The Oil Palm

Prosperity and Opportunity in Malaysian Palm Oil

The Malaysian palm oil industry has remarkable accomplishments for which to be proud. Poverty reduced by 90 per cent since 1960 (when the national poverty rate was almost 50 per cent); more than 570,000 people directly employed; 5 million hectares cultivated, with more than 56 per cent of Malaysia’s land under conservation. This accomplishments have benefited the state, but it is the producers and workers in the industry that are truly reaping the rewards. Even the environment benefits as the industry and revenues contribute directly to conservation and research into Malaysia’s remarkable biodiversity.

But amid these accomplishments, criticism of our industry continues unabated. For instance, a recent report by the Pulitzer Center on Crisis Reporting focused on children of migrant workers and obstacles to their education in Sabah. But unacknowledged in the report is the central and cooperative role played by Malaysia’s and Sabah’s Ministry of Education and plantation companies in ensuring these children are provided for. For instance, the Education Ministries and plantation companies directly support more than 121 “learning centers” throughout Sabah in demonstration of their commitment to education and their employees.

Much of the criticism against our industry is misplaced, reflecting the dual challenges of a globalized economy and porous borders experienced both in Malaysia, and in the United States and Europe. But in the face of these challenges, our industry is pushing forward to redefine what it means to be socially and ethically responsible. And our industry is not just doing that for Malaysians, but for anyone who wishes for a better life.

The Oil Palm

Norway penalises responsible and sustainable Malaysian palm oil

A large global pension fund administered by the Norwegian Government has divested from a number of palm oil producing companies in developing countries. The Norwegian Government Pension Fund Global (GPFG) has reportedly divested from a number of Southeast Asian palm oil producers and agribusiness companies, citing concerns about the sustainability of palm oil production.

The fund has provided no independent evidence of unsustainable practices to support the divestment decision. Palm oil is in fact a sustainable and resource efficient crop for producing vegetable oil.

The GPFG – formerly called the Government Petroleum Fund – acts as a fund for the surplus income derived from Norway’s petroleum industries. It is the largest sovereign fund in the world.

Norwegian and international environmental campaigners have lobbied the Norwegian Government to divest from palm oil producers on ‘ethical’ grounds. Norwegian NGOs have also campaigned to reduce national palm oil consumption and targeted a number of major Norwegian food producers.

The RSPO – a certification organisation established by WWF – has supported the fund’s decision to divest. The RSPO claims “to advance the production, procurement, finance and use of sustainable palm oil products”, but it has publically attacked its own members, many Malaysian, and described the divestment as “affirmative”. The function of industry organisations and roundtables is traditionally to defend members, especially those who have gone to considerable lengths both operationally and financially to support the RSPO. The public attack highlights the strategy of influential WENGOs, chiefly WWF, to use the RSPO as a vehicle to assert an anti-palm oil agenda.

NGO campaigning and divestment by the fund could threaten the livelihood of hundreds of thousand palm oil growers in developing countries such as Malaysia.

The Norwegian Government administers the fund and appoints an ethics committee tasked with providing divestment advice on activities they deem ‘unsustainable’.

Norway has amassed a vast wealth based on extracting and exporting fossil fuels which have been linked to greenhouse gas emissions; this wealth has been stored in sovereign wealth funds which are managed by the government pension fund. But it now appears that the very economic activities behind the fund would not meet the administrators’ own ‘ethical’ investment requirements.

Not only are the grounds of divestment weak – the palm oil industry is well regulated and must meet strict government environmental and conservation standards in Malaysia – it is also hypocritical.

Eminent American economist Richard Rahn, highlighted such hypocrisy in Norwegian policy when referring to the countries stance on tax havens: “Norway, which now has the highest, or closest to the highest, per capita income on the planet due to its immense oil reserves and relatively small population, has decided to beat up on a number of poorer countries that do not have the luck to sit on a vast pool of oil.”

Norwegian divestment from palm oil producers in Asia highlights a concerning environmental policy paradigm: the developed North are content to continue with environmentally damaging business operations in order achieve and maintain high living standards; at the same time they requiring the South to minimise develop through sustainable agricultural industries.

