The Oil Palm The Oil Palm

Will the Future UK-Malaysia Partnership be Positive for Palm Oil?

The UK and Malaysia have a long and distinguished diplomatic and economic relationship. The likelihood – and expectation – is that the partnership will grow even further as the UK leaves the European Union and focuses more on Asia and the fast-growing economies of the developing world. At least, this is the rhetoric emerging from the UK government in London. The question for Malaysia – and for the Palm Oil sector – is whether the reality will match the rhetoric.

The UK Prime Minister’s Trade Envoy – Richard Graham MP – is visiting Malaysia this week to continue discussions on the future UK-Malaysia partnership. Trade and investment are likely to be at the top of the agenda. The UK has been open about its intention either to join as a partner to the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP) – the proposed trade pact between eleven countries, including Malaysia –  or alternatively to engage in bilateral deals with the CPTPP members. This would include a new trade deal with Malaysia in the coming years.

The potential is obvious. The UK’s exports to Malaysia in 2017 were 3.8bn EUR and those exports support over 30,000 jobs in the UK according to data from the economic consultancy Copenhagen Economics, in a report commissioned by the Malaysian Palm Oil Council. UK exports to Malaysia include high-end electronic components; cars; aeroplanes and aeroplane parts; whisky; medicines; and precious stones. These are high-value industries with significant employment across the UK, and key drivers of economic growth. Many would expect significant increases in trade after the UK leaves the EU.

The opportunities for a new trading relationship are clear: but this must mean opportunities on both sides.

For Malaysian Palm Oil, the trade numbers are only one part of the picture. As with many discussions in modern trading relationships the focus will not be only about volumes. It will be focused on non-tariff barriers. These are the real barriers to trade and are the main manner in which European nations – including the UK – has tried to restrict and harm Malaysian Palm Oil. It is axiomatic that any UK-Malaysia trade deal – or Malaysia’s support for the UK’s entry into CPTPP – would need to include commitments to non-discrimination against Malaysia’s leading agricultural export.

What would that mean in practice?

The UK was deliberately a bystander in the recent RED debate and ended up not opposing the RED ban on Palm Oil until the very last moment. This was primarily a function of internal UK politics – PM Theresa May did not want to upset the EU Parliament due to the delicate state of the “Brexit” negotiations.

Nevertheless, the UK’s stance was not helpful for Malaysia. 650,000 Malaysian small farmers were put at risk by the UK’s months of inaction and refusal to oppose the EU’s Palm Oil ban. Whereas others – France, Italy and Spain  – were vocal in their early and consistent support opposing the ban.

Given this inauspicious past six months for UK-Malaysia relations on Palm Oil, the question now is this: will the UK realise the importance of Palm Oil for Malaysia’s trade, and act accordingly?

The starting point is obvious. The EU is planning to push through ILUC and HCS factors for biofuels by February 2019. The factors will designate “High Risk” vs “Low Risk” biofuels: with heavy lobbying underway from MEPs and European industry to include Palm Oil as “High Risk”. It’s likely that a deal has already been done: and this is simply a calculated plan to impose a disguised ban on Palm Oil biofuels in Europe. EU Ambassadors to Malaysia have actually admitted as much, publicly.

This leaves the UK in a key position. Will the UK government support Malaysia’s economic development priorities or will they back the EU’s latest effort to ban Palm Oil? In February 2019, when the ILUC and HCS criteria will be determined, the UK will still be a member of the European Union. It will have a vote, either for or against the EU’s plans.

A new independent trade policy will require the UK prioritising its economic partnerships around the world, including in south-east Asia. This, in turn, will require a new approach in London. For years, UK politicians have been captured by anti-development NGOs such as Greenpeace, Oxfam and WWF – whose goal is to stop Palm Oil exports to Europe. Or – at the very least – for those NGOs to control the Palm Oil supply chain. Successive UK governments have supported the NGOs in this approach – DEFRA, the UK’s Environment Ministry, has made no secret of its wish to have more control over how Palm Oil is produced. This is despite the fact that Malaysia has pioneered adoption of the Malaysian Sustainable Palm Oil (MSPO) standard, in accordance with international ISO standard-setting criteria.

There is a prejudice among these groups and government departments that Palm Oil is ‘bad’ wherever it comes from, regardless of the robustness of domestic regulation and institutions that underpin its sustainable production. This approach will not help the UK with future trade agreements. Malaysia will be seeking improved access for Palm Oil in any future agreement as a minimum, and will expect recognition of MSPO. Anything less will rile Malaysia’s 650,000 smallholders.

Richard Graham MP, along with the High Commissioner Vicki Treadell, and other well-informed officials, no doubt are aware of this. However, Mr Graham’s recent Twitter claim –  that he views Indonesian timber as a template for how the UK will engage with Malaysian Palm Oil – is unsettling. We’re presuming that Mr Graham is referring to the agreement Indonesia signed with the EU: its Voluntary Partnership Agreement (VPA) under the EU’s FLEGT (Forest Law Enforcement, Governance and Legality) Program. This comparison is factually inaccurate.

The FLEGT-VPA agreements surrounding Indonesian timber were focused on legality (in other words, ensuring that timber exported to the EU came from legal sources). Malaysian Palm Oil does not have any comparable legality issues. In fact, some in Malaysia may find that suggestion insulting.

Malaysia has a strong legal and regulatory framework for Palm Oil – arguably the strongest in the world. Land tenure, legal systems, and other structures all exist. Multiple bodies oversee and enforce this framework – including MPOB, MPOA, MTC, FRIM, and MNRE. Malaysia also has developed the MSPO (Malaysian Sustainable Palm Oil) standard – which is not built on arbitrary criteria, but is developed in line with international ISO standard-setting best practice.

Mr Graham is conflating legality (e.g. FLEGT-VPA) with sustainability (e.g. RSPO; HCS; etc). The latter is much more complex – and more political. Why should arbitrary NGO demands be given equivalence with international standard-setting norms? Malaysia’s regulation, and best practice in standard-setting deserves support from the UK, rather than skepticism.

A major concern is that, instead of supporting Malaysia’s commitment to legal & regulatory oversight and standard-setting, the EU is more concerned with finding new ways to undermine Malaysia’s exports. The ILUC & HCS proposals are clear examples of a discriminatory agenda that ignores and tramples on Malaysia’s pre-existing regulations.

This week would be an opportune moment to reaffirm the UK’s commitment to supporting Malaysian small farmers. This should include a confirmation that the UK Government will oppose and vote against any future EU discrimination that targets Malaysian Palm Oil. The ILUC and HCS Regulation will be the first major test of that commitment.

The Oil Palm The Oil Palm

The Myths & Facts of the EU Parliament Development Committee’s Report on Palm Oil

This week the European Parliament’s Development Committee (DEVE) voted on a draft report: “Transparent and accountable management of natural resources in developing countries: the case of forests.”

