ICYMI: Malaysia Considering New Strategy To Counter ‘No Palm Oil’ Labels

The Oil Palm would like to bring to your attention an op-ed by the Malaysian Minister for Plantations and Commodities, Datuk Seri Mah Siew Keong, who called out European companies who openly undermine and attack Malaysian Palm Oil and millions of the country’s small farmers.

The Minister singled out Denmark’s Lurpak, an RSPO member, which has brazenly decided to launch anti-Palm Oil labels inside the borders of Malaysia. The comments from the Minister signal an apparent new determination on the part of the Malaysian Government to deal with the problem.

Read the full opinion editorials from the New Straits Times and The Star

“It is the responsibility of all of us to hold to account those companies that are undermining our national interest in this way and deliberately undermining palm oil, which is a key pillar of the Malaysian economy.”

“Lurpak’s parent company is a member of the Roundtable on Sustainable Palm Oil (RSPO), whose rules include a commitment from members not to besmirch or undermine sustainable palm oil production. Lurpak’s packaging is a clear attempt to undermine and criticise Malaysian palm oil, and to openly promote alternative oils.”

Read the full opinion editorials from the New Straits Times and The Star

ICYMI: Achieving Malaysia First & America First, Together

The Oil Palm would like to bring to your attention an opinion editorial authored by Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities for Malaysia, that appeared in Morning Consult ahead of the meeting between Malaysian Prime Minister Najib Razak and U.S. President Donald Trump, celebrating the 60th anniversary of ties between the two nations.

Morning Consult: Achieving ‘Malaysia First’ Along With ‘America First’

“My ministry oversees Malaysian commodities that include timber and rubber. It also oversees Malaysia’s world-leading palm oil sector, which provides low-cost, high-quality vegetable oil and food for U.S. producers and retailers. In particular, Malaysian palm oil has helped U.S. companies to reduce transfats levels, benefiting the health and well-being of the American people.”

“More importantly, the farmers that cultivate and produce Malaysia’s rubber and palm oil are reminiscent of the American agricultural success story. Malaysia is a small country relative to the U.S. — we have 650,000 small farmers compared to millions in the American heartland. In Malaysia, we are as supportive of our small farmers across the country as President Trump is of his farming communities in great agricultural states like Nebraska, Kansas and Iowa, to name a few.”

Read the full opinion editorial here: Achieving ‘Malaysia First’ Along With ‘America First’

Anti-Palm Oil Campaign Dressed Up As ‘Certification’

The demonization of palm oil has stepped up a notch with the official launch of a new anti-palm oil certification scheme in both the UK and in Australia. The International Palm Oil Free Certification Accreditation Program (IPOFCAP) claims that it will certify products as being ‘palm oil free’ through an auditing process.

When we first read the press release, a few questions immediately presented themselves.

Why does this ‘palm oil free’ scheme need to exist? The short answer is that it doesn’t. Ingredient lists exist already. Having a ‘certification program’ for a non-ingredient is superfluous and faintly ridiculous.

So, then, why does it exist? The only logical reason this new IPOFCAP scheme exists is because the individuals behind it want to publicly attack oil palm growers – most specifically 600,000 small farmers in Malaysia whose families depend on oil palm for their incomes and livelihoods. It is that simple. The IPOFCAP exists to bring harm to the lives and incomes of small farmers in Malaysia, and across the developing world.

The second question to consider is – why on earth would any company sign up?

Is there a sustainability rationale for putting this logo on your product? No. Palm oil certification schemes already exist – both governmental and multi-stakeholder. This is simply not serious by comparison.

Perhaps consumer demand is a reason for a company to sign up? No. Palm oil remains the world’s most-popular cooking oil, and many of the best-selling products in the UK and Australia contain palm oil.

Could there be a publicity or PR benefit to joining in? Again, no. It’s an unknown scheme marketed by an unknown (and largely secretive) group of individuals. Even the launch has attracted very little attention.

There is only one reason that any company would sign up to participate– they want to support an attack against palm oil small farmers. If a company wants a proper certification scheme, those exist already. If a company signs up to IPOFCAP, however, it has made a conscious decision to promulgate untruths and harm against small farmers.

Let’s take a closer look at the victims of this new campaign.

The victims are from rural villages all across South-East Asia. In the mid-twentieth century these areas would contain some of the least-developed communities in the world. The agricultural revolution made it to those people primarily through oil palm. Malaysia’s poverty level has reduced from 50% then, to under 5% today. However, by no definition are these communities rich. They could not compete with wealthy Australian and British supporters of the IPOFCAP scheme, in terms of lobbying expenditure or corporate power. Is IPOFCAP trying to push those farmers back into the poverty they had previously escaped?

It is clear, then, who is harmed. The natural next question is – who does it help?

Well, it could help giant multinationals – such as Casino in France – in their anti-palm oil lobbying campaigns. It could also help rich European farmers who milk taxpayer subsidies in order to fund lavish (but highly unproductive) EU oilseed production. (If palm oil use is reduced, companies will be forced to turn to the uncompetitive EU oilseeds and consumers will pay higher prices).

