The Oil Palm

In an opinion editorial featured in The Star, Belgian agronomist Pierre Bois d’Enghien writes about this week’s visit of French President Francois Hollande to Malaysia – and why the President should guarantee that Palm Oil will not be taxed in France.

The Star: A Message to President Hollande: Support Palm Oil

By Pierre Bois d’Enghien

‘Francois Hollande’s visit to Malaysia is important for French business: according to French media reports, there are hopes of defence contracts being signed. Alongside such French priorities, the President should be asked to recognize the Malaysian priority of Palm Oil.

‘First, he should support G2G initiatives. President Hollande should announce that the French Government will provide technical and financial support to helping develop and strengthen MSPO, the Malaysian Government’s standard.

‘Second, President Hollande should commit that France will not tax palm oil. In 2013, former Prime Minister and now Foreign Affairs Minister Jean-Marc Ayrault promised that France would not tax palm oil, and that promise needs to be re-stated by President Hollande.

‘Third, President Hollande should recognise the achievements Malaysia has made in terms of environmental management and sustainable commodities. These would be the actions of a true friend; it remains to be seen if France will agree.’

Read the full opinion editorial here: A Message to President Hollande: Support Palm Oil

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 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

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.