The Oil Palm The Oil Palm

Statement from Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong following European Parliament Report on Palm Oil and Deforestation

The Minister of Plantation Industries and Commodities, YB Datuk Seri Mah Siew Keong expressed concern on the recent voting of the Committee on the Environment, Public Health and Food Safety of the European Parliament (ENVI Committee) on Motion 2016/2222(INI) which includes opinions of the  Committee on Agriculture and Rural Development (AGRI), the Committee on International Trade (INTA), and the Committee on Development (DEVE) for a European Parliament Resolution on Palm Oil and Deforestation of Rainforests.

The Resolution links the palm oil industry to deforestation and the disappearance of the ecosystems. Among the main elements of the Resolution includes the need for a single certification that will guarantee only sustainably produced palm oil enters the European Union (EU) market and the requirement for food labelling indicating palm oil is sustainably produced through packaging or information accessible through technological features. Such Resolution is perceived as trade impediment and may have a significant negative effect on Malaysia’s exports. Furthermore, the requirement for mandatory labelling requirement targeted specifically for imported palm oil products could be considered as a significant departure from WTO commitments.

The palm oil industry in Malaysia is one of the well-regulated industries in the world and being one of the major producer and exporter of palm oil products globally, Malaysia would like to strongly reiterate that the palm oil industry subscribes to sustainable practices. In this regard, Malaysia has implemented the Malaysian Sustainable Palm Oil Certification Scheme (MSPO) beginning 2015 to promote the production of sustainable palm oil. MSPO is based on compliance to domestic laws and regulations, including the development and management of oil palm cultivation that subscribes to best environment and agricultural practices. As of January 2017, a total of 221,548.14 hectares have been certified under the MSPO scheme. To emphasize on Malaysia’s seriousness towards ensuring that palm oil is produced sustainably, the MSPO certification scheme has been made mandatory by December 2019 and it will be a move towards a truly reliable and internationally acceptable certification system. For Malaysian palm oil, our vision is through a MSPO certification as well as products identified through a Malaysian MSPO logo that would be the hallmark of quality and sustainability assurance to our global customers.

Malaysia strongly opposes the Resolution by the EU Parliament as it will have a negative repercussion on the palm oil imports into the EU and a devastating impact on the economy of producer nations. Currently, the EU is the largest market for Malaysian palm oil and palm-based products where in 2016, EU’s imports were valued at around RM10 billion. It is important to note that the palm oil industry is an essential component of the agriculture sector in Malaysia and has been instrumental in addressing rural poverty and providing employment opportunities. This industry is important to the livelihood of small farmers where, there are currently more than 600,000 smallholders in Malaysia, which is close to 40% of the total planted area. The palm oil industry has contributed to RM67.6 billion in 2016 in terms of export earnings and accounted for 55.4% and 8.6% of total commodity exports and total merchandise exports respectively.

In addition, Malaysia has also put in place various regulations related to conservation of its forest and biodiversity. Malaysia currently has 55.3% of land area under forest cover. This is in line with the commitment at the Rio Summit 1992 to retain at least 50% of the land area under forest cover. Palm oil cultivation currently accounts for 5.74 million hectares which occupies around 17.4% of the land area.

It is also important to note that this Resolution arises out of the Commission finding of 2013 where EU states that they are the biggest importer of deforested products with soyabean and soya cake from Brazil and Argentina amounting to 50%. Palm oil is in third place. Therefore the move by EU to single out palm oil and not the other crops that account for more than 50% of European imports that have been shown to contribute significantly towards deforestation through cattle grazing (animal husbandry) and soya cultivation is unjustifiable.

The Ministry of Plantation Industries and Commodities will continue to engage the relevant stakeholders in the European Union apart from initiatives that have been undertaken to engage the Members of European Parliaments through familiarisation visits to the oil palm plantation to educate on the sustainable practices of Malaysian palm oil industry. Malaysia will also collaborate with Indonesia under the ambit of Council of Palm Oil Producing Countries (CPOPC) to jointly represent our case highlighting the environmental and sustainable development of the oil palm industry and its contribution to the economy and poverty eradication as well as nutritional attributes of palm oil.



Minister of Plantation Industries and Commodities