The Oil Palm The Oil Palm

This Week EU Experts Visit Malaysia: What’s at Stake?

Today, an EU Expert Group will arrive in Malaysia to begin a ‘fact-finding’ mission about Palm Oil. The European delegation will be led by Paula Abreu Marques, Head of Unit for Renewable Energy in the EU Commission’s Energy Directorate, and is expected to include EU technocrats dealing with environment, energy, and agriculture. The delegation is planning to visit oil palm plantations, and to conduct meetings with Malaysian leaders of government, businesses, and NGOs. The stated intention is to gather information to help inform the EU’s forthcoming decision on which biofuels are ‘risky’.

There is one question, above all, that matters: is this visit just for show or is it a serious fact-finding mission? Concerns amongst Palm Oil producing countries run deep. The EU Parliament has stated many times, publicly, its desire to ban Palm Oil biofuels from Europe. Its members have stated publicly that they see this ILUC/HCS/Deforestation Criteria process – the process including this week’s visit – as the path to achieving their objective of banning Palm Oil biofuels.

According to Reuters: “Green lawmaker Bas Eickhout, one of the negotiators in tough talks that ran until the early morning, said the use of palm oil would be capped at 2019 levels until 2023 and reduced to zero by 2030 [as a result of the ILUC/HCS/Deforestation criteria process]. That is quite a victory …’ said Eickhout”.

Furthermore, the EU Ambassador to Indonesia and Brunei Darussalam Mr. Vincent Guérend said recently “Provided the country succeeds in ensuring sustainable palm oil supply chains, we would be willing to reconsider the commodity’s eligibility in the EU market after 2030.”

In other words, has the political decision already been taken in Brussels to classify Palm Oil as ‘risky’?  If so, the Expert Group, and the fact-finding visit, would then appear to be part of such a ‘just for show’ process. The ultimate regulatory vehicle for this process appears to be new ‘Deforestation Criteria’ in which Brussels would count both ILUC and HCS factors as well as specific new elements that would discriminate against Palm Oil – but would not harm rapeseed or sunflower that hail from Europe. The justification – that deforestation in Europe happened so long ago that we shouldn’t count it, but Africa and Asia should be punished for any agricultural development – will be highly unpopular across the developing world.

The EU is aware of the skepticism in producing countries. The EU Ambassador to Malaysia, Maria Castillo Fernandez, released a highly defensive statement that revealed the EU’s true intentions.

Ambassador Castillo Fernandez claimed that in relation to EU biofuels policy “Everything is still open” and that in terms of a ban or restriction “… it can be any crop. But it’s better for the [EU officials] who are going to work on this to come and see for themselves”. Ambassador Castillo Fernandez failed to mention that no other crop has been singled out by the EU for discriminatory treatment time and time again. No other crop was the subject of an attempted blanket ban this year. And no EU Expert Panel is currently visiting France, or Belgium, or Italy, to inspect rapeseed and sunflower crops. Is everything really still “open”? Is it really “any crop”, or is the EU focused on only Palm Oil?

Looking ahead to February 2019, it is important to place this week’s visit in context. Some of the delegation no doubt have a genuine interest in the science and study of biofuels, and will use the meetings and site visits to learn more about Palm Oil. However, the reality is that the individuals travelling to Malaysia this week are not the final decision-makers. The decision will be made by the EU’s political institutions.

In the past 18 months alone, the EU Parliament has 9 times voted to ban or restrict Palm Oil exports to Europe. It was only a major campaign led by Malaysia that prevented the EU Parliament from banning Palm Oil biofuels altogether in July 2018. It’s worth noting that a protest in front of Ambassador Castillo Fernandez’s embassy in Kuala Lumpur – by thousands of Malaysian small farmers – was the catalyst for defeating the proposed EU ban.

How could the EU convince Malaysians that the ILUC/HCS/Deforestation Criteria process is genuine – and not part of a pre-ordained effort to ban Palm Oil?

The obvious answer is a public statement committing to no EU restrictions against Palm Oil. This is not an outlandish idea. In fact, this was the approach taken by the French Government in recent years. Then-Prime Minister, Jean-Marc Ayrault announced in 2013 that France would not discriminate against Palm Oil imports; Deputy Defence Minister Florence Parly confirmed this in 2018.

Such a public statement would also be the right economic approach to its trading relationship with partners in south-east Asia. A report commissioned by MPOC from the esteemed Danish consultancy Copenhagen Economics showed that the EU exported over 39 billion EUR of goods and services in 2017, to three leading Palm Oil producing countries (Indonesia, Malaysia & Thailand). The report demonstrates that major aerospace, automobile, electronics, pharmaceutical and food industries across Europe depend upon exports to this Palm Oil producing region.

Will there be a public statement this week, to reassure Palm Oil producing countries? Let’s see. If the EU is serious about not harming Palm Oil biofuel exports then it needs to say so clearly, and publicly. This week is the perfect opportunity.

