (a pre-requisite for SD to come in as an investor), although the required agreements have been inked between LCDA (as Trustee) and the natives (or at least, as agreed by the representative of each longhouse).

   {My comment: Without going into the details, there is one plantation near my village that have been operating for 12 years. So far there have not been any dividends paid. The last was just 2 years ago, and that was “advance against dividend.” The reason was that the JV did not make money. That “advance” was paid as the result of the locals blocking the access road to the plantation and then made a police report.

   There is no such thing as “Natives objected” to the development of the land. A casual examination to the above left many questions unanswered. When CPO sty-rocketed to RM4,600 a ton, there must be some forms of dividends. If the said dividend is ploughed back into land development, where is the land? Whose land? In this scenario we did not see any new land.

   LCDA as trustee is the issue here. They are trustee by us to take care of our interest and not only act when we complained. We do not want to claim what is not ours – it is a matter of justice.}

   What are the major issues that the natives fear? Do they understand and accept that in a greenfield development that would take many years to fully implement, blah..blah..blah.. 3+ years to recover the original investment cost (of $12,000 per hectare). From year 9 or 10 onwards, the planting is in a comfortable position to start paying dividends (that is, if all goes well…..if cpo prices remain good etc).

   {My comment: I am a 100% native sir and I know maturity of palm takes 3 years, even then the first harvest may not produce quality extraction, maybe 15% or 16%. If the plantation needs to recoup its capital, that is very much acceptable. But after the 9th year, there must be a steady flow of income to the NCR land owners, especially when CPO was as per 2007, 2008.

   One hectare (2.47 acres), can produce around 5 tonnes of FFB a month (assuming 1 acre=1 tonx2 harvest a month). With in 1 year, 1 hectare at its prime (6-12 year tree), can produce something like 60 ton of FFB. You correct me if I am wrong, sir. The market value of 1 ton FFB is around RM300? I think by now you realise we longhouse people do use calculator (he..he..he). I think I leave this as it is. We do calculate and we are short-changed.}

   The above describes a typical planting cycle of OP. In a 20,000 ha development, each year will see new areas planted, essentially commiting the JVC to new $12,000 per ha investments. Whatever profits produced by earlier planting will substantially (if not fully) be used up by this new planting. Note that at a cost of $12,000 per hectare, proceeds from land sale ($1,200 per ha) is only enough to develop 10% of the native lands under the JVC.

   Is it possible to meet for further discussion when I am next in Sarawak?

   {My other comments: Other grouses/complaints
   (1) no parameter survey done. How do I know the boundaries 3 years from now? What about my children, would they know the boundaries. Today the boundaries are the trees left there.
   (2) Agreement in a language that we do not understand. Can it be drafted or explained by the lawyers who know our language?
   (3) Rights to inspect/ask: It is our suspicion that our JV partners procure seedlings, fertilizers, contractors, equipments from the parent company at inflated prices – we want to know too. A proper audit must be in place. Let our longhouse people chose their representatives to be in the audit committee.
   (4) Intruding into neighbouring lands. Destruction of fruit, rubber trees in neighbouring land.
   (5) Hiring of Indonesians instead of the locals.
   (6) Contractors are from outside.
   (7) The rights to call for a discussion.

   If you look at all the complaints, they are very simple to solve. The Dayaks are simple people, sir. My only fear is that once you are fair to us, we would be too nice that we would feed you with local rice wine, and slaughter pigs for you (fats). But when we are angry, they can take the parang. But rest assure sir, it takes a lot really to make the Dayaks angry.

   Good luck to you and may all good men like you prosper. Amen.

4. Engkeruak Tau Tepang on July 23rd, 2009 11:18 am

   West Malaysian companies maybe cheated by the people who live near the land introduced to them. These introducers will gather some signatures of their friends who live outside the lands and claimed that they are the signatures of the landowners. So, this looks so real and the real landowners were caught by surprise at the scam. This had happened in the Julau area before.

5. Seliong ak Wau on July 23rd, 2009 11:25 am

   Mr Gan,

   CORPORATE GOVERNANCE – ending the impasse on NCR JV

   Background
   Before the mid 90’s the word “corporate governance” was non-existence. Malaysia has adequate laws with numerous supervisory bodies and enforcements. But the aftermath of 1997 Asian Financial Crisis saw the emergence of new set of public accountability in the corporate world. As a trading nation, Malaysia saw the significance of corporate accountability and thus towards the end of the 90’s era, “corporate governance” was emphasise as much as it was expected.

