TH Plantations (THP) – Deru Semangat Sdn Bhd (DSSB)

Date Progress
April 2020 09 April 2020:

Chain Reaction Research (CRR) released a report titled, “The Chain: Tabung Haji Plantations to Develop New Oil Palm Concession, Once Again Breaching Buyers’ NDPE Commitments”. 

The report stated that Deru Semangat Sdn Bhd (DSSB) which is 55 percent owned by Tabung Haji, submitted an environmental impact assessment (EIA) for the development of 8,094 ha of an oil palm Plantation in Mukim Tembeling, Malaysia. This is the third phase of project that began in 2017 and covers almost 12,100 ha. A High Carbon Stock (HCS) assessment has not been conducted for these developments, rendering them in violation of industry NDPE policies.

TH Plantations clarified that DSSB is a joint venture company owned partly by Lembaga Tabung Haji, for which TH Plantations merely acts as a management agent and is not the owner of the land.

TH Plantations is firm in their stance and commitment with regards to the NDPE Policy. The new top management of THP which took over the realm of the THP Group in 2019, on becoming aware of the non-compliance of the DSSB Project against the NDPE Policy, acted quickly to remedy the situation. Under the circumstances, TH Plantations has already conveyed its intention to terminate the Management Agreement to DSSB sometime in 2019, which in principle, is agreeable by DSSB.

The parties are now finalising the agreements and documentations to that effect and the handing over process had been scheduled to be in March this year. However, due to the pandemic situation, the Movement Control Order (MCO) imposed by the government has put matters on hold and the parties now hope to complete the handing over soonest once the MCO is lifted.

We will monitor the termination progress of the management agreement closely.

Suggestions:

  • This case is due for an engagement update soon.

 

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