The Oil Palm

Interview with Mr. Kurt G. Berger

Mr Kurt G. Berger is a food technology expert based in the United Kingdom. Mr Berger first studied palm oil and its use in food applications in the 1950s, while working in the London research laboratory of a large food manufacturer. Mr Berger has spent 50 years researching the quality, function and practical application of the best food ingredients with the aim of continuously improving food products, positioning himself as a leading expert in the role and function of palm oil in the food market.

Over the course of his research, Mr Berger found people to be unduly suspicious of palm oil, an ingredient they were unfamiliar with. However, once the functional and economic advantages of this ‘more natural product’ were explained to them, people become significantly more confident in the role and benefits of palm oil in their daily diet.

In this first Q&A with The Oil Palm, Mr Berger discusses the properties of palm oil, the dangers of partially hydrogenated vegetable oils, the popularity of palm oil in food application and its role in ‘enhancing the nutritional quality of cooked food’, as well as the superior efficiency of the oil palm.

Should you wish to find out more about palm oil or receive additional information on any of these questions/answers, please contact:

What properties of palm oil make it so different from other vegetable oil?

Palm oil is semi-solid at ambient temperature, melting at about 35 ºC, when all the other major vegetable oils are liquid. This is due to its content of about 50% saturated acids, mainly palmitic and stearic.

Why is palm oil so widely used in food applications in Europe?

Historically, the fats available for food preparation in Europe until the end of the 19th century were primarily animal fat products from the farmyard, i.e. butter, beef fat and lard. Traditional methods evolved to use these semi-solid fats to prepare cakes, pastry and biscuits. Liquid oils do not function well in these products.

With growth in population, fat supplies became inadequate, leading, for instance, to the invention of margarine to replace butter. Margarine was originally formulated from beef fat. At the beginning of the 20th century, vegetable oils could be imported and technology developed to ‘clean them up’ in the refinery and ‘hydrogenation’ to replace semi-solid animal fat sources.

What is hydrogenation?

To function in traditional confectionery products, a solid content is required of fats. Hydrogenation enables some or all of the unsaturated fatty acids in vegetable oils to be converted to saturated fatty acids. Partial hydrogenation limits this conversion to a chosen amount of solids, regulating the consistency of the processed oils/fats. However, the chemical process also produces unnatural trans-fatty acids (trans fats). Trans fats adversely affects blood lipids, increasing the risk of cardiovascular disease, including increased LDL cholesterol (bad cholesterol) and contributing the hardening of arteries (artherosclerosis). Authorities strongly discourage the use of trans fats, even going to the extent of banning their presence in vegetable oils.

Are there alternatives to Hydrogenation?

Instead of partially hydrogenating vegetable oils, the required solid fat content can be easily supplied by blending liquid oils with palm oil, or its high melting point components. In many cases this may also be more economical. These blends are entirely free of trans fats.

Today palm oil is coming under attack in France. Has this happened before?

During the 1980s a virulent anti-palm oil campaign developed in the USA, promoted in part by soya bean and other interests. Whole page adverts appeared: ‘Palm oil is what kills Americans’, when in fact it formed only about 1% of their fat consumption. Supermarkets had ‘We use no palm oil’ notices in the window. The use of palm oil in foods plummeted as a result.

What happened to palm oil consumption in the US after the late 1980s?

Despite the severe consumer and industry backlash against palm oil in the 1980s, regulators dealt a severe blow against the campaigns in 1994. USA’s Food and Drug Administration ruled against the use of ‘no palm oil’ labels. The regulator concluded that while the label did not explicitly criticize palm oil consumption, the implication was sufficient to mislead consumers.

While anti-palm oil interests enjoyed tremendous success into the 1990s, recognition of the adverse impact that partially hydrogenated vegetable oils were having on the health of consumers resulted in a renewed appreciation for natural imported vegetable oils. Most recently, palm oil consumption levels have grown to over 1 million tons in the US alone.