The Oil Palm The Oil Palm

French Government Spokesperson Claims Support for anti-Palm Oil Campaign

France has had a busy political week. French President Emmanuel Macron unveiled his new cabinet team following a third reshuffle of his Government since he took office back in May 2017. This included the appointment of Ms. Emmanuelle Wargon as Deputy Environment Minister.

Ms. Wargon – among her many other qualifications – is the former Director of Public Affairs at Danone, France’s leading Food company. During her time at Danone, Ms Wargon spoke about the importance and benefits of Palm Oil for consumers in France and across Europe.

Sadly, this one statement – which is based on sound scientific understanding and a solid evidential base – has drawn the ire of French opponents of Palm Oil. Some environmental NGOs, and anti-Palm Oil politicians have criticized the appointment of Ms Wargon, and engaged in a campaign to pressure her to recant her balanced view on Palm Oil. Corinne Lepage – the former Member of European Parliament and long-time anti-Palm Oil campaigner – has led the protests.

Instead of defending the new Minister’s well-established scientific and industrial credentials, French Government Spokesperson Benjamin Griveaux publicly stated that the “fight against Palm Oil will be the roadmap” for Ms Wargon. The statement, escalating significantly the controversy, was unnecessary and undignified.

This statement by the French Spokesperson also comes at an odd time, following France’s recent position that it was against a ban on Palm Oil biofuels as recently as June 2018, during the EU Renewable Energy Directive (RED) negotiations.

There is a question as to whether Mr Griveaux’s statement means a full-throated change of policy towards Palm Oil in France.

But first, a key question is why was the French Government previously supportive of Palm Oil?

One key reason is trade. Let’s remind Mr. Griveaux about the mutual beneficial trading relationship between Malaysia and France:

According to a report by the economic consultancy Copenhagen Economics, French exports to Palm Oil producing countries (Malaysia, Thailand, Indonesia) represents 6 billion EUR of goods & services every year.

This includes more than 3 billion EUR of French exports of aircraft and aerospace (including Airbus and Rafale), and over 150m EUR of food & wine products exported to Malaysia, Indonesia and Thailand. Pharmaceuticals, electronics and automobiles are also significant French exports to the top three Palm Oil producing countries. All of these exports create jobs, and sustain economic growth in France. Just like Palm Oil creates jobs and sustains economic growth in South-East Asia. The trade is mutually beneficial.

There is a historical element to this issue. In 2012, the French Senate attempted (and failed) to impose a ‘Nutella Tax’ on Palm Oil. Since then, successive French Governments have stated that they were against any discrimination against Palm Oil. Former Prime Minister, Jean-Marc Ayrault announced in 2013 that France would not discriminate against Palm Oil imports and Deputy Defence Minister Florence Parly confirmed this in 2018. France opposed the planned EU ban on Palm Oil biofuels as recently as July this year.

The Malaysian Government has repeatedly stated that it would not tolerate any discriminatory actions against Palm Oil. Indonesia as well. Indonesian President Joko Widodo informed the EU (and France) not to discriminate against Palm Oil. Indonesian Vice President Jusuf Kalla confirmed that the Indonesian Government would retaliate against any anti-Palm Oil actions in Europe, highlighting that Indonesia’s two biggest airlines were both buyers of aircraft from France-based aeronautical company Airbus and that they might turn to Airbus’s competitor.

Indonesian Trade Minister Enggartiasto Lukita told the media that if France and the EU would denigrate Palm Oil, then Indonesia should “limit wine imports from France”.

Does the statement from Mr Girveaux mean a radical change of French policy on Palm Oil, and potentially a return to the bad old days? Or will others in the Government instead prevail and choose the continued strong trade and diplomatic relationship with ASEAN countries? It is to be hoped that it is the latter, and that the mutual respect for each other’s export products (including Palm Oil) can continue.

The Oil Palm The Oil Palm

ILUC: Who is in Favour and Why?

In our previous blog, the Oil Palm looked into the ongoing preparations from the European Commission to determine which biofuels are “risky”, and therefore should be restricted. Indirect Land Use Change (ILUC) criteria as well as High Carbon Stock (HCS) will be part of the calculation that determines which biofuels are “risky”. But that is not all.

The European Commission has raised concerns about the use of ILUC: this stems from the previous attempts to introduce ILUC into EU biofuels policy, when experts in the European Commission understood that ILUC simply was not reliable enough to be used as a basis for regulation. This is the diplomatic description: less diplomatic would be to describe it bluntly as junk science.

ILUC is not only a problem for Palm Oil: the domestic European oilseed industry has some reticence about it as well. Rapeseed biofuels do not come out well from GHG emissions calculations, including those related to ILUC.

The European Commission knows that using those criteria would not be sufficient to justify discrimination against Palm Oil (which is the ultimate political objective for the EU, clearly stated by Members of the European Parliament). The ruse to square this circle is the “Deforestation Criteria”.

The “Deforestation Criteria” is the real danger to Palm Oil, and this is how the EU will bring in the new disguised ban on Palm Oil.

