In a document sighted by FMT, the tender with this counter-trade condition was in relation to the supply, delivery and commissioning of 18 units of light combat aircraft/fighter lead-in-trainer (LCA/FLIT) and associated equipment to the Royal Malaysian Air Force (RMAF).
The tender, which closes on Sept 22, also proposes the use of the remaining balance to transfer technology, knowledge and skills, provide global market access, have local content and develop human capital.
According to palm oil industry sources, the move to make barter mandatory can be construed as the country’s way to fight the strong anti-palm oil lobby in European Union (EU) countries, among others.
In a recent report published by the defence website Janes, this purchase is part of RMAF’s “Capability 55” plan, adding that the 2018 plan calls for the procurement of 36 LCA/FLIT platforms in two phases.
“Eighteen aircraft are set to be purchased from 2021 and the rest from 2025. The 36 aircraft are intended to equip two squadrons.
“The FLITs are meant to replace the service’s currently grounded fleet of seven Aermacchi MB-339CM jet trainers, while the LCAs will replace the 18 BAE Systems Hawk Mk 108 twin-seat and Mk 208 single-seat LCAs in service,” it said.
National Association of Smallholders (NASH) president Aliasak Ambia, when contacted, welcomed the move, saying that this was what he had hoped for to save the 600,000 smallholders in the country.
He said the strong EU anti-palm oil lobby was threatening this group of Malaysians whose families depended on this trade for their survival, adding that the total number of dependents could total more than 1.5 million.
“This provision must be included in all other international tenders, especially when it comes to possible procurement of equipment from the EU,” he said.
In a report last month, FMT had quoted Aliasak urging the government to flex its muscles by leveraging the huge multibillion-dollar defence contracts with EU countries against palm oil exports.
He said there had been a systematic anti-palm oil campaign in the EU over the last 10 years, all supported by their parliamentarians and legislation.
He added that France and Italy, especially, were pushing through legislation that might see the end of palm oil entering these countries despite having earned big bucks selling defence equipment to Malaysia.
“The culmination of this campaign will see the exclusion of palm oil as part of the biofuel mix by January 2023. It will only allow biofuels using rapeseed and soybean oils, which are their home-grown products,” he had warned.