To summarise – the potential beneficiaries are large, rich, Western multinationals, landowners and lobbyists. The potential victims are 600,000 small farmers in Malaysia, and millions more across Africa, Indonesia and elsewhere. IPOFCAP have essentially designed a plan for inverted wealth transfers: taking from the poor to give to the rich.

Outside of the obvious moral bankruptcy, there are a couple of more self-interested reasons why companies will not sign up to the IPOFCAP scheme.

First, many such companies already work with existing palm oil certification schemes. RSPO rules, for example, prevent companies from undertaking actions that undermine sustainable palm oil. Clearly, signing up to IPOFCAP would be contrary to the spirit of RSPO rules.

Second, many of the major multinational brands have significant operations in Malaysia, Indonesia and other palm oil-producing countries. We’re talking about retailers, food producers, snack brands, cosmetics manufacturers, etc. Signing up to a campaign for ‘Palm Oil Free’ certification is not a sensible activity for companies operating in palm oil-producing countries. Both Malaysia and Indonesia have stated they will oppose anti-palm oil measures by Western companies and governments. Why would a multinational risk its market share in SE Asia for a ‘certification’ scheme that no-one has heard about? The likelihood is that most companies won’t take the risk of offending the consumers and governments in South-East Asia.

The Oil Palm has written many technical analyses of new developments in the palm oil marketplace in the past – from IISD, IDDRI and IFPRI; from the Innovation Forum to the Kiel Institute to Columbia University; and many, many more.

IPOFCAP is not serious enough to deserve such an analysis. It is a spiteful campaign against small farmers, pure and simple, and should be treated as such by all concerned.

Malaysia’s Ominous Warning to Europe in the Face of Renewed Efforts to Discriminate against Palm Oil

Prime Minister Datuk Seri Najib Abdul Razak stated in The Sun Daily that ‘whoever boycotts oil palm products, they will face retaliation’.

The Malaysian Minister of Plantation Industries and Commodities, Datuk Seri Mah Siew Keong, similarly stated that ‘Malaysia has strict standards. If they have unfair practice against us, we too can retaliate’.

These comments come on the heels of a baseless campaign by European interests against the global Palm Oil industry, and in particular, Malaysia, a key regional friend of the European Union.  Worse, the European Commission has begun to sing the same tune as the European Parliament, and repeat the same baseless claims about Malaysian Palm Oil.

The comments by the Prime Minister and Minister, respectively, are a clear signal to leaders across Europe that efforts to erect barriers and additional costs to Palm Oil through the EU FLEGT Action Plan/Deforestation Action Plan will be met with retaliation. On the other hand, should Europe want to constructively engage and take into account the facts on the ground and the interests of Malaysia, we stand ready to work together.

The Sun Daily: Najib threatens to retaliate EU’s resolution on oil palm

By Amar Shah Mohsen

‘The Prime Minister said he recently spoke with Indonesia President Joko Widodo at the Asean summit about sending delegates from their respective countries to the EU parliament in the coming weeks to explain and clarify matters’

‘We (Malaysia and Indonesia) will convince these countries (European Parliament) that whatever claims they have said are baseless. We will also tell them that we are not without our own capabilities’

‘We too buy products from them. So whoever boycotts oil palm products, they will face retaliation from us Malaysia and Indonesia’, Prime Minister Datuk Seri Najib Abdul Razak said during the Malaysian Palm Oil Industry 100 Years celebration.

‘EU’s claim that palm oil products are leading to deforestation is inaccurate, stressing that Malaysia has strict standards. If they have unfair practice against us, we too can retaliate. Let’s not get into specifics. But we will try to solve the matter’, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said.

Read the full article here: Najib threatens to retaliate EU’s resolution on oil palm

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The Star: 100 Years of Glory and the Next Horizon

by Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities

‘Over these 100 years we have witnessed extraordinary growth and innovation. From its humble inception, the palm oil industry is today the main pillar of the commodities sector, contributing RM67.6bil in export value in 2016, equivalent to 6.1% of Malaysia’s GDP. With more than two million Malaysians involved on the palm oil value chain including 644,522 smallholders, its impact on the well-being of the rakyat is huge’

‘Despite these successes our road to 100 years has not been the easiest … the opponents are primarily Europeans and the assault includes the French Nutella Tax … and the more recent resolution by the European Parliament. It is essentially a trade issue camouflaged as an environment protection measure’

Read the full opinion editorial here: 100 Years of Glory and the Next Horizon

ICYMI: Minister Datuk Seri Mah Siew Keong’s Vision for Malaysian Palm Oil

The Oil Palm would like to bring to your attention an opinion editorial authored by Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities for Malaysia. The Minister reflects on Malaysian Palm Oil’s 100 years of success, and looks ahead to the future.