Who is in favour of this approach? NGOs remain strongly supportive of ILUC; European industry remains opposed. European groups that are quasi supporters of Palm Oil are supportive. As indicated above, the European Commission is rethinking its position on ILUC as it doesn’t want to harm its domestic oilseed producers and biofuel industry.

Can everyone, then, agree on the “Deforestation Criteria”? The European Commission Directorate General for Energy, who oversaw the negotiations of the Renewable Energy Directive, has the lead in working on the “Deforestation Criteria”. It will very likely receive input from the Directorate General for Environment, that has been pressured in the last couple of months by Members of the European Parliament, to regulate Palm Oil.

Since 2017, the European Parliament voted 9 times against Palm Oil, on various reports and regulations such as the own initiative report on Palm Oil and Deforestation by Communist MEP Katerina Konecna, and the report by Green MEP Heidi Hautala on Forests.

Green MEP Bas Eickhout and others, vigorously fought to have the Palm Oil ban be part of the final RED text, only to see the Commission and Council withdraw it from the final text in June 2018. The political objective of MEPs is simple: to ban Palm Oil from Europe. If ILUC achieves this, they will support it. If ILUC is replaced by “Deforestation Criteria”, they will support that too, as long as it achieves their political objective.

EU Member States are divided. For example, France, a major rapeseed producer but also an important trade partner for Malaysia, positioned itself against the Palm Oil biofuels ban during the RED Trilogue negotiations. France would surely oppose ILUC (to protect its own farmers) – but would they risk angering Malaysia and Indonesia by supporting the “Deforestation Criteria”? Other large countries, notably Italy and Spain, face similar questions.

Central and Eastern European Member States – mainly Hungary and Poland – are supported by a strong and well-funded rapeseed industry lobbying, and were supportive of the Palm Oil ban. There is little doubt that they will push for an anti-Palm Oil “Deforestation Criteria” (but, once again, they are unlikely to support outright ILUC factors that could harm their own biofuel industries).

Domestic rapeseed industries across Europe are following the ILUC/HCS debate with strong interest. They know that any ILUC/HCS criteria imposed upon them could be detrimental to their declining market relevance. In the alternative, ILUC/HCS criteria imposed on the Palm Oil industry is their saving grace.

So, is anyone still lobbying hard for ILUC? Brussels based Green NGO Transport & Environment (T&E) has long been lobbying the European Parliament to ban Palm Oil. The radical NGO launched a campaign before the revision of the RED calling the EU to act against Palm Oil based biofuels, and is one of several NGOs to have long supported ILUC. They are likely to once again set themselves up as the centre of the anti-Palm Oil civil society lobby in Brussels. Pro-ILUC, but also pro”Deforestation Criteria”.

How will the process work? The Commission is to work on a Delegated Act that will set the criteria aimed at determining which biofuels are “risky”. The Commission is evaluating how to leverage ILUC/HCS calculations within this Delegated Act: and what would be the parameters and methodology of any “Deforestation Criteria”. This process is done behind closed doors, but reportedly, an Expert Committee – led by Christian Leffler, Deputy Secretary-General of the European External Action Service (EEAS) and invitations were sent out to both Malaysia and Indonesia to take part in it. Delegates from the EU are set to travel the week of 22 October to Malaysia.  It remains to be seen whether this is a serious committee, or just more European political trickery aimed at hoodwinking the Palm Oil producing countries into ceasing and desisting any campaigning against the “Deforestation Criteria”.

Malaysian Minister of Primary Industries Ms. Teresa Kok was recently in Brussels to meet with officials and declared in a recent interview that “the whole policy on ILUC is very damaging to our palm oil sector”.

This follows a statement by the Council of Palm Oil Producing Countries (CPOPC) warning Europe about this approach and noting that “while CPOPC considers that the scientific community of palm oil producing countries should engage with the Commission, the Governments in the developing world should be fearful of being drawn into acknowledging, accepting or offering legitimacy to the ILUC scheme within the RED II”.

This leaves the European Commission with 5 months to prepare the text of the “Deforestation Criteria”. How will it integrate ILUC/HCS – given that even the Commission knows that these approaches are effectively “junk science”? Perhaps ILUC will become less prominent, and perhaps there is now a strong movement amongst the various European opponents of Palm Oil – that the “Deforestation Criteria” is the best way for them to honour the Parliament’s stated political objective of banning Palm Oil biofuels from Europe.

The Oil Palm The Oil Palm

ICYMI: Malaysia Government Says EU’s Approach to Palm Oil ‘Very Unfair’

Malaysia’s Primary Industries Minister Ms Teresa Kok has made clear to the EU in a Politico Europe article published this week that any attempt to implement protectionist trade policies that effectively single out Palm Oil, and favour noncompetitive European oilseeds, will not be tolerated by the Malaysian Government.

Any attempt to impose restrictions on Palm Oil biofuels, or to classify Palm Oil as ‘risky’ is a de facto ban, a message Primary Industries Minister Ms Teresa Kok made clear to Politico Europe during an interview.