The report is aimed at eventually imposing a ban on Palm Oil imports into Europe used in the food supply chain.

The report is riddled with errors, omissions and misinformation.  It’s necessary to identify and correct these errors, one by one, to highlight the totality of their misinformation.

MYTH 1: Agriculture is Responsible for 80 per cent of Deforestation Worldwide.

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.

MYTH 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.

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

FACT: It’s a term made up by European NGOs. The draft 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.”

But the term is not officially defined anywhere in European Union communications. In an earlier critique we have pointed out its fundamental flaws.

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 oftentimes dependent on local context.

Global Canopy’s decision to focus on ‘tropical forest ecosystems’ is prejudicial. 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 part by aid agencies such as the 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.

MYTH 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 evidence.

Land rights and human rights violation 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.  Furthermore, much of the Malaysian Palm Oil private sector as well as many small farmers, including organized smallholder associations, have adopted the RSPO scheme (and other specialist schemes, such as the German ISCC).

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 to the WTO.

MYTH 5: The Flawed 33 Documents Cited by the DEVE Committee.

FACT: The authors show little regard for the EU’s trading partners in developing countries. At the beginning of the document, the authors cite 33 documents supporting their claims. Some of them – such as the Consumer Goods Forum – have no legal standing whatsoever; it is a voluntary agreement between corporations.

But there is only one set of documents that will provide guarantees for the EU’s developing country trading partners: the World Trade Organization Agreements.

The WTO Agreements are there to prevent the kinds of actions that the DEVE Committee is trying to implement, specifically unscientific and politically motivated barriers to trade.

There is one other document that isn’t referenced: the Agenda of the UN Commission on Sustainable Development from 2012, which was an internationally agreed communique on sustainable development. That document states that any sustainable development policies should:

  • “Not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade, avoid unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country, and ensure that environmental measures addressing transboundary or global environmental problems, as far as possible, are based on an international consensus.”

Again, this fundamental document – which is a core text for anyone who really cares about alleviating poverty and creating wealth for the poor – is not referenced.

This report makes it clear there is little regard for sustainable development or international consensus.  Despite all its platitudes on international development, the DEVE Committee is clearly interested in only one thing: pushing a politically-motivated anti-Palm Oil agenda, and propping up uncompetitive EU oilseed industries.

The Oil Palm The Oil Palm

Days After Defeat, Europe Renews Its Campaign Against Palm Oil

Today, the European Parliament Development Committee (DEVE) will vote on a report entitled Transparent and Accountable Management of Natural Resources in Developing Countries: The Case of Forests.

The report essentially claims that Palm Oil is the scourge of the world’s problems, and the single largest driver of deforestation.  This is despite the European Commission’s own research consistently proving that this claim is inaccurate.

The vote today in the DEVE Committee is the opening salvo in the latest effort by the EU to ban Palm Oil from the European marketplace. It comes only days after the EU’s plans to ban Palm Oil biofuels were finally rejected. The DEVE Report also serves as the impetus for action by the European Commission to pursue the regulation of Palm Oil based on production methods and claims over supposed links to deforestation.

Understanding the scale of the EU’s ambition to ban Palm Oil is crucial to assessing why this debate is far more wide-ranging and profound than the possible ban of Palm Oil biofuels under RED would have been.


What does the DEVE Committee Want?

MEPs on the European Parliament’s DEVE Committee are putting down a marker on the EU Action Plan on Deforestation, and any future regulatory measure for Palm Oil.

The motion seeks to have the EU introduce:

  • mandatory reporting for all financial investments linked to ‘forest risk commodities’;
  • mandatory due diligence for investments on environmental issues;
  • regulation for imports of all forest risk commodities, similar to the EU Timber Regulation and the Conflict Mineral Regulation, which includes mandatory ‘deforestation-free’ and sustainability criteria, as well as traceability requirements;
  • parallel requirements in the EU’s Common Agricultural Policy in order to lower imports of animal feed; and
  • more Commission action as a follow-up to the EU Action Plan on Deforestation and the study on Palm Oil & Deforestation (see below).

It is important to understand the context of the DEVE report. It provides an insight into where the EU is going with its regulatory plans based on the Action Plan on Deforestation.

When it comes to trade and imports, the EU has demonstrated that it seeks to regulate global supply chains. This is a key goal of EU regulatory policy.

It has done this in various policy instruments for different products. These include: the FLEGT (Forest Law Enforcement Governance and Trade) Action Plan and the EU Timber Regulation for timber; the Conflict Mineral Regulation for mined products; legislation on illegal, unreported and unregulated fishing (IUU) for fish products. It is also present in its REACH (Registration, Evaluation, Authentication & Restriction of Chemicals) regulation for chemicals.

So, if the EU can regulate supply chains for chemicals, minerals, forest products and fish, it can surely regulate agricultural commodities.


The Action Plan on Deforestation

These aren’t new ideas. Plans to block Palm Oil across the board have been underway for some time.

In March of this year, the European Commission released the COWI report, Feasibility study on options to step up EU action against deforestation, which reviewed various policy options available to the EU for combating global deforestation, and secondly, the LMC report, Study on the environmental impact of palm oil consumption and on existing sustainability standards, which looked specifically at the role that Palm Oil plays in deforestation. Collectively, they are known in Brussels as part of the “Action Plan on Deforestation”, which was first conceived in 2014.

With the RED, Malaysia’s position was simple. Any ban or unequal treatment for Palm Oil was unacceptable. The EU’s Deforestation activity is more complex.

The difference is that policymakers will seek to curb all Palm Oil imports, not just banning it from the bloc’s renewable programs. This is far more dangerous.

At the very least it would impact crude palm oil (CPO) exports. At the most, it would hit all products containing Palm Oil and its derivatives.

In addition to crude and refined Palm Oil, it could mean all oleochemicals, too.

If this seems far-fetched, consider the following. When the EU and other countries introduced illegal logging regulations, there was an assumption it would only hit log or rough timber exports. However, it is applied to building materials, furniture, exercise books, and even toilet paper.

In other words, it could mean that it’s not only the plantation and refining sector that’s impacted; all downstream processing could feel the pinch.


What Could the EU Trade Regulations Look Like?

The FLEGT Model

A number of commentators have pointed to FLEGT as a model. FLEGT has two policy legs.

  • The first leg requires EU importers of timber products to undertake ‘due diligence’ to ensure that imported timber products have been produced legally. Due diligence can take a number of forms, including the use of sustainability certification or chain-of-custody certification.
  • The second leg is an environmental trade agreement (a voluntary partnership agreement – VPA) and the development of a ‘legality standard’ for exporting countries. Timber products won’t be exported unless they meet that standard. These products get a ‘green light’ when exported to the EU.

In Indonesia, which is the only country where the FLEGT/VPA system has been introduced, there have been ongoing problems for smallholders gaining access to FLEGT export licenses.