The Star: 100 Years of Glory and the Next Horizon

by Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities

‘Tomorrow we will commemorate the 100th year of commercial oil palm planting’

‘Over these 100 years we have witnessed extraordinary growth and innovation. From its humble inception, the palm oil industry is today the main pillar of the commodities sector, contributing RM67.6bil in export value in 2016, equivalent to 6.1% of Malaysia’s GDP. With more than two million Malaysians involved on the palm oil value chain including 644,522 smallholders, its impact on the well-being of the rakyat is huge’

‘Despite these successes our road to 100 years has not been the easiest … the opponents are primarily Europeans and the assault includes the French Nutella Tax … and the more recent resolution by the European Parliament. It is essentially a trade issue camouflaged as an environment protection measure’

‘How palm oil will be remembered another 100 years from now will depend on our vision and conviction’

‘In the immediate term, the accelerated roll-out of the Malaysian Sustainable Palm Oil (MSPO) certification is totally crucial … As smallholders make up almost 40% of palm oil hectarage, the MSPO is a key bridge to ensure compliance to sustainable standards with a reasonable cost and optimised process for those with less resources.’

Read the full opinion editorial here: 100 Years of Glory and the Next Horizon

Statement from Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong following European Parliament Report on Palm Oil and Deforestation

The Minister of Plantation Industries and Commodities, YB Datuk Seri Mah Siew Keong expressed concern on the recent voting of the Committee on the Environment, Public Health and Food Safety of the European Parliament (ENVI Committee) on Motion 2016/2222(INI) which includes opinions of the  Committee on Agriculture and Rural Development (AGRI), the Committee on International Trade (INTA), and the Committee on Development (DEVE) for a European Parliament Resolution on Palm Oil and Deforestation of Rainforests.

The Resolution links the palm oil industry to deforestation and the disappearance of the ecosystems. Among the main elements of the Resolution includes the need for a single certification that will guarantee only sustainably produced palm oil enters the European Union (EU) market and the requirement for food labelling indicating palm oil is sustainably produced through packaging or information accessible through technological features. Such Resolution is perceived as trade impediment and may have a significant negative effect on Malaysia’s exports. Furthermore, the requirement for mandatory labelling requirement targeted specifically for imported palm oil products could be considered as a significant departure from WTO commitments.

The palm oil industry in Malaysia is one of the well-regulated industries in the world and being one of the major producer and exporter of palm oil products globally, Malaysia would like to strongly reiterate that the palm oil industry subscribes to sustainable practices. In this regard, Malaysia has implemented the Malaysian Sustainable Palm Oil Certification Scheme (MSPO) beginning 2015 to promote the production of sustainable palm oil. MSPO is based on compliance to domestic laws and regulations, including the development and management of oil palm cultivation that subscribes to best environment and agricultural practices. As of January 2017, a total of 221,548.14 hectares have been certified under the MSPO scheme. To emphasize on Malaysia’s seriousness towards ensuring that palm oil is produced sustainably, the MSPO certification scheme has been made mandatory by December 2019 and it will be a move towards a truly reliable and internationally acceptable certification system. For Malaysian palm oil, our vision is through a MSPO certification as well as products identified through a Malaysian MSPO logo that would be the hallmark of quality and sustainability assurance to our global customers.

Malaysia strongly opposes the Resolution by the EU Parliament as it will have a negative repercussion on the palm oil imports into the EU and a devastating impact on the economy of producer nations. Currently, the EU is the largest market for Malaysian palm oil and palm-based products where in 2016, EU’s imports were valued at around RM10 billion. It is important to note that the palm oil industry is an essential component of the agriculture sector in Malaysia and has been instrumental in addressing rural poverty and providing employment opportunities. This industry is important to the livelihood of small farmers where, there are currently more than 600,000 smallholders in Malaysia, which is close to 40% of the total planted area. The palm oil industry has contributed to RM67.6 billion in 2016 in terms of export earnings and accounted for 55.4% and 8.6% of total commodity exports and total merchandise exports respectively.

In addition, Malaysia has also put in place various regulations related to conservation of its forest and biodiversity. Malaysia currently has 55.3% of land area under forest cover. This is in line with the commitment at the Rio Summit 1992 to retain at least 50% of the land area under forest cover. Palm oil cultivation currently accounts for 5.74 million hectares which occupies around 17.4% of the land area.

It is also important to note that this Resolution arises out of the Commission finding of 2013 where EU states that they are the biggest importer of deforested products with soyabean and soya cake from Brazil and Argentina amounting to 50%. Palm oil is in third place. Therefore the move by EU to single out palm oil and not the other crops that account for more than 50% of European imports that have been shown to contribute significantly towards deforestation through cattle grazing (animal husbandry) and soya cultivation is unjustifiable.

The Ministry of Plantation Industries and Commodities will continue to engage the relevant stakeholders in the European Union apart from initiatives that have been undertaken to engage the Members of European Parliaments through familiarisation visits to the oil palm plantation to educate on the sustainable practices of Malaysian palm oil industry. Malaysia will also collaborate with Indonesia under the ambit of Council of Palm Oil Producing Countries (CPOPC) to jointly represent our case highlighting the environmental and sustainable development of the oil palm industry and its contribution to the economy and poverty eradication as well as nutritional attributes of palm oil.