“Brussels — always wary of international trade sanctions — made clear that the measure will not single out palm oil and that EU crops such as rapeseed will also fall under the new rules. Kok told POLITICO she wasn’t buying it, however, and argued the policy is a thinly veiled attack on palm oil”

 “The whole policy on ILUC is very damaging to our palm oil sector,” Kok said. “We see obstacle after obstacle with palm oil and, of course, as producing countries, we think this is a kind of discrimination against our commodity — and it is very unfair.”

The Politico Europe article also highlights the comparison between Europe’s poor record on forest protection, and Malaysia’s high forest area percentage:

Earlier this month, Malaysia and Indonesia said that ILUC’s targeting of palm oil would constitute a trade barrier under World Trade Organization rules and that, what’s more, the coming criteria should “take into account the historical impact of mass deforestation in Europe.”

According to the latest United Nations FAO statistics, Malaysian forest area is growing and covers 56 per cent of Malaysia’s land area. Europe’s forest land, on the other hand, covers only about 35 per cent. Malaysia will not tolerate or be subject to the EU’s hypocrisy.

Politico Europe also highlighted that previous attempts by the EU to discriminate against Palm Oil biofuels have been met with clear signals that European exports to Southeast Asia would be severely impacted if the EU were to start such a trade dispute over Palm Oil.

Read the Politico Europe article in its entirety, here.

The Oil Palm The Oil Palm

ICYMI: Malaysia’s Swiss Message: No Trade Agreement without Palm Oil

In a visit to Switzerland this week by Malaysian Minister of Primary Industries Ms Teresa Kok, the Minister reminded the Swiss Government and other stakeholders, including the Head of the Federal Department of Economic Affairs, Education and Research Mr Johann Schneider-Ammann, that Malaysia will not tolerate nor consider Palm Oil being discriminated against in the Free Trade Agreement negotiations between Malaysia and Switzerland.

Minister Kok’s comments were highlighted in the leading French speaking Swiss newspaper, Le Temps:

“Palm oil should not be seen as a threat… the Minister says that there is still 55% of Malaysia’s land area under forest cover, a goal Malaysia had set and must now maintain.”

Malaysia has been recognized as a world leader in forest conservation. As indicated by Minister Kok, Malaysia exceeds its commitment of 50%, made at the Rio Earth Summit.

“Palm oil should not be seen as a threat,” says Teresa Kok, who emphasizes the willingness of the newly formed government to get off to a good start. It aims to certify its entire supply chain by the end of 2019.”

 On the Malaysia-Switzerland FTA: “Only then can an agreement be considered. One thing is clear: Minister Teresa Kok does not want it if it excludes palm oil.”

The article may be viewed in its original formatting and entirety, here.

The Oil Palm The Oil Palm

ICYMI: Palm Oil Producing Countries Unite in Opposition to EU Biofuels Policy

The Council of Palm Oil Producing Countries (CPOPC) released a statement outlining its clear opposition to the EU’s proposed action that could define Palm Oil biofuels as risky based on supposed scientific calculations known as Indirect Land-Use Change (ILUC) and High Carbon Stock (HCS).

The CPOPC states: “CPOPC is of the view that the use of ILUC to target palm oil would represent a basic violation of the non-discriminatory principles upon which the WTO multilateral system is based; and that any related EU regulation or decision would likely constitute a Technical Barrier to Trade.”

The question for Palm Oil producing countries represented, including Malaysia and Colombia, is how to respond to the EU’s discriminatory approach on ILUC. The CPOPC statement issues a strong and unequivocal position on this crucial question stating, “While CPOPC considers that the scientific community of palm oil producing countries should engage with the Commission, the Governments in the developing world should be fearful of being drawn into acknowledging, accepting or offering legitimacy to the ILUC scheme within the RED II.”

In other words, the EU’s process currently underway and active participation in that process by Palm Oil producing countries would provide the EU’s process with the legitimacy that it does not deserve, and the science does not support.

The CPOPC statement is reminiscent of recent strong positions taken by Malaysia and others – such as the strong response to the EU’s Palm Oil ban in 2017/18 or the strong response to the French Tax in 2015. These two campaigns were successful for Malaysia, which demonstrates that CPOPC’s approach is based on past success of how to defeat threats in Europe.

The full CPOPC statement may be viewed here.

The Oil Palm The Oil Palm

ILUC: Europe Tries for Round Three

The European Commission is now underway with preparations for the latest instalment of the saga surrounding Indirect Land Use Change (ILUC) criteria. This time, ILUC is only one part of a wider EU attempt to classify all biofuels, including Palm Oil, according to new ‘risk’ criteria. This will mean some biofuels being classed as “high-risk”, and must be restricted. An immediate freeze would be instituted, followed by a gradual phase-out. Non “high risk” biofuels will be unaffected. Several European Ambassadors have already alluded to the fact earlier this summer, that this new methodology will target Palm Oil – indeed it is a not-very-subtle attempt to introduce a stealth ban on Palm Oil biofuels.