Palm oil is a key ingredient for shortening. Why shortening and why is it so important for baking?

Key ingredients of flour confectionery are wheat flour, fat and sugar. Many other components give specific character. Shortenings are usually blends of liquid oil with a ‘hard stock’, be it hydrogenated oil or palm oil or palm stearin.

To make bread, an aerated structure is formed, in which the air bubbles are contained by a thin film of gluten (a component of the protein we find in wheat flour). The gluten is toughened through the baking process. In pastry and biscuits we do not want to produce tough gluten strands, we want to finish with a crumbly, soft, melt-in-the-mouth character – a ‘short’ pastry. To obtain this we use a fat which spreads efficiently over the flour during mixing. Different textures are obtained by varying the amount of fat (‘shortening’) and water in the mixing process. To perform, the shortening must be soft for mixing. A liquid oil would tend to stay in drops failing to protect the gluten effectively like palm oil does.

Palm oil is also commonly used for frying. Why is this?

Frying is a traditional culinary practice worldwide. It contributes to interesting flavours and can enhance the nutritional quality of food.

Palm oil and palm olein (the more liquid fraction) are particularly good for frying where re-use of the oil is involved. They have moderate amounts of sensitive polyunsaturated fatty acids which can otherwise become unstable through prolonged exposure to high heat, while palm oil also contains large amounts of natural antioxidants. As a result they can withstand frying conditions very well and do not breakdown into toxic compounds. Palm oil and its by-products are also used worldwide in the manufacture of instant noodles, doughnuts, frozen fried foods, etc. and for snacks like potato crisps.

Why do food manufacturers prefer to use palm oil?

Snack foods must have a long shelf life after packaging. In major research sponsored by the European Union a high oleic acid containing sunflower oil was tested for snack food manufacture. Palm olein was used as the reference standard. Both oils performed well. However, the palm olein product had a longer shelf life, and was also significantly less expensive.

Why is palm oil more cost effective?

For several reasons:

a) It is more economical to produce. Palm oil is produced by simple steaming and pressing, with relatively limited use of expensive solvents for extraction as for other oils. It is also available as a refined oil, requiring at most a mild additional processing before use. It avoids the cost of full refining required for other oils.

b) It has a higher yield per hectare than other vegetable oil (see table below) and is a perennial crop that is harvested year-round. This high productivity of the oil palm makes the oil profitable at a price below that of the other oils (which are also subsidised by governments in various ways).

The following table shows the approximate oil yield in tons per hectare per year of major oil crops.

Crop Oil/tons per hectare
Palm – fresh oil 4
Palm – kernel oil 0.5
Soya bean 0.4
Sunflower 0.5
Rapeseed 0.7


What about environmental concerns linked to oil palm cultivation?

Palm oil is now available with independent certification demonstrating that it has been produced in a sustainable manner without damage to the environment. This addresses the concerns that some consumers have regarding forest conversion and greenhouse gas emissions.

What is the role of palm oil in global food security?

There is a great deal of talk about food security – for good reason. We know the world population is growing, with experts predicting at least another 2 billion people by 2050. As the vast populations of China, the Indian subcontinent, Africa and South America become more prosperous, demand for fats will continue to rise.

Research undertaken by international organizations like the World Bank and the UN’s FAO have concluded that vegetable oil demand will rise by more than 100 million tonnes.

How to satisfy this demand in a world with finite agricultural land, already under pressure? Clearly the most efficient oil crops in land use terms are vital to meeting this demand, as will relying on the most efficient crops available in other food sectors.

The Oil Palm

Vatapá – Brazilian Shrimp Stew

This hearty, Brazilian stew is from the state of Bahia. Bahian cuisine is known for being a crossroads for African, Iberian and indigenous flavors and spices, and this dish is no exception. While some components vary from recipe to recipe, palm oil and coconut milk are always included.