 

YB DATUK SERI MAH SIEW KEONG

Minister of Plantation Industries and Commodities

The European Parliament’s Deeply-Flawed Campaign Against Palm Oil

The European Parliament’s Committee on Environment, Public Health and Food Safety is set to vote on a deeply-flawed draft report that contains a number of falsehoods about Palm Oil.

Let’s set the record straight.

Myth #1: The draft report claims that “Cultivation of palm oil over the last 20 years has been the cause of 20% of all deforestation.”

Fact: This is completely false and has disproved by the EU’s own research. In 2013 the EU commissioned research[1] looking into the causes of deforestation globally. The report calculates that over a 20-year period, about 132 million hectares (Mha) of deforestation can be attributed to the agriculture and forestry sector. Of this, 58Mha – a little less than half — was cleared for livestock grazing. The others are “soybeans (13 Mha), maize (8 Mha), oil palm (6 Mha), wood products (5 Mha), rice (4 Mha), and sugar cane (3 Mha).” So, out of a total 239Mha of deforestation, 2.5 per cent can be attributed to Palm Oil, less than soybean, beef, maize and infrastructure development[2].

Myth #2: Companies producing Palm Oil are guilty of “Deforestation”.

Fact: This is a ‘straw man’ argument. Forest Transition is a well-recognised path to development, whereby poor countries develop their resources to maximize food production and human development. Europe engaged in massive unsustainable clearing of forests for its development. In Malaysia, 56.4% of land has been kept as forest area, while setting aside 20% of land for agricultural development.  This is a track record of development and forest protection that no EU country can match.  Again, no EU country can match this record.  Belgium has 23% forest area, France has 31%, Italy has 32%, and the Rapporteur’s home country, Czech Republic, has 36%. This is a far cry from the claims made by the Committee.  Perhaps the Committee should look no further than within the borders of Europe before criticising others.

Myth #3: In Paragraph E, the draft report states that “precious tropical ecosystems, which cover a mere 7% of the Earth’s surface, are under increasing pressure from deforestation and the establishment of palm oil plantations.”

Fact: This is a misrepresentation of absurd proportions. Tropical land represents 31 per cent of ice-free total land surface area – approximately 20 million km2[3]. The total global oil palm cultivated area is approximately is 180,000 km2 – less than 1 per cent of tropical land area, and around 0.1 per cent of total global land area[4]. This compares with cultivated area for soybean (1,170,000km2), rapeseed (357,000 km2) and maize (1,830,000 km2).  In the past ten years, oil palm area has expanded by around 57,000 km2. Soybean has expanded by 251,000 km2; rapeseed has expanded by 80,000 km2. Paddy rice has expanded by around 82,000 km2. The largest long-term factor in deforestation in tropical forests is demographics. The largest pressure on tropical ecosystems has been in Latin American forests, notably Brazil, where the commodity pressures have been from beef and soybean, not Palm Oil.

Myth #4: The expansion of Oil Palm plantations in other developing countries is a bad thing and undermines sustainable development.

Fact: European policy has a dark history in undermining developing countries’ prosperity and development.  This report seeks to perpetuate that dark history. Further, the report is oblivious to the plight of farmers in developing countries. Oil Palm cultivation supports millions of livelihoods across Sub-Saharan Africa and South East Asia and has done so for decades.  In Africa, small farmers produce around 90 per cent of Palm Oil[5]. In Malaysia, 39 per cent of oil palm is from small farmers. Further development and cultivation of oil palm will increase food security, improve rural incomes, and benefit the economies of developing countries in Africa and Asia. These benefits for the global poor appear not to matter to the authors of the European Parliament report.

Myth #5: Palm Oil is the sole reason for declining populations of endangered animals such as the orang-utan. The report states in Paragraph I “the loss of natural habitats in the form of rainforests is endangering the survival of a large number of species”.

Fact: Research clearly shows that Palm Oil is not to blame for species decline. The NGO Traffic highlights that the major threat to tiger populations is poaching[6], not Palm Oil. A Traffic study notes that a hunter can earn around 1.5 times the annual income of a typical rural worker from the capture of a single tiger[7]. Similarly, the reasons for orang-utan deaths are only now being understood, despite campaigners simply blaming ‘Palm Oil’. In a recent study of village populations in Kalimantan, it was noted that more than half the orangutan killings were for meat consumption[8] by the local communities. In Malaysia, recent strategies to preserve orang-utan populations – based on these realities – have succeeded in stabilising animal numbers.  The reality is that Palm Oil doesn’t kill animals or make them extinct. Human population and development does. The past 500 years have seen a range of species extinctions across Europe. The Pyrenean ibex, native to France, went extinct in 2000. The Caspian tiger went extinct as recently as 1975.

