Malaysia initiates legal action against EU following anti-palm oil campaign

MPIC, with the cooperation of the Attorney General’s Chambers and the International Trade and Industry Ministry, yesterday filed a request for consultations under the World Trade Organisation’s (WTO) Dispute Settlement Mechanism (DSM).

“This legal action demonstrates the government’s seriousness in safeguarding the country’s palm oil industry against the policy implemented by the EU.

“Malaysia hopes that the WTO, through its Dispute Settlement Body, would study and consider Malaysia’s arguments and explanation in a fair and equitable manner in accordance with the WTO’s legal principles,” MPIC minister Datuk Dr Mohd Khairuddin Aman Razali said in a statement.

He said the legal action resulted from measures taken by the EU and its member states in relation to the implementation of the Delegated Regulation of the EU Renewable Energy Directive II (RED II) which was impacting the country’s palm oil industry.

Mond Khairuddin said Malaysia would give its full commitment and cooperation in the WTO process especially in the consultative sessions and ensuing discussions with the WTO panel to be established.

“At the same time, Malaysia will continue to act as the third party in the legal action filed by Indonesia (Case no DS 593: European Union -- Certain measures concerning palm oil and oil palm crop-based biofuels) via DSM at WTO,” he said.

According to him, Malaysia has undertaken various measures, including organising economic and technical missions to Europe and providing feedback on the EU RED II’s implementation.

Nonetheless, the EU continued the implementation of EU RED II without taking into consideration Malaysia’s commitment and views, he said.

The EU RED II’s implementation has classified palm oil as having a high risk of indirect land use change (ILUC).

“This will cause the usage of palm oil for biofuels in the EU to be excluded from the renewable energy target and thus create an unreasonable trade barrier against the country’s palm oil industry.

“The EU’s action also goes against the free trade practice principles outlined by the WTO,” he said.