In June 2014, Sahabat Alam Malaysia called on the Malaysian Government to address the negative impacts and unethical practices of its overseas or outward foreign direct investment (OFDI) in the past few years. Although the outflow of Malaysian investments abroad have been more than the inflow of investments into the country, serious concerns have arisen in relation to the impact of the palm oil industry in particular.
In the first quarter of 2012, the total overseas investment outflow totalled RM16.91 billion, more than double the inflow of RM7.48 billion. The Malaysian palm oil industry represents a modest position in terms of the total OFDI value. However, the industry’s adverse impacts are significant compared to any other sector that Malaysian companies invest in because of the development of plantation estates especially in tropical forests, community land and peatlands in overseas countries.
Sometime in early 2014, Sahabat Alam Malaysia commissioned Aidenvironment to conduct a study to assess the scale of Malaysian overseas FDI in oil palm plantation land bank, and to illustrate why global and local stakeholders question the industry’s good reputation.
This study identified 50 Malaysian companies that have acquired over 200 plantation companies with a total overseas oil palm plantation land bank of 3.5 million hectares. The dominant recipient of Malaysian FDI in oil palm land bank is Indonesia (52%), followed by Papua New Guinea (PNG) (31%) whilst other third countries account for the remaining 17%. Read the full report.