6 oz. dried salt cod
½ cup small dried shrimp
¼ cup cashews
¼ cup plain, unsalted peanuts
3 scallions, trimmed and thinly sliced
2 dried chiles de arbol, stemmed
2 garlic cloves
1 1″-piece ginger, peeled and thinly sliced crosswise
5 oz. white country bread, thinly sliced
1 14-oz. can coconut milk
½ cup dende (palm oil)
1 small onion, finely chopped
3 canned whole peeled tomatoes, crushed by hand
3 cups fish stock
8 oz. raw medium shrimp, peeled and deveined
Kosher salt and freshly ground black pepper, to taste
Cooked rice, for serving

Place cod in a 2-qt. saucepan; cover by 2″ with cold water. Boil for 20 minutes; drain. Repeat process twice more; finely shred and set aside. Purée dried shrimp, cashews, peanuts, scallions, chiles, garlic and ginger in a food processor; set shrimp paste aside. Combine bread and coconut milk in a food processor; let sit for 20 minutes. Purée; set bread paste aside.

Heat oil in a 4-qt. saucepan over medium-high heat. Add onion; cook until soft, about 13 minutes. Add shrimp paste; cook for 2 minutes. Add tomatoes; cook until broken down, about 6 minutes. Add cod, bread paste, and stock; boil. Reduce heat to medium; cook until reduced by one quarter, about 30 minutes. Add shrimp; cook until shrimp are pink and cooked through, about 3 minutes. Season with salt and pepper; serve with rice.


Recipe courtesy of

The Oil Palm

Chicken Stew with Okra

This is a traditional West African dish. Locals recommend serving the stew with rice to soak up the delectable sauce!

1 (3- to 3 1/2-lb) chicken, cut into 10 serving pieces

1 teaspoon salt

1 (14- to 15-oz) can whole tomatoes in juice

1/4 cup water

2 tablespoons tomato paste

1/4 cup peanut or palm oil

1 medium onion, chopped

4 garlic cloves, minced and mashed to a paste with 1 teaspoon salt

1 1/4 teaspoons cayenne

1/2 cup smooth peanut butter at room temperature

1 3/4 cups reduced-sodium chicken broth (14 fl oz)

1 lb sweet potato

1 (10-oz) box frozen small okra, thawed


Arrange chicken in 1 layer on a tray, then sprinkle with salt and let stand at room temperature 30 minutes.

While chicken stands, pulse tomatoes with their juice in a food processor until finely chopped.

Stir water into tomato paste in a small bowl until smooth.

Pat chicken dry. Heat oil in a 10- to 12-inch heavy skillet over moderately high heat until hot but not smoking, then brown chicken, without crowding, in 3 or 4 batches, turning over occasionally, until golden, about 6 minutes per batch. Transfer with tongs as browned to a 6- to 7-quart heavy pot. Pour off all but 2 tablespoons fat from skillet, then add onion and cook over moderate heat, stirring occasionally, until edges are golden, 2 to 3 minutes.

Add onion, chopped tomatoes, tomato paste mixture, garlic paste, and cayenne to chicken in pot.

Whisk together peanut butter and 1 cup broth in a bowl until smooth, then add to chicken along with remaining 3/4 cup broth, stirring to combine well (chicken will not be completely covered with liquid). Bring to a boil, uncovered, then reduce heat and simmer, covered, stirring occasionally (to prevent sticking), until chicken is very tender, 25 to 30 minutes.

Peel sweet potato and cut into 1-inch chunks. Stir into stew along with okra, then simmer, covered, until potato is tender but not falling apart, 10 to 12 minutes.

Recipe courtesy of

The Oil Palm

New initiative to promote Malaysian responsible palm oil

Malaysian Plantation Industries and Commodities Minister, Tan Sri Bernard Dompok, announced a Government-endorsed initiative to brand responsibly produced Malaysian palm oil.

Malaysian palm oil producers are already required under Malaysian law to produce sustainable, environmentally-friendly, and high quality palm oil.

Branding of this by the government will guarantee these attributes to consumers and global manufacturers, differentiating Malaysian palm oil from other palm oil sources.

Palm oil that is branded as compliant will enable producers to provide manufacturers and retailers with a means to demonstrate that their procurement of palm oil from Malaysian complies with strict environmental and social requirements.