   Definition
   What is corporate governance? In the US, the Sarbanes-Oxley Act of 2002 came after the Enron Fiasco. Enron, the 5th largest energy giant in the US was a big supporter of George W Bush re-election campaign. The company was reported to have generated hefty profits and was justified by the generous salaries and bonuses. In the year 2000, Enron was declared insolvent – bankrupt. Top personnel of Enron were charged. The international Public Auditing firm Arthur Anderson were charged and barred from practicing. Minority shareholders took legal actions against many parties. This led to the senate passing the Sarbanes-Oxley Act in 2002.

   Corporate governance has many facets that revolve around ethics. To measure corporate governance per se is impossible, but the several facets could easily be recognized. It involves honesty, fairness, transparency, confidentiality, accountability and good faith. In the equity market, the issues are always related to market manipulations – like riggings and insider trading. The shareholders who do not manage the company are often defrauded.

   CG in Malaysia
   Is corporate governance something new? In the 80’s the investment community was inundated with the word “cheating” when referring to a few companies. Many could remember Carrian Group and the subsequent murder of a special BMF auditor in the early 83. That word however changed to CBT (criminal breach of trust). In the 90’s there were so many cases that were classified as CBT. Beside the corporate, public servants were also charged with CBT. Anything could be CBT until it became a feared word.

   CBT was as effective as our/authority’s will to prosecute. Many cases were left with NFA (no further action). Crimes were coated with new modus operandi. The famous statement – “don’t break the law, but who says we can’t bend it a bit?” It could also as Warren Buffett said, “Everybody else is doing it.” Pan El, Multi Purpose Holdings are two names that result in heavy financial losses to people. Even Singapore PM Lee Kuan Yew gave a warning to corporate leaders in Singapore with the famous words immortalized by Phua Chu Kang, “Don’t play, play.”

   The word CBT could probably lost its novelty – it reappears in what we know today, corporate governance.

   CG and NCR JV
   With so much background on corporate governance, how much of it can we apply to the NCR JV? How much of honesty, fairness, transparency, confidentiality, accountability and good faith can be invoked into the NCR JV?

   The scenario now makes that question irrelevant. It is not “how much?” It is not demanded, but it is part and parcel of any corporation that has the involvement of the public as shareholders.

   The common grouses in NCR JV are:
   1. Was there are fraud involved?
   2. Is there any secret profits made?
   3. Were there any “related party transactions” in the company’s dealings?
   4. Was the minority shareholders (NCR land owners) properly represented?

   These are the 4 common questions asked whenever corporate governance is mentioned in the equity market. Other questions may include:
   5. Board composition; who represent the NCR land owners? Who are the independent directors?
   6. Where are the disparities between projected account and audited account?
   7. Who are in the audit committee? Since the JV partners are listed companies, there is a right to have audit committee.
   8. Failure of disclosure of directors’ remuneration.
   9. Inter-company borrowings, if any.
   10. Lack of other disclosures.

   Looking at the 10 questions above, has there been any satisfactory answer to anyone of them? Issuing denials as statements of defense can only add fuel to speculations. This has distanced the people with the NCR JV projects. It has created suspicion and hatred. The short cut answer to this is to apply fully the requirement of corporate governance.

   At this juncture, it is useless to ask if all JVs were done in good faith. It is useless to ask if there were elements of honesty, fairness, transparency and accountability involved. But each of these facets of corporate governance could easy be answered by the 10 questions above. The longhouse folks cannot and should not be taken for granted anymore. They have their rights.

   In conclusion, let corporate governance be seen by all NCR JV participants as a tool to forge better understand and working relationship. Failure to implement fully the concept of corporate governance could lead to disastrous future JVs. Failure to implement corporate governance would today be seen as a deliberate attempt of the majority taking advantage of the minority shareholders. It will no longer be a NCR JV issue.

6. Iban Militant on July 23rd, 2009 3:20 pm

   Seliong ak Wau,
   I am glad you are back in this blog with your much sought after contribution.