How does ILUC fit into this? ILUC will be one of two primary criteria – the other is High Carbon Stock (HCS) – that the Commission will use to determine what counts as ‘high risk’. The problem for the Commission is that, on ILUC, everyone has seen this movie before. And it doesn’t end well.

In 2013 and 2015, efforts to incorporate ILUC criteria in to the Renewable Energy Directive (RED) were spearheaded and supported by European Greens and NGOs alike. This was a deliberate attempt first introduced by French MEP Corinne Lepage to make it more difficult (or impossible) to export Palm Oil biodiesel to Europe. During the aggressive lobbying effort, Lepage came forward and openly stated Palm Oil would be a main target. This time around, European tactics are expected to be a little less obvious, but with the end objective no different.

This all comes after this summer’s failed attempt by the European Parliament to include a ban on Palm Oil used as biofuels as part of the latest RED revision text. This motion was ultimately defeated and all discriminatory language towards Palm Oil was removed.

Eager to reach a solution – though discriminatory in nature – the Commission will plan the new ILUC and HCS methodology and criteria in the hope of giving victory to the uncompetitive EU oilseeds industry, and the anti-Palm Oil NGOs: both of whom have long hankered after a ban on Palm Oil biofuels.

The core problem is the following: the direct ban on Palm Oil was defeated because it a) is against WTO rules, and probably EU single market laws as well; and b) it would have negatively impacted trade between the EU and fast-growing ASEAN markets. Therefore, any stealth ban has to avoid these two pitfalls. ILUC, though, is so obtuse that – while some may claim it avoids the above pitfalls – it simply cannot be relied upon at all as a basis for sounds regulation.

Among the many problems associated with ILUC methodology is that it has proven time and time again to be unworkable and not based on scientific fact. This is a red flag that has been repeatedly raised by many independent economists, academics, scientists, think-tanks, energy experts, and many more.

In fact, the current ILUC methodology is so insubstantial and implausible academic bodies were compiling their own research that lined up to criticize the situation. Professors Uwe Lahl and Bjorn Pieprzyk found in their own analysis that “the currently used and developed regulation instruments in Europe and the USA are highly speculative and doubtful”.

Likewise, Gernot Pehnelt, Chair of Economic Policy at the Friedrich-Schiller-University of Jena, decided it best to recalculate the default value for Palm Oil, “given the remarkable difference between the calculation of carbon reduction performance of palm oil based biofuel by the EU and a range of scientific studies.” Unsurprisingly, Pehnelt found not only that “the [ILUC methodology] process has been severely lacking in full disclosure of metrics used to achieve the values contained in the Renewable Energy Directive” but concluded “reliability of the Directive to support the EU’s low-carbon ambitions is being undermined, exposing the EU and Commission to charges of trade discrimination and limiting the ability of Member States to achieve their legally binding GHG emission reductions.”

Standing ILUC methodology and criteria standards do not account for the fact that Malaysian land conservation efforts are nationally recognized as a top contender when compared to many developed nations. This was proven by European research consultancy firm Copenhagen Economics.

Furthermore, the agency found that the Commission was treating Palm Oil unfairly, in terms of carbon emissions, in comparison to other oil crop seeds. What was made evident here, was Europe’s transparent attempt to favour its own “home-grown” crop seed for use and export/importation, while discriminating against Malaysian Palm Oil imports. This is clear trade protectionism, and a violation of international trade law set forth by the World Trade Organisation (WTO), which forbids the use of arbitrary “sustainability criteria”. Noted by Fredrik Erixon, the Director of the European Centre for International Political Economy (ECIPE), the desired Palm Oil restriction in the market place would “not hold up in a WTO dispute-settlement case”.

Unfortunately, there will be some who wish to engage with such methodology anyway – in an attempt to prove that one feedstock or another is actually “low risk” according to the EU’s dodgy new methodology. This legitimizes an illegitimate policy proposal and overlooks one key criteria: this “high risk” approach – this whole exercise in Brussels – is not scientific. It is political. It is not about a process, or a methodology, or making calculations. It is about reaching one specific, well-defined end-point: restricting Palm Oil biofuels in Europe. This is not a secret. It is clearly set out by the EU Parliament in their demands and messages in the Trilogue process (which is what led us to this ‘high risk’ issue in the first place). Any engagement with the process would risk legitimizing this new demonisation of Palm Oil.

In some sense, it is easy to feel sympathy for the technocrats at the EU Commission, who have repeatedly been bounced into addressing ILUC by ambitious politicians in the EU Parliament who have no interest in, or respect for, such niceties as scientific rigour or WTO law. Those politicians – who are the driving force behind this whole process – are only interested in the outcome (banning Palm Oil) rather than the process. Most of the technocrats in Brussels know that ILUC is wholly unworkable, but they have been instructed to look into it anyway.

Whatever they come up with, it is likely that it will deliberately discriminate against Palm Oil. That will be unacceptable for Malaysia and Indonesia. EU Parliament elections in spring 2019 means that the political noise level (never in favour of Palm Oil) will be raised even further. Round Three of the ILUC debacle could be even more fractious that the previous two.