In order to bear the Malaysian brand, palm oil will need to be produced in line with all Malaysian Government laws and regulations, as well as complying with overarching principles to respect a triple bottom line that seeks to benefit ‘People, Planet and Profit’.

The new initiative promises Malaysian growers the opportunity to demonstrate that their product is responsibly produced; and a distinct label that will add value to the national product.

Currently certification systems exist for palm oil growers and producers but they are either not applicable, or affordable for the majority of Malaysian growers. Many Malaysian growers are also small farmers who cannot afford the high cost of individual or group certification required by these systems.

Furthermore, existing private certification systems are not receiving recognition from consumers according to a report in The Grocer out of the United Kingdom. It is important that the Malaysian palm oil industry have access to a viable system that allows them to demonstrate it is produced in a responsible manner.

The Oil Palm

Malaysian Biofuels Sustainable; Good Palm Oil Management Key

The environmental management of a crop is as important as the type of crop when it comes to emissions, according to a new study in Global Change Biology. The new research points out the fallacy of blaming a specific crop (e.g. palm oil) for emissions, when poorly managed alternatives can have greater environmental impacts.

Biofuels – in particular those derived from palm oil as a feedstock – offer a sustainable alternative to conventional fossil fuels associated with large carbon footprints. Despite this, some NGOs and governments support restricting palm oil-derived biofuels through national legislation. New research shows this approach towards specific crops or species is scientifically flawed.

Several environmental groups recently commissioned a report in an effort to lobby the European Union to limit use of palm oil based biofuels through their Renewable Energy Directive (RED). In the US, the EPA is set to decide whether palm-oil based biodiesel will be recognised as sustainable under the Renewable Fuel Standard (RFS). Here too, NGOs have lobbied hard to have palm oil excluded based on inaccurate ‘sustainability’ claims.

According to leading experts published in respected academic journal Global Change Biology – Bioenergy, any robust methodology to assess the ‘sustainability’ of biofuel feedstock should take into account ‘management potential’.  Currently the EPA and EU sustainability criteria are largely based on aggregated data of crop species.

This is a sensible recommendation; poor management of a crop can lead to poor environmental outputs, just as strong management can improve the crop’s overall sustainability. In other words, the environmental outputs from bio-fuel feedstock are dependent on management practices, and should not be based solely on species of crop used. Good management of crops has the potential to “swing” the sustainability rating of the feedstock.

This is the case in Malaysia, where well managed palm oil plantations result in highly sustainable biofuel products. This biofuel can then be blended and used as a conventional fuel. This is a sustainable strategy – unlike fossil fuel, palm oil is a renewable resource. It is one of the most resource efficient feedstock currently technologically viable for biofuel production – far more sustainable then other crops that require much more land to achieve the same yields.

Some campaigners claim that palm oil is not sustainable despite its benefits to fossil fuel consumption.  They argue that CO2 is emitted in instances where forests are converted to plantations.

This argument flawed in the case of palm oil grown in Malaysia – most plantations are established on already degraded land or plantations previously used to grow other crop species. Furthermore, Malaysian industry operates under a strict regulatory system that ensures that over half the country remains forested.

The study found that palm oil grown on existing plantations, “scores high on many environmental indicators. Oil palm requires 7–11 times less land area than soybean, rapeseed, and sunflower to produce the same amount of oil.”

The authors argue that “high-yielding bioenergy crops … can be managed for environmental benefits or losses, suggesting that the bioenergy sector would be better informed by incorporating management-based evaluations into classifications of bioenergy feedstocks.”

The study outlines a number of palm oil management strategies that reduce CO2 emissions: returning organic residues to the soil; the trapping of methane in processing mills; and the use of fertilizer to increase yields. These are technologies and management practices widely employed by
Campaigners portray palm oil as ‘bad’, but as emerging research demonstrates, “crop species themselves are neither exclusively positive nor negative, rather it is how they are managed for bioenergy that will determine their impacts.”