Myth #6: Using certification schemes and NGO-developed conservation measures such as Greenpeace’s High Carbon Stock approach will support sustainable development. The report in Paragraph 4 “Calls for companies that cultivate palm oil to use the High Carbon Stock (HCS) approach when developing their plantations.”

Fact: The idea that democratic sovereign countries such as Malaysia should have environmental management standards written in Brussels belongs to a different era. Organisations such as Greenpeace have pushed an agenda to restrict Palm Oil production and procurement that has had a negative impact on small farmers. As a result of Greenpeace’s ‘Zero Deforestation’ policies Unilever admits publicly that it has cut around 80 per cent of its small farmers from its supply chain[9]. Thousands of small farmers will be negatively impacted. Greenpeace, and the European Parliament, are prioritising environmental ideology over the social and economic welfare of people in Africa and Asia.

Myth #7: Palm oil biodiesel is somehow worse than alternative sources of biofuel. The report in Paragraph 16 calls for palm oil biodiesel to banned “by 2020 at the latest”.

Fact: European legislators are more interested in protecting domestic industries in Europe than solving environmental problems or making efficient fuels. Palm oil is by far the most efficient oilseed in the world. Biodiesel from Palm Oil is therefore responsible for using far less land, and far fewer fertilizers and other inputs, compared to any other oilseed crop. The use of Palm Oil for biofuels and biomass has been shown by scientists to be highly beneficial[10] for the EU’s renewable strategy. Advanced biomass is also a major advantage: Palm Oil’s use of POME, used FFB and fronds, have significant benefits as advanced biomass feedstocks[11] that can be beneficial for the EU’s pivot towards advanced biofuels and biomass. The EU’s inefficient, underproductive and overpriced domestic biofuels – primarily rapeseed – are using such scare stories to impose restrictions on Palm Oil exports to Europe. This is an attempt to use myths to prop up failing European industries – in contravention of the facts.

[1] European Commission (2013). The impact of EU consumption on deforestation: Comprehensive analysis of the impact of EU consumption on deforestation. Technical Report 2013-63 http://ec.europa.eu/environment/forests/pdf/1.%20Report%20analysis%20of%20impact.pdf

[2] European Commission (2013). The impact of EU consumption on deforestation: Comprehensive analysis of the impact of EU consumption on deforestation. Technical Report 2013-63 http://ec.europa.eu/environment/forests/pdf/1.%20Report%20analysis%20of%20impact.pdf

[3] Yale School of Forestry. ‘Tropical Zone’ http://globalforestatlas.yale.edu/tropical-zone

[4] FAO (2016). FAOSTAT database collections.  Food and Agriculture Organization of the United Nations. Rome. http://www.fao.org/faostat/en/#data/QC

[5] N. E. Tiku  and F. A. Bullem (2015). Oil palm marketing, Nigeria-lessons to learn from Malaysia experience, opportunities and foreign direct investment in Cross River State. Journal of Development and Agricultural Economics. Vol. 7(7), pp. 243-252, July, 2015. http://www.academicjournals.org/journal/JDAE/article-full-text-pdf/D37218E53800

[6] Chris R. Shepherd and Nolan Magnus (2004). Nowhere To Hide: The Trade In Sumatran Tiger. Traffic Southeast Asia http://static1.1.sqspcdn.com/static/f/157301/2327126/1231159639387/traffic_species_mammals15.pdf?token=yhsJPxUPvcQO71%2FgkehGmHL0rLU%3D

[7] Chris R. Shepherd and Nolan Magnus (2004). Nowhere To Hide: The Trade In Sumatran Tiger. Traffic Southeast Asia http://static1.1.sqspcdn.com/static/f/157301/2327126/1231159639387/traffic_species_mammals15.pdf?token=yhsJPxUPvcQO71%2FgkehGmHL0rLU%3D

[8] Erik Meijaard et al (2011). Quantifying Killing of Orangutans and Human-Orangutan Conflict in Kalimantan, Indonesia. PLOS ONE 7(3)  http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0027491

[9] Fred Pearce (2013). Push for traceable supply chains threatens smallholder farmers. nhttps://wle.cgiar.org/thrive/2013/10/09/push-traceable-supply-chains-threatens-smallholder-farmers

[10] JENA Economic Research (2010): Recalculating Default Values for Palm Oil http://zs.thulb.uni-jena.de/receive/jportal_jparticle_00238509

[11] IOP Science (2013):  Use of Oil Palm Waste as a renewable energy source and its impact on reduction of air pollution in context of Malaysia: http://iopscience.iop.org/article/10.1088/1755-1315/16/1/012026/pdf

The Apology that Oil Palm Growers Need to Hear

NGOs and campaign groups rarely admit that they are wrong. They almost never admit that an industry that they have been campaigning against is right.

But that is effectively what the Union of Concerned Scientists (UCS) – a US-based campaign group – has done in relation to palm oil.

UCS has pointed out that palm oil is not the environmental bogeyman that NGOs have made it out to be. Why? Because it is not a major contributor to global deforestation.