The Oil Palm The Oil Palm

Setting the Record Straight on Australia’s Fake News SBS

Australia’s Special Broadcast Service (SBS) has attempted to “clear the air” for palm sugar consumers, by drawing a hard line between Palm Oil and palm sugar, and the differences in the production of each commodity. The author clearly took a pre-existing assumption – that all Palm Oil is bad – and then wrote an article trying to justify that incorrect assumption. The article contains a number of errors, and is misleading consumers and harming Malaysian small farmers by spreading untruths.

Firstly, SBS suggests that simply seeing the word “palm” will turn consumers away. If this were true, why is Australian consumption of Palm Oil rising?

SBS is too concerned with promoting untruths and fails to convey the benefits of Palm Oil for Malaysian small farmers, and its long history of sustainability practices. SBS should amend the article to reflect the facts. SBS might start by correcting the following…

SBS: “[Palm Oil] production has left the industry in crisis.”

Wrong. The industry is not “in crisis”. Palm Oil is the most used vegetable oil, globally. The Palm Oil industry continues to be an economic driver for Malaysia. Furthermore, the industry is beneficial to European economies, too. A Copenhagen Economics report detailed the benefits of Palm Oil to European countries. 354,000 EU jobs are dependent on the Palm Oil industry.

SBS: “Local communities have lost access to land and resources…”

Doubly wrong. Local Malaysian communities are benefiting from oil palm cultivation. Small farmer and cooperative land programs in Malaysia gave land to local communities in the 1970s to plant oil palm. The programs lifted one million people out of poverty.

Palm Oil has proven to be the most successful poverty alleviator amongst rural Malaysian families. Today, over 650,000 small farmers are able to make a living from oil palm cultivation and provide for their families. The “Malaysian Model” is now emulated across the developing world.

In Malaysia, forest area accounts for over 50 per cent of its land area. This is far more impressive than the forest area of Australia. Australian forest area clocks in at 16 percent – data confirmed by the World Bank. The FAO reports that between 1990 and 2015, Malaysia’s forest area dropped by 181,000ha; by way of comparison Australia’s dropped by 3,790,000ha.

On a broader scale, the total forest area in Malaysia is nearly equal to the entire land area of the United Kingdom. Roughly 23 per cent of Malaysia’s forest is classified as ‘primary forest’. Many developed countries, including France and Germany, have no primary forest.

It is hypocritical and shameful for countries to suggest Palm Oil is a leading contributor to deforestation, when Malaysia forest area is nearly triple that of its critics.

SBS: “Exploitation of workers is systemic”

Absolutely false. ‘Exploitation’ is not systemic – quite the opposite. A Malaysian government investigation into labour practices said precisely that. SBS should fact check its sources before publishing such basic lies.

SBS: “Unlike Palm Oil, palm sugar is naturally produced in a sustainable, eco-friendly way.”

This is incredibly misleading. It is a basic fact that oil palms are not cut down as the author implies; their fruit is harvested and oil palms stay standing for 25 years or more. Longer than any comparable oilseed crop.

Palm Oil leads sustainability certification criteria, as determined by the Sustainability Standards Initiative report published by the International Institute for Sustainable Development (IISD).

Palm Oil’s overall contribution to global deforestation is low. This is a fact that the media, Green campaigners and NGOs conveniently opt to forget. The EU report cited in the article points out that the deforestation caused by beef is ten times higher than palm, and that soybean is double. Even maize is higher.

The facts are clear. It is clear that Palm Oil is leading standards in the global agricultural community, and it is other crops that ought to be criticised for such an environmental “faux-pas”.

Before rushing to judgement against this miracle crop, SBS would be wise to tune in to Malaysia and its small farmers. Malaysia small farmers will continue to stand up against the smear campaigns taken against their livelihood.

It’s unfortunate this article contains numerous errors and lazy assumptions. Any article of this sort – which attempts to clarify an issue – ought to be meticulously fact-checked and edited. In this case, SBS editors are best to take a red pen to this article, and clarify the many untruths.

The Oil Palm The Oil Palm

European Parliament’s Anti-Palm Oil Bias Strikes Again

Today, the European Parliament votes on its Report on the “Transparent and accountable management of natural resources in developing countries: the case of forests”. It is part of the wider EU campaign to denigrate and discriminate against Palm Oil.

The Report is authored by Finnish MEP Heidi Hautala, a Green Party member. She has been assisted by MEP Katerina Konecna, who previously authored an anti-Palm Oil Report in 2017 that was riddled with inaccuracies.

The report lists a litany of problems associated with the management of forests in developing countries. But it singles out one commodity above all: Palm Oil. This is despite the fact that many other commodities are responsible for greater deforestation than Palm Oil – see below.

This new attempt by Members of the European Parliament (MEPs) to regulate Palm Oil comes only weeks after their attempts to ban Palm Oil biofuels in the Renewable Energy Directive (RED) failed.

