The Oil Palm Newsletter, April 2011

A Look Back At Issues Affecting Malaysian Palm Oil

In the face of ongoing challenges, trade barriers and campaigns by environmental NGOs, Malaysian palm oil continues to lead.

Look no further than The Federal Land Development Authority (FELDA) – an organization comprising Malaysia’s small farmers.  FELDA recently announced that it has achieved certification under the International Sustainability and Carbon Certification (ISCC), making it one of the first producers of biofuels to meet stringent, and as many would say, the discriminatory sustainability targets set by the European Union under the Renewable Energy Directive for biofuel production.  This is yet another demonstration of the sustainability of palm oil, the sustainability of the world’s largest plantation operator and the thousands of small holders who supply FELDA mills and refineries.  FELDA’s ISCC certification has also been achieved by Malaysian palm oil producer IOI.

This accomplishment speaks to the environmental leadership of the Malaysian palm oil industry and commitment to help small farmers with upward mobility and societal advancement.  This view is now gaining unlikely supporters.

In an official visit by a group of EU Ambassadors to the State of Sabah, Vincent Piket, Head of the European Union Delegation to Malaysia acknowledged the environmental leadership of the palm oil industry.

Yet, despite all of these accomplishments the palm oil industry continues to face strong criticism from the EU whether from ENGOs that are financed by the European Commission, attempts to unfairly label palm oil to the protectionist and discriminatory Renewable Energy Directive (RED) that favours domestic European biofuels.  Recently, EU Trade Commissioner Karel de Gucht denied that Europe is supporting the ENGOs campaign against palm oil commenting that while the EU does not support ENGOs to run anti-palm oil campaigns, the EU also does not restrict them, either.  European research has quantified that up to 70 percent of certain NGOs funding is directly from the EU.  Further, De Gucht while on a stop to Malaysia stated that negotiations for an EU-Malaysia Free Trade Agreement would require the inclusion of a “sustainability chapter” to address the import of palm oil into the region; he also stated that “we expect countries to respect our requirements”.  This notion is all the more disconcerting considering that palm oil requires only 0.26 hectares of land to produce one tonne of oil while European-grown rapeseed requires 1.52 hectares to produce the same amount. In short, the facts are the facts – palm oil is far more sustainable than its European competitor.

Furthermore, in Brussels this week, the European Parliament’s Environment, Public Health and Food Safety Committee voted on a second revision of a regulation aimed at providing better health information to consumers. During the vote MEPs adopted a provision to label the origin of vegetable oils. Why? Because they believe consumers have the right to make choices based on perceived environmental considerations. The amendment is squarely aimed at the palm oil industry and is being pushed by ENGOs and the European Zoos Association. Despite having little support – neither the Commission or the Council or the report’s author support the measure – a number of zealous Green and Socialist MEPs have been able to keep the measure on the table. This is yet another example of the NGO position steering EU decisions that are opaque in the harm they will do to business in Europe and the developing world. Negotiations will continue.

In Australia, a similar measure is being advanced in the Australian Senate, the Truth in Labelling – Palm Oil Bill of 2010. Advanced by select members of the Green Party and supported by a number of NGO-aligned Australian zoos, the legislation would require the specific labeling of palm oil, exposing businesses to scurrilous NGO pressure campaigns. In fact, hearings were recently held in Canberra and Melbourne exploring the implications and merits of the legislation, where MPOC testified along with the Australian Food and Grocery Council, WWF, and Food Standards Australia and New Zealand.  Members of MPOC’s Board were able defend Malaysian palm producers and refute the allegations made by supporters of the legislation, while members of Australia’s business community explained how costly such a regulation would be to Australian businesses and consumers.

Finally, Wetlands International weighed into the palm oil debate with an analysis by SarVision, funded by the Dutch Environment Ministry. The report criticized palm oil development in Sarawak, claiming dramatic rates of deforestation.  In a response, the Sarawak Oil Palm Plantation Owners Association (SOPPOA) recognised the growth of oil palm plantations on peat, which was in reality dramatically lower than the rate claimed by Wetlands International.  In truth, Sarawak has 85 percent of its land under forest cover versus The Netherlands, which maintains 10.8 percent forest cover.

Malaysian palm oil continues to address the challenges as shown in recent months with the EU’s biofuel imports legislation and government funding of ENGO campaigns against palm oil.  Malaysian palm oil is leading the way forward.

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Written by The Oil Palm