Malaysia raises concerns over continual changes on sustainable palm oil

Citing an example, director-general Datuk Ahmad Parveez Ghulam Kadir said as for the Indonesia-European Free Trade Association issue, Indonesia is using the Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability and Carbon Certification (ISCC) as its benchmarks, for which both are using more advanced standards that are constantly revised, especially RSPO.

RSPO and ISCC are the benchmark set by the European Union (EU).

"The newer standard, which also includes the Malaysian Palm Oil Sustainable (MSPO) certification, will not be able to reach the same level, as once reached, RSPO will be changed again and become more stringent.

"It's not fair to use the standard as a benchmark. Also as RSPO is for business to business and requires membership fees annually and a higher cost of auditing, it's very difficult for RSPO to get smallholders on board, and seen now a very small percentage of smallholders certified RSPO," he said.

In addition, he said the continual changing of RSPO standards and compliance requirements would make it becoming more expensive from time to time and making it a sustainable standard which is non-sustainable as it will make palm oil lose it price competitiveness in the long run.

Ahmad Parveez on Monday presented his views at a hybrid forum titled: "Trade Agreements and Product Demands" which was jointly organised by the World Trade Institute (WTI) based in Bern, Switzerland; Institute of Malaysian & International Studies (IKMAS, UKM); and the MPOB-UKM Endowment Chair.

"Developed countries also need to recognise national standards such as MSPO as currently there is no indication that these standards are being recognised by them as they keep on referring to the more advanced and stringent standards.

"They need to be more open-minded to look and appreciate other contributions, especially during negotiations," he said.

Ahmad Parveez urged the EU not only focusing on deforestation but also looking at the other efforts that the industry here is doing that need to be recognised, especially on other aspect of sustainability and preserving the land bank.

"As our commitment towards sustainability, Malaysia has voluntarily agreed to cut the greenhouse gas emission intensity by 45 per cent by 2030 and is focusing on improving productivity and yield, rather than expanding land," he said.

He noted that Malaysia has reiterated its commitment made at the Rio Summit in 1992 to retain at least 50 per cent of the land areas under forest cover. The area under forest cover in Malaysia was 58.3 per cent in 2019.

With 3.16 tonnes production per hectare, palm oil only utilises 23.45 million hectares of land (in Malaysia and Indonesia combined), compared with 0.45 tonnes production per hectare of soybean oil from 129.15 million hectares of land (Brazil, Argentina, the United States combined), 0.78 tonnes of rapeseed oil from 32.47 million hectares of land (China, Canada, the EU combined) and 0.76 tonnes of sunflower oil from 28.1 million hectares of land (the EU, Russia, Ukraine combined).

He expressed hope that the new revised MSPO 2.0 standards and other compliances of relevant national and international laws with regards to sustainability, product standards and social wellbeing would help Malaysia to gain greater market access with bigger opportunities and global acceptance.

Collectively, there are nearly four million oil palm smallholder farmers in Indonesia and Malaysia, including temporarily-contracted migrants from the wider Asia's region.

For many decades, the industry has helped lift millions of people out of poverty.

At the national level, the palm oil industry contributes between 2.0 per cent and 4.0 per cent of Indonesia's and Malaysia's gross domestic product, respectively, making the sector a government priority in contributing to sustainable development.

Meanwhile, Malaysian Palm Oil Council Science (MPOC) environment and sustainability division director Dr Ruslan Abdullah observed that some countries have already turned back to palm oil and have accepted some standard set by MSPO as they realised that business is becoming more difficult, especially due to the war in Ukraine.

"Some countries are rather less strict on sourcing the certified sustainable palm oil, so long they can get the product easily.

"My advice for the palm oil-producing countries is to work together rather than distance themselves, which will not solve the problem faced by the industry," he said.

Ambassador Markus Schlagenhof, head of the World Trade Division at the Swiss State Secretariat for Economic Affairs, said there will be some initiatives to be made and implementation following the pledge made by 143 governments at the UN Climate Change Conference (COP26) held in Glasgow last year to halt and reverse forest loss by 2030.

"We have to step up our support and continue to work together to make it work," he said.

Southeast Asian countries, Indonesia, Malaysia and Thailand are the largest producers of palm oil in the world. Indonesia and Malaysia contribute nearly 80 per cent of the global palm oil production.

Being exported to markets worldwide, the European countries import roughly 8.2 million tonnes from Indonesia, Malaysia and Thailand.

Palm oil and its derivatives are used in a wide range of food and consumer products -- from biscuits and chocolates, to soaps and cosmetic products.

In Europe, palm oil is also used as biofuel for the transportation sector.

However, the past years saw growing criticism on the allegedly negative impacts of palm oil, often been associated with land expansion and clearance, deforestation and endangered wildlife.

More recently, there have been discussions on labour rights violations, including forced and child labour involving migrants and plantation workers in Malaysia and Indonesia.

The forum brings together regulators, industry, civil society and the scientific community to reflect the everyday realities -- challenges and opportunities, in all its facets from a sustainable development perspective, and to provide a critical but constructive avenue to exchange views and aspiration.