Could such a system be feasible for agricultural commodities, or as the EU calls them, Forest Risk Commodities?

Traceability systems could definitely play a part. The MSPO, for example, is completing its chain-of-custody standard.

Indonesia has pushed the ISPO standard in their negotiations with the EU as part of their free trade agreement or any possible voluntary partnership agreement. This was raised again during negotiations in a special negotiation session devoted entirely to palm oil in February. APINDO, the country’s employer association and one of the most powerful business groups, has made it a key part of its lobbying position.

But feasibility questions remain.

First, the original FLEGT was about illegal logging activity. The DEVE and Action Plan approaches are about deforestation and sustainability.

This is a fundamental difference.

FLEGT has had buy-in from developing countries because it has assisted forestry reforms and regulatory compliance in those countries, and helped recover lost revenue from illegal logging.

These questions do not apply to Palm Oil, especially in countries like Malaysia, which have in place a robust regulatory and compliance system not to mention the addition of MSPO.

Further, ‘sustainable agriculture’ has no internationally accepted definition. But a national standard for sustainability should be acceptable (see below).

Second, if traceability were to apply to all forest risk commodities, would this apply to manufactured goods as well as raw materials?

Third, for this to be consistent with international trade rules, and Europe’s commitment to the WTO, it would require that EU producers also adhere to traceability rules, placing an additional administrative burden on European farmers. It would also need to apply to all oilseeds and commodities – not just Palm Oil. Given that Palm Oil is a relatively small contributor to deforestation – behind beef, maize and soy among others – the EU will need to incorporate all of these ‘forest risk commodities’ into its policies, including its own farmers, Latin American soya and beef producers, American soya and beef producers, Australian beef producers, African Palm Oil producers and so forth.  The list is endless.  In the world of global trading norms and rules, this is called ‘equal treatment.’


The REACH Model

The EU’s regulation on chemicals – REACH – may be another model.

REACH is, as the name states, a regulation that requires the registration, evaluation and authorisation of chemical substances in Europe, their use, and their users and importers. This is upwards of 143,000 different chemicals. It includes registration of use of chemicals by companies that do not appear in the end product. It was introduced in 2000 and passed into law in 2007. Users and manufacturers of chemicals – including those exporting to the EU – are required to comply with any number of bureaucratic requirements that have added considerable expense to many manufacturing operations.

When it was introduced it was highly controversial; it was considered overly expensive by producers, exporters and importers. It was raised no less than 15 times at WTO meetings by the EU’s major trade partners.

The costs on European business appear to be of little concern. One official review stated:

  • “REACH compliance costs also appear to have had a negative impact on rates of return on investment, while uncertainties about actual costs and their timing in the case of new substances/ uses have not helped financing decision-making in general … the issues around compliance and related costs and constraints make some non-EU locations more attractive for undertaking innovative activities. It appears that some delocalisation of innovation has occurred, but REACH has not always been the only or main driver.”

The American Chamber of Commerce to the EU (AmCham EU) more recently stated:

  • “REACH has created very expensive regulatory market barriers with no equivalent in the world. While this obstacle does not discriminate between substances manufactured in Europe and imported ones, REACH compliance costs are often too high for small and medium enterprises (SMEs), which are critical to EU innovation clusters, or for new chemical substances in small volumes which may not be able to provide a return on this initial investment.”

There has been little in the way of evidence that REACH has provided any significant social and environmental benefits to the EU’s citizens.

The conclusion to be drawn is that when it comes to environmental regulation, EU lawmakers appear to have very little concern for the costs on European business or the potential impacts on their trading partners.

The idea, then, of having all importers and users of ‘forest risk commodities’ in the European Union register themselves, the ingredients they use and having them undertake an assessment of ‘forest risk’ or ‘sustainability risk’ is not inconceivable.

Nonetheless, it would be difficult for the EU to justify internationally. This is not chemicals, but agriculture, which is the most sensitive trade negotiation issue of all. Agriculture can be considered the reason that the Doha Round in the WTO was never completed.  Europe’s trade and agriculture negotiators know this. But do the rest of the Commission directorates fully appreciate this?


Palm Oil Producer Response

There are three core elements of a response.

First is the place of certification, and more specifically national standards. Europe must accept the MSPO standard.  The MSPO standard defines sustainability for Palm Oil in the Malaysian context. MSPO has been developed according to ISO (International Standards Organization) practices. The EU will need to recognise anything that is certified by MSPO as sustainable.

Second is fighting discrimination. Any action by the European Union should not single out Palm Oil. If the EU’s objective is reducing global deforestation, it must ensure that it is tackling the main drivers of deforestation.  The EU’s own research shows that Palm Oil comes well behind other commodities – beef, maize, soybean, among others – in terms of being a contributor to deforestation.

Third is defining ‘forest risk’. The EU uses the term ‘forest risk commodities.’ There is no accepted international definition for FRCs. ‘Forest risk’ is about countries, not commodities. For example, beef from Brazil could be a ‘forest risk commodity’, but beef from the US – or the UK – is not. This is a slippery slope for the European Commission, especially the Trade and Agriculture directorates.

Fourth is the commitment to free trade. The proposals by the EU will run into problems with WTO rules. The General Agreement on Tariffs and Trade (GATT) allows some environmental protection exceptions, but with major caveats. They include that any trade measure introduced must be necessary, i.e. there must be no better alternatives to solve the problem.  In addition, the environmental protection exceptions are for the most part about solving domestic problems, not international ones. For example, the EU could block imports of a product if that product put the EU’s forests at risk. Key to this is Europe’s leadership role in global trade: it can either adopt an imitation of Trump’s trade strategy or be the beacon of free trade. This will be a big test for Brussels.


Looking Beyond the DEVE Committee

Pressure has been building on the Commission to take further action on deforestation for nearly four years. The DEVE Committee is adding to this pressure. The Motion will likely be passed.

Individual Member States will add to this in the future. At an EU deforestation meeting last year, the German Agriculture Ministry called on the EU to move forward with the Action Plan.

The Commission has a feasibility study on the Action Plan for Deforestation. The next step will be an impact assessment of the options – which is what the DEVE Committee is calling for. This could be launched before the end of the year. Green MEPs and activists will use this as a platform to bolster their case ahead of Spring 2019 elections.  Within two years – at the beginning of 2020 – we could see draft legislation. This would coincide with the implementation of the new Renewable Energy Directive.

The Oil Palm The Oil Palm

Europe: A High-Level Peat CO2 Emitter

The European oilseed industry, through the voice of a small group of rapeseed biofuel associations and companies from Czech Republic, Hungary, Poland, Slovakia, Lithuania, Latvia and Bulgaria, has once again attacked Palm Oil’s place in European biofuels policy.

Their new line of attack is that Palm Oil’s relationship with peat soils means that it should be left out of the Renewable Energy Directive (RED). A similar line is being pursued by MEPs from the same countries as they continue to negotiate with the Commission and the Council ahead of the next Trilogue on June 13.

