Malaysia determined to counter EU’s resolution on palm oil

Seven parliamentarians, along with MPOB chairman, are currently in Europe to deal with the situation


Malaysia is firm in its bid to clear misconception and allegations on the country’s palm oil sector, following the European Union’s (EU) resolution to curb the imports of palm oil into the region.

In April this year, the EU had issued a resolution to only allow imports of environmentally-sustainable palm oil into the EU starting 2020, claiming that palm oil producing countries, including Malaysia, had inadvertently caused deforestation and were destroying the environment.

The government, in its part, had maintained that the EU’s resolution is one-sided and unfair, stating that the 200-odd-page of preliminary report as inaccurate.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong told The Malaysian Reserve that it was unfair for the European Parliament to come up with a resolution without knowing what exactly is going on in this country.

“The requirements they have set and the standards that are going to be implemented do not fit us. Do they (EU) even know the conditions of the palm oil plantations in our country?” Mah questioned when met recently.

Malaysia is the world’s second-largest producer of palm oil and accounts for 29% of global palm oil production and 37% of world exports. The EU is the second-largest export destination for Malaysia’s palm oil after India.

“They claimed that palm oil plantations here kill orang-utans and alleged that the planting and harvesting of the palm seed were done in an improper manner, but all of these are not true,” he said.

The minister said palm oil players in Malaysia always complied with proper environmental practices.

“These allegations may have stemmed from big players running other edible oils industries and are competing with palm oil. They probably conspired and did this to bring the industry down,” he said.

The government has sent seven parliamentarians, along with Malaysian Palm Oil Board (MPOB) chairman Datuk Seri Ahmad Hamzah, to Europe to deal with the situation.

“They will be there from Oct 14 to Oct 21, and we are hoping that they will be able to explain the actual conditions of the palm oil plantations here and make them understand that it is not what others claim it to be.”

Mah stressed that the ministry had taken into account the EU’s non-binding resolution, thus the government announced the mandatory implementation of the Malaysia Sustainable Palm Oil (MSPO) certification.

MSPO was premised on seven principles ranging from management commitment and responsibility; transparency; compliance to legal requirements; and best practices; to social responsibility, health, safety, employment conditions; environment, natural resources and biodiversity; and development of new plantings.

Malaysian Palm Oil Council CEO Dr Kalyana Sundram said last week that Malaysia has no qualms to meet the EU’s requirements as long as they are reasonable.

According to Kalyana, the European Commision is in preliminary analysis of the resolution and as long as the country is strengthening the MSPO and show that it is viable, the issue is expected to be resolved, one way or another, to a certain extent.

“They still will talk about it but we hope the EU will not require an EU-based certification because we are a producer country and such certification must come from a producer country. We also have business-to-business certification RSPO (Roundtable on Sustainable Palm Oil). Let all the certifications improve themselves and prescribe to the EU requirements and see how it goes,” he said

Kalyana also perceived this whole debate on sustainable production of vegetable oils rather one-sided.

Malaysia currently claims 56% forest and green cover, a commitment it has maintained since the Rio Earth Summit and new land for oil palm cultivation is limited in Peninsular Malaysia and Sabah. In Sarawak, extensive research is ongoing to assess the value of peat areas for any type of agricultural activities.

Mah said the government has agreed in principle to allocate RM120 million in incentives for oil palm smallholders to obtain the MPSO certification. The incentive, he said, was to ease the financial burden of the stakeholders as the government announced mandatory implementation of the MSPO by end-2019.

As of August 2017, the total planted area that has been certified under the MSPO Certification Scheme is 245,381ha.

The certified areas include 237,509ha under plantation companies, 3,868ha under organised small-holders and 4,004ha under independent smallholders.

In addition, a total of 22 mills have also been MSPO-certified.

The minister had previously said that the MSPO certification scheme would allow palm oil products to obtain premium prices in the international market, in line with demand from European countries which only allow for palm oil imports with accredited certifications.