What has tipped UCS over is a report by Climate Focus, written for signatories to the New York Declaration on Forests. It pointed out that commodities such as beef, soybean and maize have a significantly higher deforestation footprint than palm oil. In the case of beef, it’s around 10 times bigger.

Much of this is based on work previously undertaken by the European Commission, which looked at the deforestation footprints of various commodities.

The MPOC has been writing on this topic and pointing out the European Commission data since it was released.

But the mea culpa from UCS has much larger implications for environmental campaigning.

As UCS states: “a recent study indicates that that global corporations that have committed to ending the deforestation they cause, have got their priorities backwards. And it suggests that the NGO community—and that definitely includes me—may have had our priorities wrong too.”

The Climate Focus study points out that palm oil companies have made significantly bigger commitments to zero deforestation than any other commodity group, despite being a much lower contributor to deforestation.

A question for organisations like UCS and the broader NGO and campaigning community is whether this means they will cease their absurd campaign against palm oil and whether they will actually apologise for some of the claims they have made.

A bigger question, though, is the funding associated with NGO campaigns.

The Climate and Land Use Alliance, a coalition of US-based foundations, has funded a wealth of activity aimed at palm oil. A look at their Global Grants list indicates that they have spent more than USD 13 million campaigning on palm oil across 38 funded projects – including USD 3 million for Greenpeace.

Compare this with their spending in the same list on soybean: five projects, totalling USD 2.5 million. And compare this with spending on beef and cattle: USD 759,000. These beef projects weren’t even exclusively beef projects; they looked at different commodities.

A lot of this funding is still ongoing. Greenpeace is in the middle of a USD1 million grant directed at palm oil. So is Rainforest Action Network. Friends of the Earth is in the middle of a USD400,000 grant.

It’s no wonder the campaigning against palm oil and the subsequent commitments have been skewed: there was simply more money thrown at it.

There are also other factors. Where palm oil can be substituted for competing oils, beef cannot be substituted for anything. The largest beef producers in the world are the US and the EU. A campaign against beef is simply not politically tenable in those countries.

In the EU, palm oil can be substituted with competing European oils such as sunflower and rapeseed. Generating an environmental case against palm oil – which is really only grown in two countries that are not major trading partners – is a no-brainer for those industries.

But this isn’t the first time that environmentalists have declared war on a particular industry and got the underlying facts wrong.

During the 1990s and most of the 2000s, campaigners concentrated heavily on the timber industry. There was an assumption that timber demand was leading to global forest loss. This resulted in campaigns against paper products and an entire industry of consultants working on illegal logging policy. But it wasn’t timber demand that was the problem: it was the need to grow food.

There is little downside for NGOs if they are wrong.  Greenpeace claimed for a long time that tropical deforestation was responsible for around 25 per cent of global emissions. The estimate is now much closer to 10 per cent. Greenpeace would no doubt justify this by saying it brought attention to the issue.

But in the case of palm oil, erroneous information has harmed the commodity’s reputation, and impacted the lives of the 3 million small farmers who grow it.

They are the people that need the apology.

Sustainable Palm Oil the Norm? A Loaded Term

The Center for International Forest Research recently asked the question: “What will it take to make sustainable palm oil the norm?”

This is a question that NGOs often ask, and it’s often unqualified.

When NGOs ask, it’s a loaded question. It’s directed at Western companies and Western policymakers. It goes hand in hand with a series of assumptions about oil palm growing and palm oil production.  First is that oil palm growers are a large, homogenous group. Second is that oil palm growers are, for the most part, part of large corporations. Third is that everyone everywhere considers environmental sustainability to be the number-one priority. Fourth is that Western developed markets are the only markets that matter. Fifth is that ‘sustainable’ means all aspects of sustainability – including poverty reduction – are covered.

Anyone who has a basic understanding of palm oil production and palm oil markets knows that none of these assumptions are true.

But there’s such a misunderstanding in the debate over palm oil that Western NGOs have been able to push it in the opposite direction. Consider how NGOs are pushing for tighter, more expensive standards that are completely out of reach for small farmers, and exclude small farmers from supply chains. The most egregious example of this is the ‘zero deforestation’ traceability model. This was the model that resulted in Unilever having to cut 80 per cent of its smallholder suppliers from its supply network.

What this underlines is that most of the NGO arguments around sustainability are simply a string of Western moral arguments about the environment. They have little to do with balancing the perspective or producing strong social and economic outcomes on the ground. Fortunately the CIFOR research bears these fallacies out  – but don’t expect NGOs and campaign groups to be leaping on the findings.

Take this from the report’s executive summary when looking at the uptake of RSPO and ‘zero deforestation’ commitments by major companies:

“… oil palm growers are a diverse group, operating in a range of contexts; this means that current high profile signs of change by large multinational companies may not be representative of the entire sector.”

