PT Mitra Austral Sejahtera (PT MAS) Assets Disposal & Legacy Issues

Sime Darby Plantation Berhad (SDP) would like to reiterate that as at 25 June 2019, PT MAS has ceased to be a subsidiary of SDP as we have effectively disposed our interest in the company to PT Inti Nusa Sejahtera.

The decision to sell-off the stake in PT MAS has been made by our Board of Directors in the best interest of SDP shareholders, after careful deliberation of all pertinent matters. It is driven mainly by the poor financial performance of the asset. Since it was established within SDP in 1996, PT MAS has accumulated losses totalling over RM300 million (Rp 1,070,000,000,000) as at December 2018. Our Board has concluded that this poor financial performance is no longer tenable. This decision also aligns with the Group’s current strategy of reviewing our investment in non-performing assets.

SDP has been making diligent efforts and investments, not just in developing our PT MAS’s operations but also in contributing to the socio-economic development of PT MAS's surrounding communities. Over the years, despite many challenges faced by the company, significant progress was made in resolving various disputes with the local communities.

We would like to thank various NGOs who have helped us throughout the years in highlighting and championing the concerns of the local communities surrounding PT MAS, whilst also recognising that SDP had instituted various corrective actions on these issues.

As part of our commitment to transparency, good governance and disclosure, and in keeping with the processes of the Roundtable on Sustainable Palm Oil (RSPO), SDP has provided to the RSPO regular updates on our progress to resolve PT MAS issues. These reports are in the public domain and can be accessed here

Since 2011, SDP had also issued various statements on issues surrounding PT MAS and these statements can be viewed on SDP’s website

Some of links to these statements are provided below for ease of reference:

Moving forward, SDP believes that it is now important for all stakeholders to concede that the main aim of the communities with regards to their land rights can only be obtained with the direct involvement and agreement of the authorities. In our effort to resolve the communities’ outstanding demands, SDP was  not able to go beyond what has been provided by the terms and conditions of our Right to Cultivate License (HGU) as granted by the government.

To resolve the impasse, RSPO, SDP and the Complainants (the Communities) including their NGO representatives had even agreed for a legal review of the Land Rights issue, following which a legal review process was initiated by the RSPO’s Complaint Panel in October 2018.

Based on the information in RSPO’s website, (as at 27 Nov 2019), the first draft of the legal review has been furnished to all parties for factual verification. This legal review is an ongoing process which SDP is committed to adhere to.

We would also like to share the chronology of the PT MAS issues (attached) since its formation in 1997 as Ponti Makmur Sejahtera and throughout the last 25 years during which its ownership has changed hands over several times. We hope this chronology will depict the effort by SDP to regularly and continuously engaged with the local communities, NGOs, local authorities and all other stakeholders who were involved directly or indirectly in the issues surrounding PT MAS.
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