7. Engkeruak Tau Tepang on July 23rd, 2009 3:35 pm

   Laban ke lama iya amat udah belelang, tentu mayuh amat ga anak penemu udah digumpul unggal Iong alu dikunsi enggau kitai ditu neh! Dini enda nyau panjai utai ke ditulis iya ditu, nyau sebening pala aku tu baka ke udah ngirup chap Apek segelas jamah tujah penemu ke nyeligi langit nya.

8. Akiq Hawong on July 23rd, 2009 4:20 pm

   ETT
   Nuan addict blog tu nadai ngachau. Anang aja nuan addict dadah tauka gum oi taie chapi.

9. Dyaks on July 23rd, 2009 4:35 pm

   “In my opinion as an investor, it is frightening that Malaysiakini reports that there are many disgruntled natives over the recent Sime Darby-led JVC to develop 20,000 ha in Sarikei.” – Gan Tee Jin

   Frightening eh, Gan Tee Jin?? Hahaha, sorry.

   Wait ’til you know the real goons behind Sarawak’s main authority on everything oil palm business: LCDA and SALCRA. So shall we?

   LCDA – Let’s Chase Dayak Away
   SALCRA – Such A Low, Crappy Returns Annually

   Right, when you have been cleared two of biggest hurdles for any plantation projects in Sarawak, namely the Dayak landowners can be easily chased away, duped, cheated, abused of their own land rights and

   ownership plus the cost to acquire vast area of lands at relatively amost ZERO COST, you can start business anytime. When you can get such a CHEAP LAND and assistance from CROOKS, what else you need to

   scared? The initial cost of operation, land clearings, labour supply? Why worry if you can simply abide by the rules and terms set by the CROOKS that is open practice of CRONISM from appointing crony contractors

   to build the facilities, crony fertiliser seedling suppliers, crony Indon worker supplier agency, crony CPO mill factory operator, crony transporation company for CPO container, all of your profits virtually an ORGANISED

   MONEY LAUNDERING. So the business model must be on SALCRA basis that is low crappy returns to the landowners while the big fat lion share goes to the CRONIES. That is how oil palm business being run here,

   so bring the moneybags as you wish. This is a plantation casino where your odds on playing Russian roulette can be rest assured if you follow all the cronies’ instruction.

   Ok what else you need to know…ah, land titles. Don’t worry if some Dayak minister claimed that Dayak landowners can finally get to know exactly the land size affected by the plantation project because that’s all the

   Dayak minister can do: pacify the Dayaks from the truth of the real evil plans. Here, delay tactics works at the best manner so the Dayaks will keep on waiting and delaying or at least all of your cronies can CASH

   OUT most of the swindled profits from cooked-up plantation accounts first leaving the low, crappy returns for the Dayak landowners to scramble with. Got it? All the big fat profits for the cronies first, not the Dayak

   landowners. Even some of them being appointed as director not much they can do really except enjoying the aircon in the meeting room, provided that keep any calculators or English-BM dictionaries away at all time.

   Never duplicate the agreement and all must be written in complex English.

   So there you have it. Simple and not frightening at all. You just keep feeding the cronies free money while the Dayaks can be taken care off by their own Yes-Men Dayak leaders (that act as both guardian and swindler)

   so all the faults deemed to be by the ignorant unsuspecting Dayak landowners from the greedy Dayak leaders. LCDA and SALCRA just keept the tab moving. This is all pure gangland style business. You prey on your

   own neighbourhood. While we understand there aren’t enough cheap and easy land-grab left in Malaya except being far worse held by Umno goons, Sarawak would be your best option. Like the grass is greener on

   other side, way much safer and better than doing it in Indonesia forests where your profit margins would be recoup back just as long to repay carbon credit from planting oil palm over deforestation (around 150 years to

   repay the CO2 being made from forest clearing to plowing lands activities plus the capital recoup). Yes, in Indonesia the corruption is much worse so around 150 years maybe needed for your money to recoup while

   here just below 20 years depending how good you manage the cronism-propaganda-cheating cycle. Or you can leave it to the Dayak leaders to spin the propaganda while all the money siphoned out undetected.