Commodities are not ‘inherently’ sustainable or unsustainable; sustainability depends on the processes and management used throughout the commodity’s production. In the case of Malaysia, good palm oil management is enshrined in national regulations and supported by industry.

Policy makers and NGOs should take a broader science-based view by including the management ‘swing potential’ in sustainability assessments. This is necessary if Malaysian palm oil-derived biofuel is to deliver on its great potential in reducing global CO2 emissions.

The Oil Palm

MPOC: The Inaccurate, and Unhealthy Claims of Rainforest Action Network

The recent endorsement of red palm oil by one of America’s most recognized medical professionals, Dr Mehmet Oz, has led to a frenzy of activity in the activist community. In an effort to denounce both Dr Oz and the palm oil industry, organizations like Rainforest Action Network have taken to proclaiming inaccurate attacks against palm oil for fear that the nutritional benefits of the crop may in fact become recognized by the wider American and European public. But fortunately for consumers, much of what Dr Oz said was correct.

Rainforest Action Network in particular has maintained it’s fundamental opposition to all things palm oil, lately positioning itself as a health expert. Unfortunately for those that look to these environmental activists for counsel, much of what they proclaim is inaccurate. Consider these claims made by the organization:

RAN claim #1: According to the World Health Organization and the National Heart, Lung and Blood Institute, palm oil is unhealthy due to its saturated fat content – Despite scientific research definitively demonstrating that saturated fat consumption is unrelated to cardiovascular disease, this canard has continued. A hypothesis initially considered by scientist Ancel Keys in the 1950s, his “Seven Country Study” has since been proven to be grossly manipulated . Unfortunately, organizations like the WHO and the NHLBI ignore the decades of research that proves the criticism against saturated fats to be false. Consider the fact that prior to the publication of the WHO report referenced by RAN, Dr Nevin S. Scrimshaw, a professor at the Massachusetts Institute of Technology and President of the International Nutrition Foundation warned that the WHO risked compromising its credibility with the claim that palm oil is harmful to health. And the NHLBI has been specifically implicated in a rise in iodine deficiency because of their campaigns against salt. In 2000, the American Heart Association proclaimed that reducing fat intake is not effective for reducing cardiovascular disease.

RAN claim #2: Palm oil is unhealthy – Palm oil has been found to reduce the risk of breast cancer and cardiovascular disease. Scientists believe it may hold important benefits for victims of neuro-degeneration such as strokes . Nutrition experts have found that red-palm oil which is rich in beta-carotene (a precursor to Vitamin A) may offer millions of people suffering from Vitamin-A deficiency (including more than 250 million children) a cure from a crippling nutrient deficiency . According to NGO Fonds Francais Alimentation & Sante (French Fund for Food and Health), palm oil plays an important role as part of a balanced diet. Research undertaken in China has demonstrated that palm oil consumption has a neutral, if not positive , impact on the risk of cardiovascular disease. In sum, palm oil is not just a healthy vegetable oil, but has important medical benefits.

RAN claim #3: Dr Oz’s endorsement of palm oil has led to a buying frenzy – Palm oil consumption is continuing its long-term trend of market growth both in the US and Europe, though not because of the health claims made by television personalities like Dr Oz. The Western markets are turning to palm oil because of its role as an ideal replacement for toxic partially hydrogenated vegetable oils – the primary source of artificial trans-fats. And the result is lower costs for food producers and consumers without the added health risk to which more than 200,000 cardiovascular disease related deaths per year were attributed . That’s is certainly a win-win for all involved.

RAN claim #4: Palm oil is being re-branded as sustainable and healthy – Historical revisionism is not the best means by which to advocate for healthy living. RAN should consider the real manipulation of science that led to the perception that palm oil was unhealthy in the first place – the anti-tropical oil campaigns in the 1970s and 80s. The result of these campaigns was the introduction of partially hydrogenated vegetable oils in Europe and America – a health scourge that has left millions overweight and many dead from cardiovascular disease. Unfortunately, the campaigns against palm oil have escalated just as palm oil imports have risen to place these toxic, processed vegetable oils, to the detriment of consumer health.

