ABSTRACT
Production of crude palm oil (CPO) in Malaysia more than tripled between 1975 and 1985. This chapter explains how Malaysia eliminated its leading water pollution problem without blocking the growth of the palm oil industry. One might expect abatement costs to rise with capacity utilisation, assuming that the capacity of a mill's treatment system is proportional to its processing capacity. At independence in 1957 Malaysia was a typical primary commodity exporter. Like most of Malaysia's leading crops, the oil palm, Elaeis guineensis, is an exotic plant. CPO mills became the major source of water pollution in almost every major river basin in the peninsula. Pollution from palm oil mills was not the sole factor motivating the passage of the Environmental quality Act-for example, rubber mills were also a major source of water pollution-but it was arguably the most important factor.