   Just to recap:
   1. LCDA and SALCRA acronyms as your basic holy bible mantra: Always cheat the Dayaks.
   2. Run it as purely on CRONISM basis from crony contractors to crony suppliers, and you’ll be safe.
   3. It’s an ORGANISED MONEY LAUNDERING, from left to right pocket swindle.
   4. Keep calculators and English-BM dictionary away from the Dayak landowners. Keep them in the dark basically on any agreements.
   5. Never install any internet lines there away from the Dayak landwoners too. Too much enlightening will spoil your trick!

   Got it? It’s simple and direct business model. The only question now is: just show your money to the Yang Dikasihi!

   p/s – Over to you, Sheikh Seliong ak Wau!

10. Engkeruak Tau Tepang on July 23rd, 2009 10:08 pm

    Pama amat meh akiq hawong nya neh. Nemu nyaru pia, ngelenyeka uchu hawong!

11. Uchu Hawong@Raong on July 23rd, 2009 10:17 pm

    Anang ka alah uti sida kompeni ke buruk tulang ngaga sawit ngandarka rayat ke bempu menua ngerandang temuda diri empu. Kada ke agi biak baka uchu Hawong tu, ansak meh nembiak dayak ke biak mupuk nanam sawit kadiri empu, enda iboh ngasoh kompeni. Adai jalai ulih bulih mayuh untung enti nyau dipedua enggau sida kompeni.

12. Meramat Tajak on July 24th, 2009 12:38 am

    Open Letter to Gan Tee Jin and any other socially responsible Oil Palm Plantation company in West Malaysia or elsewhere, seeking to develop NCR land WITH native owner.

    Dear Gan Tee Jin,

    Of course if the news appear in Malaysiakini, it tend to carry truths that the BN government often prefer to keep from the public.

    Its commendable that on reading the news, you choose to find out more about the real situation in Sarawak. I hope you find the honest reaction from Dayakbaru readers useful for your corporate business planning. Allow me to add a few more personal insights.

    First,if you choose to establish your venture through Konsep Baru, you will be a party to the systematic land grab by the state against the interest of the poor Dayak natives. The Sarawak BN state government had erected a lot of amendments to the land code since 1984; one such amendment deny the right of the NCR land owner to obtain land title to his traditional parcel,recognised within the Native Court and many had predate the formation of Malaysia itself.
    LCDA steamroll acquisition of NCR land through dubious means–mostly without an actual signature of consent from each and every legitimate owner of NCR land in the government designated gross acreage for OP.In the Julau case, you must have noted LCDA claim all 101 longhouse had agree, even when not a single individual NCR land owner has signed up to the proposed JV. More importantly, of 101 longhouses, 60 had refused to allow their NCR land to be used, and I believe Sime Darby would be well advise to reexamine their business plan before committing more resource to the Julau JV.

    Second, if you choose to plough ahead — secured in the knowledge that the politicians in the State government will provide you with political cover, and will suppress any objection to your venture using the usual tricks or even with the full oppressive instrument of the State goverment (including the police field force) as has often happen, then by all means. Indeed, there is not a thing that the mostly poor, illiterate Dayaks, or even the NGOs,and much less the Dayak politician themselves, can do. Some of the Dayaks may end up dying, or going to jail – for defending their ancestral NCR land, but as a corporate entity, it may not be in your mission to conduct business with a social conscience. If that describe your company, it matters not if you are a large corporate giant like Sime Darby, or a very small company : I would not welcome you – and neither would – majority of Dayak community who is aware of the scam in the BN government NCR land Konsep Baru scheme.

    If as you said at the outset, that you are interested to conduct your business, in the most responsible way, then I imagine, you may want to pursue the following alternative approach, as outline below:-

    1. Set up an OP mill in an area with OP potential
    2. Provide nursery, tech advise and soft loans
    3. Carve out the area with basic roads for OP act
    4. Design an OP planting scheme with NCR land
    5. Assist with surveying techniques and tools
    6. Lease some parcels of land directly from owner
    7. Farm-out the OP cultivation to land owners
    8. Seek ltd monopoly of operating mill in area
    9. Work with NGOs, local native leaders and govt
    10.Provide transport, costed against FFB tonnage
    11.Explain this model to each longhouse,door2door
    12.Maybe possible to get Not-for-profit label
    13.Provide or broker heavy machinery for rental
    14.Train and employ local youths, incl senior post
    15.Best Environmental practise, avoid pulau,river
    16.Allow people to forage for wild vege in OP
    17.Provide storage/shop for fertilizers,chem etc
    18.Start small,establish track record with folks
    19.Modern,integrated farming concept-not OP only
    20.Learn the local dialects