MEP Hautala’s Report is a non-binding resolution, but it adds another strong signal to the European Commission and the 28 EU Member States, that the Parliament wants to ban Palm Oil. To recall, this is now the ninth time the European Parliament has voted to restrict or ban Palm Oil in the past 18 months.

The lesson here is clear, and it is twofold. First, the European Parliament is institutionally anti-Palm Oil and clearly determined – regardless of the facts – to pursue an aggressive anti-Palm Oil agenda. Second, that the Parliament is not as powerful as it thinks. All previous efforts by MEPs to ban Palm Oil have failed: major EU Governments and the European Commission have rejected the idea. This was the case with the revised Renewable Energy Directive, where pressure from producing countries led the Council and Commission to remove the MEPs’ planned ban on Palm Oil.

Heidi Hautala is a known anti-Palm Oil activist. She has publicly stated that she was in favour of  restricting Palm Oil in Europe. It is no surprise that her Report is biased against Palm Oil.

However, it is essential to highlight the errors and misinformation in the Report in order to set the record straight:


ERROR 1: Agriculture is Responsible for 80 per cent of Deforestation Worldwide. Oil Palm plantations have led to massive forest destruction.

FACT: The Report attributes 80 per cent of global deforestation to agriculture. The EU’s own research states it is closer to 55 per cent. This is similar to the European Parliament’s previous claim that Palm Oil was responsible for 40 per cent of global deforestation has no basis in fact.

Moreover, Palm Oil is far behind other commodities. Deforestation from beef is around ten times higher than that of Palm Oil. Deforestation from soy is more than double. Even deforestation from maize is higher.


ERROR 2: Deforestation Emissions Contribute to around 20 per cent of Total Emissions.

FACT: The ‘20 per cent’ attribution of greenhouse gas emissions to deforestation was constructed in the early 2000s and based on very loose methodologies. It was often quoted by NGOs. Better data and better methodologies have emerged since then, as has a better understanding of the carbon cycle for forests. These days the estimate is between 10 and 12 per cent according to the Union of Concerned Scientists, IPCC Assessment Report and the EU’s own Joint Research Centre.


ERROR 3: ‘Forest Risk Commodities’ is a Widely Accepted Term.

FACT: It’s a fake-term made up by European NGOs funded by European governments. The Report refers to ‘Forest Risk Commodities’ at various points. Forest risk commodities was coined by the Global Canopy Project, a UK-based NGO. The term has no standing in international agreements or in international law. It is defined by GCP as follows:

“Globally traded goods and raw materials that originate from tropical forest ecosystems, either directly from within forest areas, or from areas previously under forest cover, whose extraction or production contributes significantly to global tropical deforestation and degradation.”


Some key flaws are:


  • The “forest risk” commodities identified – palm oil, soybean, beef and timber – do not cause deforestation. In Asia and Africa, for example, the major driver of deforestation is local and subsistence agriculture.;
  • When first developed in 2013, the concept made a series of assumptions about the commodities associated with deforestation that no longer hold up now that more advanced data is available;
  • Similarly, the overly-simplistic and catch-all term ‘Forest Risk Commodities’ completely sidelines that fact that deforestation is a result of incredibly complex variables that are often dependent on local context.


Global Canopy’s decision to focus on ‘tropical forest ecosystems’ is prejudicial and colonial. People that live in tropical areas, especially around the equator, tend to produce Palm Oil.  They also tend to be poorer. Not to mention, Global Canopy is funded in large by European governments: United Kingdom’s Department for International Development (DFID), and the German and Norwegian Governments. An organisation developed by and funded by Europeans’ aid money is being used to lobby the European Union on how to shape deforestation policy in an anti-development direction. This is a clear conflict of interest. Perhaps developing countries should label European forestry-related products “High Risk”.


ERROR 4: Only a European Palm Oil Certification Scheme Can Solve the Problem.

FACT: The Report singles out Palm Oil voluntary certification systems for allowing “deforestation, forest degradation, illegitimate appropriation of land and other human rights violations” to take place.

That’s just plain false.  First, as the EU has pointed out, Palm Oil’s deforestation footprint is significantly lower than that of beef, soybean and maize. Singling out palm oil has no basis in fact.

The reason deforestation takes place in developing countries is not because of Palm Oil, and a certification scheme won’t prevent it: deforestation happens in poor countries because farmers seek farmland to grow crops.

Land rights and human rights violations do not happen because of Palm Oil. Tightening up palm certification will not provide solutions for these problems because neither Palm Oil nor Palm Oil certification is their cause.

Malaysia has strong laws and regulatory systems regulating the Palm Oil industry.  The Malaysian Sustainable Palm Oil (MSPO) standard has been launched on a voluntary basis and will become mandatory by 2019.

The mere suggestion that a European Union-forced certification scheme targeting Palm Oil is necessary is patently absurd. Notwithstanding that such a scheme would bring about unequal treatment of Palm Oil, and violate the EU’s commitments under WTO rules.