Or on the importance of sustainability among smallholder growers:

“In regions such as Sumatra with long-established oil palm sectors, the number of independent smallholder farmers is growing rapidly. These smallholders have access to an escalating number of independent mills, which offer competitive pricing opportunities. These mills rely heavily on fresh fruit bunches purchased on the open market and often do not have corporate purchasing policies or checks in place for legality and sustainability concerns.”

And on the importance of Western markets:

“…growers are catering to rapidly growing import markets in China and India, which place much less focus on environmental and social principles, compared to western markets.”

The research also bears out the reluctance by oil palm growers in Indonesia to taking on sustainability commitments and certification standards.

The basic and overarching problem is simple: cost. This is now a generally accepted point in the debate: certification is expensive, and small farmers can’t afford it without assistance from aid agencies or other groups.

Failing that, more NGOs have called for greater RSPO certification. The problem there is that the uptake of RSPO at the demand end is approximately 50 per cent. Why is uptake so low? First, there is almost zero consumer demand (well, maybe in some parts of Europe…). Second, because the demand is not there, there is no premium that can be offered to producers – so there is zero incentive for small farmers to sign up to certification initiatives such as RSPO.

What few people have suggested is that there should be attempts to make certification cheaper. It could be argued that some Western companies are already attempting this via support for small farmer initiatives. But this misses the point; these schemes only serve Western markets.

A Better Way Forward?

There is a better way: national standards.

Malaysian Sustainable Palm Oil (MSPO) is the best example of this. It implements government sustainability policy consistent with broader national sustainability goals.  It is cost-effective because it has to be. These are standards that articulate the balance between social, economic and environmental concerns. One of the key differences between RSPO and conventional international standards is that RSPO is a private body not subjected to legislative checks and balances. RSPO as a body effectively decides who is and isn’t accredited to audit a standard, as well as developing the standard.  That’s not how national standards are formed or work in practice.

Under national and international standards, standards development and accreditation are distinct and separate processes. This is why, for example, a tyre maker can make tyres according to an official standard without having to be a member of a tyre producing body. So, producers don’t have to pay membership fees; they just pay audit fees. It also means that auditors can be competitive without cutting corners, as they need to maintain their credibility via a separate accreditation process.

But one of the reasons NGOs remain wedded to RSPO is that it is weighted towards Western interests.

The CIFOR report states:

“The majority of motions submitted by the growers target the governance of RSPO, generally requesting better representation of their needs. Private sustainability standards, with their origins or leadership in Europe or America, may be perceived as a new manifestation of Western control, as reported by four of our key informants.”

One of the problems with the Western environmental movement is that it has taken on a moral position that is generally fixed. CIFOR’s report on sustainability demonstrates that if it is genuinely interested in improving environmental outcomes, it needs to dispense with the notion that tougher, more expensive standards are always better.  It needs to accept that solutions developed on the ground – such as MSPO – will provide an improvement. And any improvement is better than no improvement.

Priorities for Malaysian Palm Oil

Malaysian Plantation Industries and Commodities Minister, the Hon. Datuk Seri Mah Siew Keong is a veteran of politics. He hails from Perak, one of the top three palm oil-producing states in Peninsular Malaysia and an area with a long history of commodity development. He grew up in his constituency, Teluk Intan, seeing at first-hand the positive impact of palm oil on the livelihood of smallholders. He was appointed to his current portfolio in June. In an interview, he speaks on a range of issues that involve Malaysia’s palm oil industry.

Could you tell our international readers about your political career?

I first entered Parliament in 1999. From 2004-2006, I held the post of Deputy Trade Minister, after which I was the Minister for Agriculture and Agro-based Industry for two years. I left Parliament in 2009. Between 2010 and 2013, I was Chairman of the Malaysian External Trade Development Corporation.

In 2014, I returned to Parliament and was appointed Minister in the Prime Minister’s Department, before becoming the Minister for Plantation Industries and Commodities. So I have experience across the portfolios of both trade and agriculture.

What are your priorities for development of the palm oil industry?

Malaysia will mark its centennial of oil palm planting next year. I want to see to it that the industry expands and becomes more competitive globally, while keeping the empowerment of smallholders at its heart.

To do this, we must first counter unjustified negative and discriminatory perceptions of palm oil in European countries. Efforts must be sustained to engage with these countries, and to reinforce the many beneficial attributes of palm oil. We have to defeat anti-palm oil campaigns to ensure continued market access and to maintain our market share.

Secondly, we will have to move toward new downstream activities for further addition of value. With home-grown natural resources at hand, it will be more cost-competitive to add value to downstream products. Higher demand for palm oil will ultimately deliver more revenue to the country and income to smallholders.

I am confident that these approaches, coupled with relevant incentives, will go a long way towards empowering smallholders and contributing to the economic growth of the country.

How important is the palm oil industry to the Malaysian economy?

The industry’s significance cannot be overstated. It contributes around 8% of the national GDP and more than one-third of agricultural GDP. Palm oil exports are worth RM63.2 billion – or 8.1% of all exports.