    If you do this successfully,many NCR landowners in an larger area will seek your “smart partnership”. I fully respect that every company would be in business to make profits, and in my view – you can still make huge profit this way, and still be world class in social investment. This model will build capacity in the NCR land owners. While your company farm out the cultivation to the locals via some partnership scheme, your company can concentrate on core downstream mill operation and expand to biofuels if the oil price becomes favourably high. Overall cultivation productivity should increase, since the landowners would be motivated, as compare to imported Indonesion workers. The generated capacity for larger agribusiness partnership, will position your company to diversify to other downstream agribusiness incl food processing.

    I firmly believe that this investment model can be executed without LCDA involvement, in spite of what you might have heard to the contrary. And by all indications, the Dayaks will very likely prefer to be fully engaged in the development of their NCR land. As rural Dayaks still practise gentleman agreeman, there is very little risk of people renege from a partnership agreement: at any rate, I believe there is a legal way to guarantee such scheme with NCR land parcel as collatoral(witness by local government officers and native leaders).

    If you want to discuss this further, feel free to write to me (Dr John has my contact details).I’m happy to respond to any of your query.

    Best Regards, Meramat Tajak

13. Uchu Hawong@Raong on July 24th, 2009 7:41 am

    Nice suggestions, MT. I would like to add other suggestions. When nyapu blok, all the profit from the sale of balak kena sapu will be shared with the landowners. The more timbers in each landowner, the more share he will be given. Anang ka nyapu bala setail samseng ke udah tauka baka sida Along nya.

14. Uchu Hawong@Raong on July 24th, 2009 7:43 am

    Korezion:
    Anang ka nyapu baKa setail samseng ke udah tauka baka sida Along nya.

15. Iban Abroad on July 24th, 2009 8:01 pm

    DB,

    I think we need to set down especially at Randau DB proposed by tuai rumah to elobrate the guidelines and Mou of NCR JV or any Dayak property affect by the incoming JV project in detail, if not conduct futher study.

    From that we can compose all the ideas and argument, makes it into paper works and distribute to target person.

    Shall we talk and walk.

16. Uchu Hawong@Raong on July 24th, 2009 9:27 pm

    Aku arapka semua iban Julau, Sarikei enggau Bintangor anang ka alah tipu urang ari menua bukai deka nanam sawit ba tanah sida iya. Mupok meh nanamka diri empu. Tiap tiap kali bumai, alu umai nya ditanam kita enggau sawit ga enti udah ambis ngetau. Enggau chaha nya, kita enda berasai ngesaika bulu babas alai nanam sawit laban ke bendar nya kita ngelastik munoh dua iko burong kak ngena siti batu peleset. Anang kita tunduk agai seruan sida Jemot nya ke ka mantu sida SIME Darby nya nanam sawit ba tanah kita dia. Mapab pengawa nya alu urang bukai meda kita nya baka ke ka ngambi senang atau buhuk keheja. Ukai nya mayuh untung ke 30% nya deh enti dibandingka enggau kita nanamka dihi. Kumbai kita enda pandai sida Emot nya deka ngaga duit atas angin alu berindik ba kita ari ke nadai puku ngulihka mayuh duit. Nya meh kebuah iya mati idup muai Parti PBDS suba awakka iya bekuasa agi ngulihka komisin ari introduce sawit ke kompeni.

17. semugah on July 27th, 2009 2:14 pm

    GTJ,

    To get detail info on NCR Development in Sarawak, talk to Ministry of Land or LCDA/PELITA. They the details of The Concept, The Failures, The Issues and some success stories…the rest even dont understand the concept and objectives of NCR Development!

    Please also take note of what Mr Seliong wrote.

    Thank You.

18. Oil Palm Scam For Dummies « The Dyaks Blog on July 30th, 2009 3:37 pm

    [...] “In my opinion as an investor, it is frightening that Malaysiakini reports that there are many disgruntled natives over the recent Sime Darby-led JVC to develop 20,000 ha in Sarikei.” – Gan Tee Jin [...]

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