This latest report is, again, filled with inaccuracies. It’s really just more fake news coming out of Brussels on Palm Oil. MEP Hautala thinks that ending Palm Oil will end deforestation. But deforestation – particularly when paired with poverty – is complex. The sooner the EU realizes this the sooner they might contribute to sustainable development.

The Oil Palm The Oil Palm

Comparing Palm Oil to Plastic: A Cry for Attention by Anti-Palm Oil NGOs

“Is Palm Oil the new Plastic?” asks a recent media article. Here’s the simple answer: No. The more detailed answer is: No, and it’s ridiculous to even suggest that. This is simply an attention-seeking stunt by anti-Palm Oil campaigners in Europe, mainly elites living in London, attempting to link Palm Oil to ‘socially-unacceptable’ products that the bobo London-and-Brussels Europeans consider ‘bad’ for your health and the environment (i.e. – plastic).

To this end, campaigns have been launched blaming Palm Oil for every conceivable wrong – no matter how far-fetched – all in the service of trying to make Palm Oil socially unacceptable.

Others have also been the victim of European attempts to negatively brand and shame their industries: banning plastic is one of the most recent European campaigns, led by NGOs.

This new attack on Palm Oil is being led by The UK Rainforest Foundation, an organisation that receives funding from the British government.

Unfortunately, the Director of the Rainforest Foundation, Mr Counsell, gets his fact wrong, which is unsurprising to anyone who knows the history of anti-Palm Oil NGOs. Where should we start with the errors? Let’s start from the beginning.

Error #1:

Mr Counsell remarks on the “carpets” of oil palm plantations. First, Malaysian oil palm plantations inhabit only 17 per cent of Malaysia’s land mass. Malaysia’s total planted area for oil palm is around 5.8 million hectares. Yet, look at the EU’s total area for oilseed production, which doubles this number, at 12 million hectares.

Second, the only “carpets” of any oilseed that Mr Counsell ought to be referring to are the over 606,000 hectares of yellow rapeseed fields smeared across the United Kingdom. Compared to palm oil, rapeseed requires far more pesticide and fertilizer, while the crop yields far fewer tonnes of oil produced, per hectare.

Error #2:

Mr Counsell claims “pretty much any wildlife living in the forest will have lost their habitat” due to harvesting palm oil. Where to begin with this untruth? The orang-utan is not losing its natural habitat due to palm oil, for a number of reasons. For starters, the wildlife Mr Counsell is referring to – the orang-utan – is a protected species in Malaysia. The latest assessment by the IUCN estimates there are over 104,000 orang-utan in Borneo alone.

Academic research has found that hunting, not oil palm cultivation, is “by far the greatest immediate threat to the survival of most of the region’s [Southeast Asia]” species. The facts here are simple, and backed up by detailed research.

Malaysia’s protected forest area is 22.1 million hectares, covering over half of Malaysia’s land area, at 54 per cent. This is incredibly high by global standards. The UN has confirmed Malaysian forest area is increasing, and has been since 2000. Malaysian forest area is greater than total land area of England, Belgium and the Netherlands, combined. Mr Counsell should think twice before pointing fingers at a country that is miles ahead of his own, and the rest of Europe, in forest protection.

Error #3:

Mr Counsell calls palm oil a problem when stating, “the problem is there are many derivatives of palm oil”.  Attacking downstream value-added businesses, many of which are owned by the small farmers themselves, is a disguised attack against the way of life of rural Malaysians.

650,000 Malaysian small farmers depend on palm oil to provide a stable livelihood for themselves, their families and dependents. Palm Oil has not been and is not a “problem” for Malaysia. For decades, cultivating oil palm has been the most successful poverty alleviator for Malaysians looking to provide for their families and dependents. For Mr Counsell to advocate stripping this crucial agricultural sector away from Malaysian families is effectively sentencing millions of Malaysians to a life of poverty.  How Colonial of him.

As Mr Counsell seeks to make Palm Oil the next Plastic, he may want to rethink his campaign and instead look to his countryside and those endless monocultural fields of yellow flowers that have displaced England’s countryside. Biodiversity in the U.K. is declining dramatically.

Finally, the British government is working to establish trade links with potential trading partners, including Malaysia and other Palm Oil producing countries. For the UK Government to fund groups like the Rainforest Foundation who then attack the very countries they want a trade deal with (whose major product is Palm Oil) is certainly not the best path forward to securing future trade. Any trade deal signed between the countries, including the potential UK accession to CPTPP, must benefit all sides. This means support for Malaysia’s primary agricultural commodity and export.

The EU Commission is preparing the ground for new ILUC and HCS criteria that will target Palm Oil in February 2019. European Ambassadors have already alluded to the fact that part of this effort will undoubtedly include a ban, or eventual phase out, of Palm Oil.

When the aggressive lobbying efforts kick in, spearheaded by anti-science NGOs, and protectionist domestic rent-seekers, will post-Brexit UK change its course and stand by Malaysia? Let’s just hope the UK government realizes this, too. There are many, many demands on UK taxpayers’ money: giving it away to fringe groups that attack your trading partners is surely the wrong priority.