‘Importation of ‘banned’ Olien in guise of Palm Oil is economic sabotage’

Stakeholders in the Oil Palm industry have raised concern over the importation of Olien – refined vegetable oil, prohibited by the Federal Government.

Concern sector players claim that the banned product is imported as Crude Palm Olien (CPO), under the guise of Crude Palm Oil (CPO), to deceive unsuspecting government agencies vested with the responsibility of checking products at the port.

The influx of this banned product does not only pose risk of looming collapse of the industry, as producers of CPO will be in danger of closing down due to loss of revenue, there is also fear of huge job loss, as lots of investments in the industry are at risk.

According to the industry analysts, the importation of olien has grave consequences on the oil palm sector in Nigeria because the oil palm companies can no longer sell their products.

It was also learnt that stakeholders have been complaining on the drop of prices due to the influx of the banned product into the country.

The other concern raised by the stakeholders is the upsurge in the importation of CPO into the county, which is also inimical to the growth of the industry. They claimed that though the law allows the importation of palm oil, but subject to the payment of 35 per cent duties and tariff, the imported products are sold cheaper than the local products, raising doubt on the possibility of the companies paying the required import duties.

There are allegations that the unscrupulous elements in these acts are working in tandem with some government agencies to undermine efforts and also block huge revenues into the country’s purse.

The Chairman, Plantation Owners Forum Of Nigeria (POFON) and Chief Executive Officer, Aden River Estates Limited, a medium size Oil Palm Plantation, situated in Edo State, Mr. Emmanuel Ibru, said based on the development, the large scale refiners of vegetable oil and other players in the industry are in danger of imminent shutting down.

He said: “In the last six months, there has been an upsurge in the importation of Crude Palm Oil (CPO) and oil related products. By Customs and excise code, the CPO is not banned and there is a duty that must be paid. Then, there are also strong rumours of olien coming into the country.

“However, olien, which is a refined vegetable oil, is not allowed into the country, but we have been hearing of Crude Palm Olien coming into the country and as far as we have been in the oil palm industry for many years, anything olien denotes that it has been refined. So, to the best of my knowledge and unless proven wrong, I am not aware of anything called Crude Palm Olien anywhere in the world. The unscrupulous elements are bringing in olien, tagging it CPO in the guise of Crude Palm Oil.”

Ibru, who noted that there have been a lot of attempts to increase palm oil production in the country, especially in the last 15 to 20 years, citing Edo State, through its Oil Palm Initiative where lands were given to corporations and new players coming into the industry, regretted that if urgent steps are not taken by the Federal Government, the industry may face a steady decline.

“The large scale refiners of vegetable oil serve as the off takers for the producers of the CPO. Now, it follows that if they cannot sell their refined products because of this influx of the olien, then, it will be difficult for us to sell to them, which means that they are in danger of closing down and we are also in danger of closing down.

“You must understand that there are a lot of investments in the industry, both by the plantation owners and the Vegetable Oil Producers of Nigeria. Secondly, they employ a substantial amount of labour in the country, so you can imagine with the difficult times that exist already what will happen if the industry of this nature is to collapse.

“As I always mentioned, we know that there’s a gap between supply and demand in Nigeria, which at this point in time we cannot meet. However, the government does derive considerable revenue from the importation of the CPO, provided that all importers do the right thing, which is to make sure that every single tariff and duty is paid. The Federal Government stands to lose a lot of revenue from excise if payment of duties is circumvented in one way or the other,” he said.

On his part, the Managing Consultant/Chief Executive Officer, Foremost Development Services Limited (FDS), Mr. Fatai Afolabi, disclosed that plantation owners and other stakeholders have been complaining on the drop of prices due to the influx of olien into the country.

“If anyone is importing palm oil, they are not committing any crime or smuggling because the law doesn’t prohibit importation of palm oil. The legality is subject to payment of tariff, duties and development levies. The criminality aspect of it is if anyone is importing without paying tariff.

“However, if anyone is importing refined vegetable oil, it is illegal because it is prohibited. The intention of the government is to encourage local production and refining, so anyone bringing in refined oil is doing illegal business,” he said.

To save the industry from imminent collapse, Ibru appealed to the Federal Government to ensure no waivers are issued for the importation of CPO, adding that any permit to import the CPO should ensure that all duties are paid.

“Once the product lands in Nigeria, they should be rigorously checked to confirm the content – whether it is the CPO or olien. The CPO is unrefined and there are tests that will show straightaway, if the product has been refined or not.

“This stringent check must be adhered to. Like I said, olien is banned and we will not want to see its importation into the country, anybody bringing olien – the banned product is tantamount to economic sabotage.”