At the core of their claims is that “palm oil is the only biofuel feedstock whose expansion is synonymous with soil oxidation.”

This is simply untrue – just ask Germany. German maize has been planted on peatland across Germany as a feedstock for biogas.   Maize is also a key ingredient in animal husbandry which itself accounts for some of the largest agricultural emissions in Europe.

There are plenty of myths around Palm Oil and peat in the EU that should be debunked. This is the latest example of a long history of hypocrisy out of Europe against South East Asian Palm Oil.

MYTH: Peat CO2 emissions only take place in tropical Southeast Asia.

FACT: Russia has the largest peat stocks in the world, followed by Canada and Indonesia. Countries in Europe such as Finland, Sweden and Norway have larger peat stocks than Malaysia, as do many other countries around the world, including the US, China, Sudan, Brazil and Peru.

According to some studies the European Union has relatively high levels of emissions from degraded peat. The most comprehensive study considers the European Union to be the second-highest source of peatland degradation emissions. The study confirms the “EU as a source of carbon dioxide emissions from peatlands drainage that it is largely due to agriculture and forestry”. This is higher, for example, than Malaysia. The largest emissions come from Finland (50 million tons), Germany (32 million tons) and Poland (24 million tons).  In combination these are significantly larger than Malaysia’s (48 million tons), according to the study.

MYTH: Peat CO2 emissions only happen when peat is drained.

FACT: Peat degradation emissions take place when peatlands are used for agriculture. This is widespread around the world – including in the European Union.

In Germany around “7.3 per cent of agricultural land is peatland – but this is responsible for more than 30 per cent of agriculture emissions in Germany”. EU-wide, it is estimated that peat is responsible for 90 per cent of the EU’s agricultural soil-based emissions.

It is also the case that peatlands are being used in Germany to grow maize, which is then used as a feedstock for biogas.

MYTH: Peat CO2 emissions only happen on the ground.

FACT: Peat is used in many European countries as a fuel source. It is cut from the ground (producing greenhouse emissions) and then burned as a source of either heat energy or for electricity generation. The largest producers of peat (for fuel) are Finland, Ireland, Sweden and Germany – all EU countries. The emissions profile of peat is slightly higher than that of coal. In Finland, around 6 per cent of all electricity produced comes from peat burning. In Ireland this figure is closer to 11 per cent.

MYTH: Oil palm cultivation on peatlands in Malaysia is extensive.

FACT: False. The most recent public studies of oil palm planting on peatland in Malaysia took place in 2010. According to the RSPO, 14 per cent of all oil palm in Malaysia was established on peatlands. A satellite study undertaken by the NUS in Singapore put it closer 11 per cent.  Total forest area on peat soil (including peat swamp forests and regrowth i.e. regenerated forests) was more than three times that of palm plantations according to this study.

MYTH: Peatland emissions in tropical countries take place only for oil palm cultivation.

FACT: According to the NUS study, in Malaysia, the area of peat soils considered as ‘Mosaic’ – a combination of agroforest, small-scale agriculture, degraded land – is larger than the peatland used for Oil Palm plantations.

MYTH: Emissions from tropical peat are well understood.

FACT: There are significant gaps in knowledge when it comes to tropical peat. The most recent estimates consider peat emissions from Indonesia to be significantly lower than previously thought – less than half and in some cases less than one-third of previous estimates.  In other words, there are significant gaps in knowledge that need to be taken into account for any revisions under the RED – particularly if they’re going to take peat into account.

When the European Commission first started examining the peat question for RED I in the 2000s, gaps in knowledge around European peat were large; they simply assumed that it was a problem that only existed outside of the EU. Now European regulators are beginning to understand the magnitude of the problem in Europe. In 2016, the German government started publishing commissioned work on the contribution of peatland to Germany’s emissions. They are talking about pursuing accounting options under the UNFCCC and even incorporating peat emissions into the EU ETS framework.

Before European groups – and MEPs – start beating the peat bandwagon drums, they will need to look at what is happening in their own backyards.

The simple conclusion is this: It is simply false for anyone in Europe whether they be an MEP or a lobby group to attempt to justify a ban on Palm Oil biofuels based on arguments of “peat exploitation” or “soil oxidation”. These are practised in Europe, and elsewhere, extensively. The ‘peat’ argument has no intellectual or scientific merit. Those in favour of the Palm Oil ban are clearly getting desperate.

The Oil Palm The Oil Palm

New Research: European Jobs & Exports at Risk if the EU Restricts Palm Oil Biofuels

Kuala Lumpur (11 June 2018) – Today, the Malaysian Palm Oil Council (MPOC) released new economic research that quantifies the negative impact to major European economies should the EU move ahead with proposed restrictions on Palm Oil biofuels under the Renewable Energy Directive (RED).

The research finds that almost €40 billion of EU exports and over 350,000 jobs across Europe depend on trade with Palm Oil-producing countries.

Today, EU Energy Ministers are meeting in Luxembourg to discuss a new French Government proposal that would impose a freeze on Palm Oil biofuels under the RED. Such discrimination could lead to negative trade consequences for both Malaysia and for major EU exporters.

The economic research was carried out by the renowned Danish consultancy, Copenhagen Economics (CE). CE is a long-time consultant to the European Commission on a vast array of economic and scientific topics.

Key findings of the new report:

  • At least 354,000 EU jobs are dependent on trade with Malaysia, Indonesia and Thailand.
  • €39.5 billion of EU exports across key industrial sectors are dependent on trade with Malaysia, Indonesia and Thailand.
  • Up to 18,000 EU jobs are at risk from trade retaliation if the ban on Palm Oil biofuels comes into place
  • Germany could lose up to 5,640 jobs and €626 million in exports if the ban on Palm Oil biofuels comes into place
  • UK could lose up to 1,752 jobs and €194 million in exports if the ban on Palm Oil biofuels comes into place
  • France could lose up to 2,787 jobs and €309 million in exports if the ban on Palm Oil biofuels comes into place
  • Italy could lose up to 1,737 jobs and €193 million in exports if the ban on Palm Oil biofuels comes into place
  • Spain could lose up to 785 jobs and €87 million in exports if the ban on Palm Oil biofuels comes into place

The following statement can be attributed to Martin H. Thelle, Managing Director and Partner at Copenhagen Economics:

“It is clear that significant jobs and exports earnings across the EU are dependent on trade with Malaysia, Indonesia, and Thailand. Europe’s trade with Malaysia, Indonesia and Thailand accounts for €39.5 billion in exports, supporting at least 354,000 jobs in the EU. Any reduction in trade could have a significant impact on key export sectors including aircraft, automobiles, pharmaceuticals, and electronics. The countries most dependent on trade with Malaysia, Indonesia and Thailand are Germany, France, U.K., Italy and Netherlands. A reduction in trade of 2 billion EUR could impact 18,000 jobs across Europe that are dependent on this trading relationship.”

