For Ettol Kumpilon, the switch from growing rice to oil palm on his small family farm in Malaysia’s eastern state of Sabah has enabled him to renovate his home, send his eldest child to school and build up a healthy pot of savings.

But with climate change fuelling rising temperatures that are hurting his yields, the 40-year-old has joined an innovative scheme that aims to raise sustainability standards among all palm oil producers across the state on Borneo island.

Its goals are to protect wildlife and forests, tackle land disputes and worker abuses, improve harvests and open the door to premium-paying palm oil buyers from around the world.

“Palm oil has changed my life, especially economically,” the father of two told the Thomson Reuters Foundation.

“(But) there is definitely a temperature difference now in my village, compared to in the 1980s. The fertility of our land was better when things were cooler.”

Palm oil is the world’s most widely used edible oil found in everything from margarine to soap, but it has faced scrutiny from green activists and consumers, who have blamed its production for forest loss, fires and worker exploitation.

Sabah produced about 5 million tonnes in 2020 - about 6% of global output - making it the second-largest palm oil state in Malaysia, which is the world’s number-two producer, according to green group WWF.

Sabah’s palm oil industry, which relies on smallholders for 20-30% of output, contributes 1 billion ringgit ($238.7 million) to state coffers each year, with plantations spread across 1.7 million hectares (4.2 million acres), according to officials.

Nonetheless, 65% of Sabah is still covered by lush forests home to often-endangered wildlife including wild boar, orangutans, proboscis monkeys and pygmy elephants.

Looking to balance nature conservation with supporting its palm oil sector, Sabah launched the Jurisdictional Certification of Sustainable Palm Oil (JCSPO) initiative in 2015 with a target of producing only oil certified as ethical and green by 2025.

Bringing onboard smallholders like Kumpilon - who has a six-hectare farm outside the coastal city of Sandakan - is a key challenge and crucial to the project’s success.

“We’ve learned how to manage our fields and finances, and it’s helped us when dealing with palm (oil) mills,” said Kumpilon, who joined the scheme about five years ago.

“I am not alarmed or freaked out by climate change but something needs to be done,” he added.

Helping steer Sabah’s palm oil sector towards a greener future under the initiative - which unites growers and consumers, local communities and conservation groups - is the state forestry department’s chief conservator, Frederick Kugan.

Sandakan, where he is based, is known as ‘Little Hong Kong’ due to an influx of Chinese migrants over the last century. It was once dominated by the timber trade before becoming a major grower and exporter of palm oil.

Companies working in the state include Malaysia’s Felda and IOI Corp, Singapore-based agribusiness Wilmar International and consumer goods giant Unilever.

So far, Kugan said, the palm oil initiative has identified key conservation areas, introduced supportive laws and mandates, consulted with industry and environmentalists, and looked at how to tackle challenges facing smallholders through certification.

The focus this year will be on ramping up pilot projects that have helped small farmers qualify as green and ethical.—Reuters