And the sustainability of Malaysian palm oil has never been in question. Not only is Malaysia the primary source of RSPO-certified palm oil, Malaysia has also actively enforced its commitment to preserve more than 50 per cent of its forests in perpetuity. Today, the country retains more than 62 per cent forest cover, while oil palm plantations occupy only 15 per cent of Malaysia’s land area. In the United States, home of RAN, more than 44 per cent of the land area is occupied by agriculture!

RAN claim #5: Palm oil is not a sustainable biofuel under the US’s Renewable Fuel Standard – Malaysia is actively promoting its national interests in Washington and to demonstrate the inaccuracy of the EPA’s assessment of palm oil and to have the crop included as a sustainable biofuel under the Renewable Fuel Standard. According to the EPA, palm biodiesel only reduces emissions by 17%, but independent assessments demonstrate this claim to be inaccurate. Dr Robert Shapiro, former Undersecretary of Commerce for President Clinton, finds more accurate greenhouse gas emissions savings for palm oil to be between 58% and 64% . And Dr Gernot Pehnelt of the University of Jena, Germany, has assessed palm biodiesel emissions savings to more conservatively be between 38.5% and 41%. However, in recognition of the sharp differences in assessments, the EPA recently undertook a fact-finding mission to Malaysia to witness oil palm plantations and the production of palm biodiesel firsthand, and Malaysia eagerly awaits the relase of their findings.

Unfortunately, in defending the palm oil industry and by extension the health of global consumers from disingenuous claims made by RAN and their allies, the industry has been vilified by the very organizations that claim to be impartial and science-based. The Malaysian palm oil industry includes over 240,000 small farmers in an industry that employs almost 1 million people. With oil/fat consumption expected to more than double by 2050, the world will increasingly rely on highly efficient, healthy vegetable oil sources. The world needs palm oil today, and even more so, tomorrow.

The Oil Palm

European Food Labelling Regulation – Palm Oil Targeted (Again)

Food labelling provisions have become the latest cause by the Western environmental movement to mischaracterize and cast doubts on Malaysia’s thriving palm oil industry. Having seen the issue advance in Australia, Western environmental NGOs have promoted their cause at the European Parliament in Brussels to implement regulation that would mandate the labeling of vegetable oil sources and restrict Malaysia’s palm oil trade for food producers, retailers and consumers.

Despite the regulation’s focus being on enhanced health and nutritional information for consumers, a left-green coalition of MEPs are seeking to insert the provision to label vegetable oil sources specifically targeted at palm oil. Their justification is based purely on environmental considerations, motivated by the anti-palm oil WENGOs. The amendments fail to make any case for enhanced nutritional value and have been recognized by the European Commission and the Council as representing substantial additional cost burdens to business and consumers.

The Malaysian Palm Oil Council has issued a position statement urging the European Parliament’s Environment, Public Health and Food Safety Committee to reject the provision to label the specific origin of vegetable oils.\n

• Malaysia produced more than 17 million tonnes of palm oil in 2010, with more than 2 million tonnes exported to the EU. This has ensured a low-cost, sustainable vegetable oil source for the EU while contributing to low food costs.

• New amendments ignore how vegetable oils are integrated into the food supply, and the flexibility required for businesses to maintain their supply products to the market. This is confirmed by the EU’s Oil and Protein Meal Industry (FEDIOL) and the International Margarine Association for the Countries of Europe (IMACE).

• Consumers are unlikely to benefit from vegetable origin labelling as nutritional information labelling requirements contained in the proposal will already sufficiently inform consumers of the saturated fat, total fat and vitamins contained in packaged products.

• With palm oil accounting for 5% of Malaysia’s exports to the EU, this labelling requirement directly undermines the spirit of cooperation necessary to ensure free and open trade.

Persuaded by WENGOs, Europe refuses to acknowledge that Malaysia conserves more than 50 percent of its forests from commercial development, in contrast to European countries like Belgium, which only conserves 22.4% of its forest land. Malaysia has set an example for economic development and environmental leadership.