Dato’ Haji Aliasak Haji Ambia, President, National Association of Smallholders (NASH) Malaysia stated:

“Any EU ban or cap on Palm Oil biofuels is a discriminatory action against the hundreds of thousands of small farmers across Malaysia. The Governments of France and Italy promised that there would not be discriminatory treatment against Palm Oil. Those promises must be honoured. Attempts to camouflage this discrimination behind technical calculations are deceitful. Europe is now adopting Trump-like trade tactics that violate WTO rules. The EU cannot credibly claim to be a defender of global trade if this discrimination against Palm Oil is adopted.”

To read the report and learn more, visit here.

The Oil Palm The Oil Palm

MPOC Chairman: Malaysia is a Global Leader in Agricultural Innovation and Environmental Protection

Kuala Lumpur (24 May 2018) – MPOC Chairman Dato’ Lee Yeow Chor today delivered a keynote address to the Alliance of Conservatives and Reformists in Europe (ACRE), describing how Malaysia is a global leader in both agricultural innovation and environmental protection.

The ACRE “Blue-Green” Summit in Brussels focused on how markets and industry can drive environmental solutions. Members of the EU Parliament and senior EU Commission officials participated in the Summit, as well as business leaders and academics from across Europe.

Dato’ Lee highlighted that the EU‘s proposed ban on palm oil biofuels undermines Malaysia’s successful focus on sustainability:

“The proposed EU ban on palm oil biofuels will have a negative impact on sustainability in both economic and environmental terms. It is also highly protectionist: EU-grown crops will be allowed but palm oil – the only oilseed crop grown primarily in the developing world – will be excluded. I urge everyone in this room to ask why the EU is doing this, when simply allowing market activity to determine which feedstocks are used is proven to be a better route.”

Datuk Franki Anthony Dass, Chief Value Officer at Sime Darby, explained the benefits of private property rights and how private industry drives sustainability in Malaysia:

“Giving of land to small farmers gives them incentive to protect the environment and their community. It gives them a stake in the future including providing education for future generations.

“Poverty is one of the greatest drivers of environmental destruction. Areas in Malaysia with successful oil palm sectors, including property rights and prosperity for small farmers, often also have the best environmental protection track-records.”


The Oil Palm The Oil Palm

EU Fails to Learn Lessons From Past RED Failings

Errors in EU’s GHG calculations identified by German researchers in 2011 & 2012 have never been corrected in Brussels

Much of the current debate around the Renewable Energy Directive (RED) treatment of palm oil is focused on trade: the fact that the proposed ban on palm oil infringes WTO rules; that RED may lead to a wider trade war; and that existing business contracts may even be at risk.

Aside from the international ramifications, it is worth revisiting the science behind the RED – and in particular the science relating to palm oil. This is the third iteration of the RED: and it is instructive to examine errors from those earlier EU Directives, that have not been corrected.

Palm Oil producers have consistently argued that the greenhouse gas (GHG) savings of Palm Oil were undervalued in the EU’s calculations. This undervaluing negatively impacts Palm Oil’s position within the EU marketplace, compared to competitor oils.

How are these values determined?

The RED judges the environmental benefits or harms of different biofuel feedstocks through calculating ‘typical values’ and ‘default values’, which represent the EU’s opinion on the level of GHG savings that each feedstock contributes.

Therefore, the current RED’s default value of 25% (illustrated in the table below) for Palm Oil indicates that the EU would apply the assumption that Palm Oil saves 25% of GHG emissions, compared to fossil fuels. It is interesting to highlight that the values for rapeseed oil are amplified, and significantly inflated compared to those of Palm Oil. This has been the case throughout all iterations of the RED, which is both strange and worrying.

Why is it strange and worrying? Because the EU’s calculations were proved wrong as far back as 2011-2012.

Two studies published by scientists at the University of Jena, in Germany, in 2011 and 2012 identified major flaws and significant errors in the RED calculation of oilseed GHG savings. Drs Gernot Pehnelt, and Christoph Vietze’s independent analysis Recalculating Default Values for Palm Oil concluded that the EU has consistently under-valued the GHG savings of Palm Oil, and over-valued the GHG savings of rapeseed. They  concluded that a more accurate default value for Palm Oil is between 37.3% and 45.5% – far exceeding the 19% default value given to Palm Oil under the original RED and also exceeding the 25% default value given to Palm Oil under the current RED revision.

The table below sets out the most simple method of summarising the papers’ findings.


  Initial RED default value RED Revision Default Value University of Jena Report GHG Savings Calculation
Palm Oil biodiesel without methane capture 19% 25% 37.3% – 45.5%
Palm Oil biodiesel with methane capture 56% 51% 76.4%
Rapeseed biodiesel 38% 47% 28.0% – 42.1%
Sunflower biodiesel 51% 52% n/a
Soybean biodiesel 31% 50% n/a

What does this mean in practice?

First, these initial errors in the EU’s calculations added up to an unfair discrimination against Palm Oil within the RED Directive. The German study concluded that the EU’s Joint Research Centre (JRC) calculations were biased in favour of EU-grown rapeseed and against imported palm oil. The authors wrote a damning assessment:

“Unfortunately, the conclusions of this analysis demonstrate that the methodology employed by the JRC lacks credibility, and subsequent efforts to gain further clarity from the JRC were not successful. As a result, the authors of this report support the efforts by environmental NGOs to gain further clarity on the European Commission’s and EU’s calculations and deliberations on the assessment of biofuels, and institute greater transparency in the process.”

 “Based on the standard calculation scheme proposed by the Renewable Energy Directive (EU 2009) … we cannot reproduce the default values for palm oil biodiesel given in the annex of the RED. In contrast, our results indicate default values for the GHG emission savings potential of palm oil biodiesel not only far above the 19 percent default value but also beyond the 35 percent threshold. Our results confirm the findings by other studies and challenge the official default values published in RED. These findings … give cause for serious concern within the EU community regarding the viability of the system to effectively deliver the GHG emissions savings that are required in the legislation.”

 Second, a separate detailed examination Uncertainties about the GHG Emissions Savings of Rapeseed Biodiesel, focused on the rapeseed values given by the JRC, found that they had been over-stated – thereby doubling the bias in the RED text.

The authors explain:

“In most of the scenarios, rapeseed biodiesel does reach the GHG emissions saving values according to RED. Neither the RED typical value for rapeseed oil (45%) nor even the lower default value (38%) can be approved by our analysis.

 “Furthermore, the most of our scenarios indicate that rapeseed biodiesel does not reach the 35% threshold required by the EU Directive for being considered as sustainable biofuel. In our standard scenario, we calculate a GHG emissions saving value of not even 30% which is not only well below the GHG emissions saving values (default and typical) that can be found in RED but also far below the 35% threshold.