Over one-third of the oil palm acreage is planted by more than 300,000 farmers and their families. In total, more than 1 million people are dependent upon smallholder farming. This is an enormous contribution to the well-being and success of these families, their communities, and the nation as a whole.

Over the years, the industry has helped bring down the poverty rate from 50% after Independence to less than 5% today. Some 40% of Malaysia’s oil palm acreage now belongs to small farmers. This is proof that palm oil is truly a commodity that distributes wealth throughout the population, while bringing about social and economic benefits especially in rural areas.

The benefits for Malaysia are clear. Are there advantages from the palm oil trade for importing countries?

There are positive economic impacts for countries choosing to import palm oil. In China, for example, palm oil imports are associated with over 900,000 jobs and up to 59 billion Yuan in GDP benefits. In the European Union, downstream palm oil industries contribute up to 117,000 jobs and up to US$2.9 billion in tax revenue.

These figures, calculated by the London-based consultancy Europe Economics, show how important palm oil is as a global commodity. It is a competitive, low-cost vegetable oil that can be used in food and manufacturing, as evident in the major markets of China and India. This is a win-win situation for both producer countries such as Malaysia and for importing countries.

What are your views on the current debate on the environment, in relation to palm oil production?

Let me first state that Malaysia is a world leader in environmental protection: our commitment to preserve 50% of the country’s land area under forest has been recognised by the United Nations. We have also adopted Good Agricultural Practices, such as the zero-burning policy in clearing stands of old oil palm trees.

Moving forward, the Malaysian palm oil industry is giving greater attention to research in order to increase productivity and the oil extraction rate, rather than rely on expanding the planted acreage. Environmental protection and economic growth are not mutually exclusive: Malaysia has demonstrated this with the oil palm sector.

The global market is large enough for all edible oils to compete in, but the question we need to ask is: are we able to fulfill growing demand as the world population increases? This demand is easily met by the oil palm, as it is the highest yielding oil crop. It produces 4.2 tonnes of oil per hectare in contrast to 0.42 tonnes and 0.36 tonnes per hectare from sunflower and soybean respectively.

Furthermore, the oil palm is a perennial crop. It therefore provides a sustainable and steady supply of palm oil. As the world population increases, the superior productivity of the oil palm is the solution to issues like the scarcity of land and food insecurity. In addition, palm oil has a unique composition of texture, efficiency and nutrition, which has made it popular with companies and consumers across the globe.

Are there opportunities to expand recognition of the Malaysian Sustainable Palm Oil (MSPO) standard and similar national schemes?

Yes, certainly. The MSPO standard was launched last year. It is based on Malaysia’s Good Agricultural Practices for oil palm, as well as domestic laws and regulations, and our international obligations. The Indonesian Sustainable Palm Oil standard was developed by our counterparts in Indonesia. There is potential for recognition of these standards through the ASEAN mechanism.

On a recent visit to Europe, I discussed the MSPO with Members of Parliament and Ministers in different countries. The benefits of the MSPO are of great interest to many of our partners in Europe. It will require a concerted international effort to achieve recognition, but the palm oil industry will gain from this.

Regional cooperation appears to be moving forward with the establishment of the Council of Palm Oil Producing Countries (CPOPC). Where is this headed?

We are working closely with Indonesia on the major areas of operations. This is an important step forward for industry cooperation, since Indonesia and Malaysia are the two largest palm oil producers. We are confident that the CPOPC will be an effective organisation that will communicate the benefits of palm oil globally. For example, a coordinated approach to trade policy can help producer countries to fight discrimination against palm oil.

You have spoken in favour of the Trans-Pacific Partnership Agreement (TPPA). What are the potential opportunities for palm oil from this and other trade agreements?

The TPPA – once it enters into force – will be beneficial to both Malaysia and this region, and not just for palm oil. Other opportunities will emerge from the Malaysia-EU free trade agreement, on which negotiations are resuming. We can work toward increasing opportunities for palm oil, whether through lower tariffs, pulling back non-tariff barriers or obtaining recognition of the MSPO.

Is there still a danger of France implementing a new tax on palm oil?

Yes. One tax proposal was defeated in July, thanks to strong opposition from producer countries and others. But on a visit to France recently, it was clear to me that the danger of a new tax exists. It is important that Malaysia takes a firm stance on this matter: any tax increase, in any form, is unacceptable.

France has formed a commission to review the sustainability of palm oil. Malaysia will oppose any attempt to set arbitrary sustainability criteria. We must stand ready to respond should countries impose discriminatory taxes or criteria against palm oil, as it is our key export.

In which regions do you see improved prospects for marketing palm oil?

China and India are still incredibly large export markets. The vegetable oil market in both countries remains fiercely competitive, particularly in China where there is often substitution with other oils. I do, however, think we have the opportunity to generate stronger investment and export ties with both countries when it comes to palm oil.

Africa is the other region of interest. Its countries are becoming increasingly urbanised and vegetable oil demand is rising. There are encouraging prospects for exports, as well as investment in palm oil. We have the experience and know-how to make these opportunities work.