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Last Update :Tuesday 21 August 2018
Funding on RSPO PDF Print E-mail


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1.  Backgound
Under 2009 Budget, the government has allocated an amount of RM50 million to finance the RSPO activity. The Fund aims:
  1. (i) To support the community programmes such as to improve schools, provide accommodation, hospital and to improve roadways surrounding the estate;
  2. (ii) To support conservation programmes such as to increase the biodiversity of the estate;
  3. (iii) To produce of sustainable palm oil.
2.  Objective
This guideline provides the funding mechanism for the implementation of RSPO Fund for smallholders certification project, biodiversity programmes, social development and impacts and environmental projects.
3.  Scope of RSPO Fund
The scope of financing under the RSPO fund covers the following activities:
a. Certification programme for individual and organized smallholders (FELDA, FELCRA, RISDA, State Governments) and estate;
b. Biodiversity and environmental programmes (for new plantings and replanting) to assess the effect of development and for implementation of programmes to preserve, protect and reduce the impact of such plantings on the environment;
c. Social development programmes;
d. Activities involving publications, information dissemination and organizing seminar for RSPO certification; and
e. Other activities to increase the sustainable production palm oil by smallholders.
4.  Scope of Financing of the Fund
4.1 Biodiversity and environmental programmes (for new estates and replanting) are to evaluate effects of development and to implement programme to preserve, protect and reduce the impact to environment to
cover the following activities:
4.1.1 To Encourage the Environmental Protection Activities (Proposed Mitigation Measures)
  • Environmental Impact Assessment for the area to be planted with oil palm. This is to identify steps to be taken to prevent and reduce the environmental effect surrounding the oil palm estate in order not to disturb the flow of the rivers.
  • The cost to implement the evaluation of the effect on the environment and the activities to reduce and prevent pollution will depend on the area and the scope. It has to carry out by the consultant firms registered under DOE and the steps taken are actually development of physical structure or action to be taken or carrying out practices to prevent environmental pollution.
4.1.2 Endangered, Rare and Threatened Species – ERTS
  • Assessment and identification of the presence of endangered, rare and threatened species in the area to be developed for oil palm. A list of ERTS including Rafflesia, tigers, elephants and Orangutan. Follow-up steps that can be taken include to maintain the ERTS area in the estate or to transfer the ERTS to another area in order to prevent destruction of the ERTS.
4.1.3 High Conservation Value Areas – HCVA
  • HCVA is an area where you can find protected or almost threatened animals and plants. These type of areas has to be identified and preserved as original forest so as to preserve the endemic species of flora and fauna.
  • The cost to perpetuate this area will depend on the size and type of the area and the fauna and flora present.
4.1.4 Prevention of conflict between Human and Wildlife
Estate located near the forest will be encroached by wildlife such as elephants or tigers and may destroy the crops. Therefore the estate has to establish a buffer zone by planting trees between the forest and estates so that the elephants will not enter the estate.
4.1.5 Study and Project on Biodiversity
  • Based on the EIA study, the forest area is identified to contain numerous varieties of species of animals or plants which need to be protected, the area cannot be developed but has to be preserved and managed so that the biodiversity of the area can be maintained. The cost of the project to preserve the biodiversity of wildlife will depend on the size of the area and the type of animals and plants present
4.1.6 Project on Reduction of Subsidence of Peat Soil
  • Peat soil will produce carbon emissions when it is dried. Therefore, necessary steps need to be identified to overcome this problem. The construction of drainage canals to maintain the underground water level and reduce which peat subsidence is one of the ways to overcome the Carbon emission. The construction of drains and water management will involve expenditure based on the size of the area.
4.2 Evaluation of social development programmes and the impact which encompasses the following activities:
4.2.1 Steps and project on reduction of social impact
  • Project on the establishment of oil palm estate may involve customary and natives lands. The estate must have programmes or activities to reduce the effect of development on their interest by providing compensation or transfer to another suitable location. The cost involved is for the formation of arbitration panel composition of members and the implementation of the arbitration process but does not include cost due to compensation.
4.2.2 Water supply, medicines, education facilities, transportation and welfare of the workers, cultural and religious projects
  • Implementation social responsibility project is to improve the estate and mill workers welfare by providing necessary basic facilities
4.2.3 Contribution to local community
  • The estate has to provide facilities to the community nearby the estate and the benefits obtained will be enjoyed together with the local community. Such facilities include sport facilities and public recreation facilities for the nearby community.
4.3 Projects that contribute toward environment and which contribute towards reduction of green house gas, GHG.
  • Project which can get CDM assistance which included methane capturing, composting, recycling of Palm Oil Mill, Effluent (POME) etc. The mills are capturing the methane from the mill processes and POME. Composting also reducing gas emission.
5.  Amount of Finance under RSPO Fund
5.1 Biodiversity and Environmental Programmes
  • Study financing– maximum RM10,000 for each study;
  • Project financing– maximum RM50,000 for each project.
5.2 Social Development Programme
  • Financing of social development programmes by smallholders – maximum RM 10,000 for each project.
6.  Application Procedure

All members of the industry are eligible to apply the RSPO Fund to implement the RSPO certification. Each application must used the application form as attached. The application form also can be obtained from the Malaysian Palm Oil Board (MPOB) website, and Malaysian Palm Oil Association website.

The application will be processed as follows :

i. Every application has to use the application form;
ii. MPOB will process every application and present it to the Technical Committee;
iii. The Technical Committee upon processing will recommend every application that is inclusive the amount of grant prepared to the Main Committee RSPO Fund for consideration;
iv. The committee will consider all recommendations made by the Technical Committee and will give the decision; and
v. The Technical Committee will distribute the allocations; monitor and prepare the progress report of the projects financed to the Main Committee.
The completed form should be forwarded to:
43000 KAJANG,

(Attn.: Wahid Omar, Secretary to RSPO Fund Technical Committee)

7.  Terms and Conditions
i. This incentive scheme is enforced from 1 May 2009;
ii. For estate, this incentive encompasses cost on implementation of sustainability project/activity but does not include certification cost/fee;
iii. For the smallholders, incentive includes cost of project implementation/monitoring/sustainability activity and also group cost/fee;
iv. Repayment of the project costs will be maid after the implementation and certification of the area planted has been carried out;
v. Payment will be made based on the calculation made by the RSPO fund Committee;
vi. If the facts in the proposal are not accurately documented or is an infringement of the terms and conditions of this scheme, RSPO Fund Committee has the right to request the return of the grant given and if refusal to do so, legal actions will be taken;
vii. The application form can be obtained from the Malaysian Palm Oil Board (MPOB) Website: and Malaysian Palm Oil Association Website: The completed form has to be submitted directly to MPOB.
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