 “To summarize, we are not able to reproduce the GHG emissions saving values published in the annex of RED. Therefore, the GHG emissions saving values of rapeseed biodiesel stated by the EU are more than questionable. Given these striking differences as well as the lack of transparency in the EU’s calculations, we assume that the EU seems to prefer ‘politically’ achieved typical and default values regarding rapeseed biodiesel over scientifically proven ones”

The cumulative impact of the scientific analyses on different feedstocks illustrate that the scientific process is flawed at best (highly biased at worst), and that political decision-making to favour EU oilseeds is driving RED.

Most importantly for the current RED debate, it is clear that these errors and biases have not been addressed or corrected in the 7 years since they were first discovered and established; meaning that the same discrimination against Palm Oil continues today.

The clear suspicion is that such a major error is not simply an oversight but rather a deliberate attempt to undermine foreign oilseeds entering the EU market. If it was a genuine mistake back in 2011 then surely the EU Commission would have corrected by now? They have not done so: the errors have become a permanent, underlying part of the RED. The only sensible conclusion is that Brussels is comfortable – perhaps even happy – with the distorted calculations and is therefore never planning to correct them.

While the University of Jena academics focused on the scientific methods and calculations behind the RED, other experts have addressed the political causes of discrimination against imported oilseeds.

Brussels think-tank the European Centre for International Political Economy (ECIPE) analysed the RED as a potential trade barrier in 2012. In The Rising Trend of Green Protectionism, author Fredrik Erixon wrote:

“The only way to raise barriers to foreign competitors is to engineer non-tariff barriers. Unsurprisingly, this is exactly what the RED may do. It is, in trade policy parlance, a technical regulation that has laid the ground for closing off the EU market for the two main [imported] competitors to biodiesel made of [EU-grown] rapeseed: soybean oil and palm oil. The Renewable Energy Directive adds a new type of policy to Europe’s box of trade restrictive measures in biofuels: a production and process methodology standard.

 “Regulating sustainability in the biofuels sector is no doubt a legitimate policy. But the design of RED does it in a way that will be ineffective and clash with important rules of world trade”

Again, this inbuilt bias has not been corrected – and the same harmful approach can be viewed clearly in the current RED proposal.

Clearly, this all has a negative impact on Palm Oil producers – and on 650,000 small farmers in Malaysia who rely on the crop. However, the persistent errors and discriminatory calculations against Palm Oil over the years – left uncorrected – have led to where we find ourselves today. Facing a potential total ban on Palm Oil biofuels inside the EU.

Such a ban would harm consumers (driving up prices); harm the environment (more land would be cleared for other oils to replace Palm Oil); and it would harm the entire objective of the RED (harming the ability of Member States to achieve their GHG reduction targets)

Science-based policymaking should be at the heart of any renewable energy policy, anywhere in the world – and a critical element to the scientific method is understanding past errors and correcting them for the future. The EU has failed to do this, and continues to cling to the flawed, dis-proven methods of the past. As long as this persists, no-one in Brussels can seriously claim to be an ‘honest broker’ when it comes to Palm Oil biofuels.

The Oil Palm The Oil Palm


The BBC’s upcoming documentary on orang-utans entitled Red Ape is being heavily advertised and trailed in the UK media. One of the documentary contributors, Dr Ben Garrod, has written a highly emotional – but highly unscientific – blog about the BBC’s work on orang-utans.

Unfortunately, the blog contains basic factual errors that are disproven with even a basic understanding of the latest scientific and international research. Of many examples, four stand out that require fact-checking.

Claim by Dr Ben Garrod and BBC: “It says ‘Palm Oil’ on the ingredients then that’s a choice you can make, but often it slips under the consumer radar as ‘vegetable oil’.”

Fact: This is incorrect. European Union law (EU Regulation 1169/2011) requires all vegetable oils to be specifically labelled: the term ‘vegetable oil’ alone is no longer allowed, by law. Palm oil – and all other vegetable oils – are individually labelled. Dr Garrod is scaremongering and misinforming the public.

Claim by Dr Ben Garrod and BBC: “We need to ensure that no more tropical forest habitat is razed to the ground to make way for endless fields of this almost uninhabitable monoculture”

Fact: Tropical forest is not being ‘razed to the ground’ in Malaysia. That is an established scientific fact, backed up by the official United Nations’ flagship Global Forest Resources Assessment study. The U.N. confirms that Malaysia’s forest cover is actually increasing. Over 54% of Malaysia’s land is protected as forest area.  Maybe Dar Garrod forgot to check out his backyard: there is not much forest left in the UK – 11% as a matter of fact.

This is not happening by accident: the Malaysian Government committed to forest protection at the Rio Earth Summit, and is delivering on that promise. Malaysian companies are focused on increasing yield and improving productivity. Burning of forest is illegal in Malaysia and is punished under strict laws.

Claim by Dr Ben Garrod and BBC: “The truth is that every year, there is less and less forest in South East Asia. The truth is that Palm Oil production can claim a lot of responsibility”.

Fact: This is wholly inaccurate and misleading. Malaysia’s forest area is increasing – as confirmed by the benchmark U.N. assessment.

Moreover, on a global level, palm oil is a tiny contributor to deforestation. The European Commission undertook a comprehensive research study that identified the largest drivers of deforestation: these are beef and livestock; soy cultivation; maize; and other oil crops. Palm oil is linked to only 2.5% of deforestation – beef is ten times larger, soy is more than double, and maize is also significantly larger.

The facts are clear: identifying palm oil as a major cause of deforestation is scientifically inaccurate. Dr Garrod is scaremongering, and misleading the public.

Claim by Dr Ben Garrod and BBC: “The truth is that orang-utans are on a knife-edge right now, staring into the precipice of extinction. Their numbers are dropping, their homes disappearing”.

Fact: This is a gross-oversimplification. First – orang-utan in Malaysia are not on the precipice of extinction: the latest NGO research and scientific population studies make this clear. Any claim of ‘precipice’ or ‘extinction’ is pure scaremongering.

Second, in areas such as Sabah, Malaysia, orang-utan numbers are stable, and some populations are growing. Why? Because Malaysia has made the orang-utan a protected species and enforces this law with tough penalties.

Palm oil and orang-utan co-exist successfully in Sabah, Malaysia. Since 1999 protected forest area has doubled in Sabah – and orang-utan numbers are stable. Over the same time period, the palm oil sector has expanded and has created prosperity for local people.

Dr Garrod’s insinuation that palm oil equals to orang-utan loss is provably untrue. The data are extremely clear. Dr Garrod is simply scaremongering, and misleading the public.

Here’s the facts:

  1. There are more orang-utan than previously thought.

Population estimates for the Sumatran orang-utan have more than doubled. In 2016 results of a population survey indicated that there are more than 14,600 Sumatran orang-utans in the wild. The previous estimate from 2008 had put the figure at 6,600. Environmentalists, however, did not take the news as positive. The response? “But with more orang-utans, there were also more to be lost.”