Mandatory vegetable origin labeling is bad for palm oil producers, European businesses and consumers. The question is, who can supporters of the measure point to that will benefit?

The Oil Palm

MPOC Continues Defence Against Australian Palm Oil Labelling Bill

Today, representatives from the Malaysian palm oil industry appeared before a public hearing of the Australian House Standing Committee on Economics to provide testimony and answer questions regarding the Food Standards Amendment (Truth in Labelling – Palm Oil) Bill 2011. The delegation, appearing before the Committee to outline concerns and the implications of the legislation to the Malaysian palm oil industry, included: His Excellency Dato Salman Ahmad, High Commissioner of Malaysia; Tan Sri Dr Yusof Basiron, Chief Executive Officer of the Malaysian Palm Oil Council (MPOC); Dato’ Haji Aliasak Haji Ambia, President of the National Association of Small Holders (NASH); Mr Palaniappan, Senior Executive Director Group R&D, CEO, of the Federal Land and Development Authority’s (FELDA) Agriculture Services; and Mr Aknan, Undersecretary, Ministry of Plantation Industries and Commodities.

The appearance follows a recent visit of officials from the Government of Malaysia and representatives of the Malaysian palm oil industry to Australia to correct the misrepresentations being made against the industry and advocate in support of mutually beneficial bilateral relations. Unfortunately, the legislation is a sharp reversal from years of increasingly liberalized trade between the two countries, and risks undermining a central pillar of the Malaysian economy.

In prepared testimony for the Committee, Tan Sri Dr Yusof Basiron, Chief Executive Officer of the Malaysian Palm Oil Council, stated that the legislation:
– Directly targets the Malaysian palm oil industry, which accounts for almost 100% of all palm exports to Australia, and which account for 9.3% of Malaysia’s GDP;

– Has been significantly expanded to include any food and non-food products containing or made with the use of palm oil or any of its by-products, making it no longer appropriate to be considered a “food labelling” bill;

– Overtly discriminates against palm oil. If the proposed legislation was open, direct and honest it would cover all vegetable oils – not just palm oil;

– Undermines bilateral relations between Australia and Malaysia by directly targeting the livelihoods of almost 1 million people in Malaysia, as noted by a letter delivered to the Australian High Commission in Kuala Lumpur by the National Association of Small Holders (NASH);

– Violates several principles of the WTO as well as terms of the ASEAN-Australia-New Zealand Free Trade Agreement;

– Will cost Australian consumers hundreds of millions of dollars due to the cost of changing labels being assessed at between AUD 5,000 and AUD 15,000 per product by the Australian Food and Grocery Council. The number of products affected runs into the thousands; and

– The Bill is the work of environmental NGO’s with the aim of gaining a monopoly on the control of the palm oil supply chain by promoting their own initiated certification scheme for sustainable palm oil.

Meanwhile, allegations of environmental degradation attributed to the palm oil industry are without merit:

– Zoos Victoria claim that the palm oil industry causes deforestation at a rate of 300 football fields every hour, without substantiation. According to the UN’s Food and Agriculture Organisation (FAO), deforestation in Malaysia has occurred at an average annual rate of 114,000 hectares – or less than one tenth the rate claimed by the Zoos Victoria and almost one fifth the rate of Australia’s deforestation;

– Claims are perhaps, hypocritical, as they ignore facts from the FAO that deforestation in Australia occurred at a rate of 562,000 hectares per annum – nearly five times Malaysia’s rate;

– Claims of the imminent extinction of the orang-utan are without merit and ignore efforts in Malaysia to preserve the lives and habitats of the country’s 16,000 orang-utans, through the establishment of wildlife sanctuaries, mega-wildlife preserves and rehabilitation centres for displaced orang-utans; and

– Labelling to discourage consumption of palm oil will directly undermine conservation efforts in Malaysia, such as the Malaysian Palm Oil Wildlife Conservation Fund, which supports enforcement of environmental laws and establishment of sanctuaries and wildlife preserves.