2. Any population decline can’t be attributed to palm oil alone.

In Malaysia, a large percentage of oil palm plantations are on Peninsular Malaysia.  Guess what BBC and Dr Gerrod: no orang-utan have ever lived in that region, so the palm oil from those areas clearly has zero impact on orang-utan.

A report published earlier this year states that conversion of forests to plantations – for pulp and paper, farming and palm oil – plays a very minor role in the decline of orang-utan populations. The report actually states that hunting is the leading and major driver of orang-utan population loss. The palm oil connection is a massive (and inaccurate) scare campaign, pushed by groups such as Greenpeace, who want to effectively ban palm oil use in Western countries.

3. Not all populations are under threat.

In Sabah, Malaysia, a number of orang-utan populations are stable. Some research has found that populations in some communities are increasing. More than that, these populations are in areas that are supported by palm oil plantation companies.  What does this mean? It means that if governments, companies and communities have the resources to conserve nature, they will. Lifting communities out of poverty is critical to conservation: palm oil is the greatest driver of poverty alleviation across South-East Asia.

4. Conservation strategies do work, and they can co-exist with palm oil.

Sabah, for example, has more than doubled its protected forest areas since 1999, from 839,385 ha to 1,906,896 ha. This has increased the area of orang-utan’s protected habitats by 75%; according to a study released earlier this year, estimated orang-utan deaths in Sabah have been relatively small compared with other areas. Sabah arguably has the strongest research and conservation programs for orang-utans. It has worked with other research institutions and NGOs.

Here’s a question on the mind of The Oil Palm: Will the U.K. Government stand with a minority of British activists and protectionist forces ahead of the vote to ban Palm Oil in RED or will she realize that hiding behind Brussels is over now that the UK has to chart her own path globally, and especially in South East Asia, following the Brexit vote?

Let’s see.

The Oil Palm The Oil Palm

Radio Télévision Suisse is like Swiss Cheese: Full of Holes

Radio Télévision Suisse (RTS) is spreading lots of Fake News these days about Malaysia and Malaysian Palm Oil.  Their reporting is a lot like their famous cheese: full of holes!

Led by the famous Swiss YouTuber, “Le Grand JD” (we’ve never heard of him) and “journalist” Bernard Genier, they “investigate” alleged risk to tropical forest and indigenous people in Borneo – more precisely in Sarawak, Malaysia – from oil palm plantations.

It is part of a campaign to see the European Union ban palm oil biofuels under the revision of the Renewable Energy Directive currently being debated in Brussels.  Six Swiss Cantons – Geneva, Vaud, Thurgau, Bern, Jura and Fribourg – oppose Palm Oil because they are strongholds for rapeseed farmers.  RTS has fallen for their protectionist trap.

Despite making wild claims that ‘forests are disappearing’, the Swiss seem to spend most of their time trekking through vast, dense jungle in Sarawak providing clear evidence that, well, there is lots of forest in Sarawak!

The errors in this film are so egregious, that they require a point-by-point correction.


Error #1: ‘Borneo is the worst case of deforestation on the planet, leading to the disappearance of pristine forest’ (01m14).

Fact: In 2012, the EU published comprehensive research that showed that Palm Oil is a very small contributor to global deforestation. Beef and livestock are around ten times larger; soy is more than double; and maize is also larger. Any claim that palm oil is somehow a major cause of deforestation is demonstrably untrue and inaccurate.


Error #2: ‘There is no biodiversity left’ (02m31)

Fact: This is false. Ten per cent of Sarawak’s landmass territory is designated as either under the status of national park or wildlife sanctuaries, broken down as follows:

  • 593,284 hectares of protected areas
  • 25 national parks covering 385,056 hectares
  • 8 nature reserves covering 1,767 hectares
  • 5 wildlife sanctuaries extending over 206,460 hectares

Sarawak boasts a remarkable diversity of wildlife including the hornbill; langurs and monkeys; clouded leopards; crocodiles and one of the world’s largest population of orang-utans. In fact, the total size of Sarawak’s national parks and wildlife sanctuaries is bigger than the total forest area in the U.K.


Error #3: ‘Currently, in Borneo and Sarawak, there is only about 5% of pristine forest left’ (03m58)

Fact: In Sarawak, 6 million ha of forest is considered permanent reserved forest. This forest area is approximately one and a half times the size of Switzerland. Sarawak (and Malaysia as a whole) set strong standards at the 1992 Earth Summit in Rio de Janeiro with a commitment that forest area will not fall below 50%. Sarawak, and Malaysia, are meeting that commitment today.

The FAO states that Switzerland’s forest area is around 30 per cent of its total land area. Switzerland’s primary forest – so-called ‘pristine’ forest – is just 3.2 per cent of its total land area. Malaysia’s pristine forest area is 23 per cent. Almost a 20% difference!!


Error #4: ‘The forest is disappearing, piece by piece’ (11m30)

Fact: Malaysia is a strong advocate of the environment and natural habitat. Malaysia continues to maintain 54.9% of its land area under forest cover, which exceeds Malaysia’s commitment of 50% at the Rio Earth Summit in 1992. This is far higher than forest cover in Switzerland of only 31.7%.

It should also be noted that at one point Switzerland’s forest cover was as low as 10 per cent. Why? Because Switzerland cuts its forests for log exports to other countries. It was only once the country gained enough wealth that Switzerland began to reverse its forest decline.  Key word: “wealth.”


Error #5: ‘Indigenous lands are at risk from palm oil companies’ (20m00)

Fact: In addition to the recognition of indigenous peoples, Sarawak constitutional law recognizes certain land and resource rights under Native Customary Rights (NCR). These include the rights to native land, which recognizes the rights of indigenous peoples to their traditional land.


Error #6: ‘Many NGOs, including The Bruno Manser foundation, are making campaigns to fight for the rights of the Penan’s land’ (13m11)

Fact: The Bruno Manser campaign are an opportunistic and misleading NGO that seeks to exploit the Penan for their personal agenda.  The establishment of NCR requires the establishment of these rights through evidence of settlement, e.g. cultivation of plants or husbandry of animals. In the view of nomadic Penan, NCR should extend to all lands through which they undertake hunting and gathering activities. This presents a significant administrative problem for Sarawak in terms of determining fixed boundaries for any NCR claims.


Error #7: ‘In the next 10 years, Borneo’s tropical forest would have disappeared’ (21m50)

Fact: This claim has zero credibility. Over the past 20 years, conservation advocates have made a series of extreme claims about rainforests in Borneo. In 2001, it was claimed all lowland forests in Borneo will have disappeared by 2010. Another claim was made in 2007 that the same forests would be gone by 2018. Clearly, neither have happened.


Error #8: ‘Eco-Responsible/Sustainability doesn’t exist when it comes to Palm Oil’ (23m02)

Fact: Malaysia is a world-leader in sustainably produced Palm Oil, and the country’s national standard, Malaysian Sustainable Palm Oil (MSPO), will come into full force in 2019. MSPO is additive to existing Malaysian law, and addresses  environmental, social and economic aspects of Palm Oil production, cultivation and processing methods, as well as forest and wildlife protection.


Error #9: ‘Today, modern Palm Oil means less pristine forest’ (23m12)

Fact: 5.81 million hectares are planted with oil palm in Malaysia, which accounts for 17% of Malaysia’s land area (out of a total of 23.8% of agricultural land area in Malaysia). This equates to only 0.11% of the total global agricultural area. New area planted with oil palm in Malaysia has remained flat in recent years. Meanwhile, Malaysia’s forest area is increasing, confirmed by the latest official United Nations FAO Global Forests Resource Assessment report. The FAO states that Switzerland’s forest area is around 30 per cent of its total land area. Switzerland’s primary forest – so-called ‘pristine’ forest – is just 3.2 per cent of its total land area. Malaysia’s pristine forest area is 23 per cent. Almost a 20% difference!!


Error #10: ‘Orangutans are on the brink of extinction’ (24m01)

Fact: False! A recent report says that conversion of forests to plantations – for pulp and paper, farming and oil palm – plays a very minor role in the decline of orang-utan populations. The report actually states that hunting is the leading and major driver of orang-utan population loss. The Palm Oil connection has been pushed in the media by Green groups.

The International Union for the Conservation of Nature (IUCN) estimates that in 2008 the population of Bornean orang-utans was 104,000.  In 2010, over 59% of Borneo forests were classified by IUCN as “suitable habitat” for orang-utan.

The IUCN provides no data to support any theory of orang-utans going extinct – proving that ‘LeGrandJD’ has no evidence for his wild claims about the orang-utan.

The IUCN states that orang-utans are critically endangered. However, government and the palm oil industry in Malaysia have undertaken considerable efforts to set aside greater conservation areas and put resources into conservation programs.

The IUCN also notes that Switzerland is hardly a model for species conservation – particularly for one of the world’s wealthiest countries.

More than 250 species have become extinct in Switzerland. Sad! The IUCN notes more than 500 critically endangered species in Switzerland. Sad! One NGO estimates there are around 50 of these species that are endemic to Switzerland. Sad!

Swiss ‘journalists’ should consider what is happening in their own back yard before lecturing developing countries on wildlife management.

The Oil Palm The Oil Palm

Branson Weighs in on Palm…and Fails

Richard Branson is a smart and successful businessman.

Part of his success has relied on brash, big initiatives. He is opportunistic when he needs to be. And simplifies things to hit the broadest market (otherwise known as the lowest common denominator).

Which is precisely why he shouldn’t talk about palm oil.

Sir Richard has taken to the Virgin Group’s website to lament forest loss and orang-utan loss in the Leuser Ecosystem in Sumatra, Indonesia.

He’s lined up with Friends of the Earth and the Rainforest Foundation of Norway – a group funded by fossil fuel interests – to attack small farmers in the developing world.  How neocolonial of him.

While there is no question that the Leuser Ecosystem is worth conserving – Sir Richard points the finger solely at palm oil. And he then suggests that solutions such as RSPO certification and Unilever’s procurement policies are a kind of magic bullet.

To the uber-wealthy CEO of a large, Western company, the problem and the solution seem simple. That’s because he doesn’t understand what he doesn’t know. To anyone who actually has to deal with the problems, the political and economic realities are much more complicated.

Why is Sir Richard so wrong?

First, protecting natural environments requires money because, let’s face it, the private sector doesn’t establish national parks.

This means resources need to go into proper demarcation and surveys, enforcement and compliance. And on top of that, people either need land to grow crops, or they need jobs to support themselves.

Second, the problems of environmental degradation in developing countries aren’t that simple, and they don’t just belong to palm oil. Encroachment in national parks and sensitive ecosystems happens because people are poor. These people will cut down trees and grow crops. If a large company takes a responsible view and doesn’t cut where it isn’t supposed to and certifies according to RSPO (or other) standards, it doesn’t actually stop the encroachment in the national park.

If palm oil was banned everywhere tomorrow, would this stop deforestation? No, because people would grow something else.

Third, as we’ve stated many times before, a procurement policy such as Unilever’s cuts smallholders out of supply chains. This can actually have a perverse effect. If smallholders are cut from these supply chains, they may actually need to cut down more forest to make up for a revenue shortfall as they have one less buyer in the marketplace. Disenfranchising poor people in this way is therefore undesirable practically – but also ethically. Western billionaire attacks poor Asian small farmers: not a good look.

Fourth, and finally, if the Leuser Ecosystem is having problems with deforestation, it simply does not follow that all palm oil is bad.

So why has Branson jumped on the palm oil bandwagon?

There are possibly a few reasons.

First, there is history of this type of elitist thinking emanating from London; look no further than Prince Charles’ environmental crusades globally.  It’s driven by an ideology of ‘we know what’s best for you’.  A good history lesson, starting with the American Revolution, provides some answers on how to respond.

Second, the EU looks set to push back on its renewable fuel mandate in some way, shape or form. Environmental groups have generally been supportive of some sort of curb, particularly on palm oil, if not the entire biofuels sector. Branson made a significant pledge to biofuel development more than a decade ago (see below). Branson has in the past associated himself with groups such as Greenpeace and WWF.  Virgin’s airlines need to be seen on the fashionable side of the European debate here.

Third, Branson’s environmental record is actually patchy. Although Branson has been a champion of biofuels and was more than happy to get on the Copenhagen train in 2009, the actual commitments of Branson and Virgin have been quite slim. Here are some examples.

  • In 2006, Branson pledged $3bn in biofuels development as a way of curbing oil and gas demand. That number ended up being around 3 per cent of that total;
  • A few years later, he launched the Virgin Earth Challenge, a $25 million prize to come up with commercially viable ways to sequester carbon. As far as we can tell that prize was never awarded.
  • Around the time of Copenhagen climate conference he launched – with much fanfare, of course, the Carbon War Room. This was simply more efficient business processes (e.g. minimising energy use). This is no longer in existence.

But ultimately what needs to be remembered is that the bulk of Branson’s business fortune has been built on the burning of fossil fuels. Without fossil fuels there would simply be no aviation.

Truth hurts.

Apparently, Branson doesn’t see any sort of inconsistency in his environmental arguments.

But somehow he thinks he has the grounds to criticise any number of small farmers simply trying to go beyond subsistence living.

Like Sir Richard, some of them might have houses on islands, but they don’t actually own the island.

If Branson is keen to help the world – as he often seems to be – perhaps he should begin to realise that not all problems can be simplified down to a slogan, a campaign or a brash marketing stunt.

Some problems are complicated, and they require nuanced, subtle solutions.

But Sir Richard and ‘subtle’ have never gone together.