Sustaining the palm oil industry

Palm oil play ers: Participants at the second annual The Star Roundtable on Palm Oil, (from left) Bas Melssen, Abdul Halim Ahmad, Tan Sri Dr Yusof Basiron, Errol Oh, Tan Sri Lee Oi Hian and Tan Sri Dr Mohd Noor Ismail.

Palm oil players: Participants at the second annual The Star Roundtable on Palm Oil, (from left) Bas Melssen, Abdul Halim Ahmad, Tan Sri Dr Yusof Basiron, Errol Oh, Tan Sri Lee Oi Hian and Tan Sri Dr Mohd Noor Ismail.

At The Star Roundtable on Palm Oil held at Menara Star in Petaling Jaya, Selangor, recently, The Star’s executive editor Errol Oh led the discussion joined by Malaysian Palm Oil Council CEO Tan Sri Dr Yusof BasironKuala Lumpur Kepong Bhd CEO Tan Sri Lee Oi HianTradewinds Plantation Bhd group corporate adviser Tan Sri Dr Mohd Noor IsmailFelda Global Ventures Holdings Bhd executive vice-president (downstream) Abdul Halim Ahmad, and Agensi Inovasi Malaysia executive vice-president and head of strategic innovation projects Bas Melssen. 

The topics: Sustainability and the soon-to-be-launched Malaysian Sustainable Palm Oil (MSPO); the National Biomass Strategy 2020; the anti-palm oil lobby; and, Budget 2014.

The Malaysian Palm Oil Board (MPOB) is expected to launch the Malaysian Sustainable Palm Oil (MSPO) standards next year. Is it a good idea for Malaysia to have its own sustainability framework when there is already the Roundtable on Sustainable Palm Oil (RSPO)?

Mohd Noor: Of course it is a good idea that Malaysia should have its own sustainable standard MSPO. RSPO should not have swerved away from the philosophy of its establishment. But now it is seen as an instrument of protectionism and trade barrier. The important part of the RSPO is its certification which emphasises on standards. However, Malaysia as a producer of palm oil can also establish its own sustainable palm oil standard.

The standard is supposed to be universally agreed upon, but with different sets, will there be confusion and overlapping as well?

Lee: First of all, KLK is fully committed to the RSPO. Although there are many common and overlapping standards between MSPO and RSPO, it is a good idea for MSPO as it includes many requirements particular to our country’s legislation and policies. The same goes for ISPO (Indonesian Sustainable Palm Oil). There should be no issue to comply with both MSPO (or ISPO) and also RSPO.

Yusof: The RSPO was conceived in such a way that it has a cut-off date to comply with its principles and criteria, which are against the interests of developing countries. So if the RSPO wants to have a universal value that applies to every country, it is not likely to be acceptable because developing countries would want to continue developing. That is why the RSPO is going to upset a lot of new oil palm development – for example in Africa – if it insists on applying the rules and regulations in terms of land opening and others. That is why our MSPO will be based on Sirim, an accredited body of the world standard, to develop its sustainable standard. And also, cater to the international way of developing standards, but definitely not the non-governmental organisations’ (NGOs) way. We are also making the MSPO to be aligned with the rules set by the ISO, the world standard making body, and hopefully MSPO can be applicable to all countries. The MSPO standard can cater to all producers in the local palm oil industry, and not just mimic the RSPO standard. We have to think hard about how the MSPO standard can apply methods used by the European Union, the US and Canada, in terms of qualifying their oil seeds like canola and soy as sustainably produced. This is done via the aggregate compliance approach or cross compliance approach. It is one simple process to certify the entire US soybean producers, Canadian rapeseed producers and the EU soya and rapeseed producers as compliant with sustainablity. These oil seed producers do not have to undergo the dirty audits one-by-one. The RSPO process is only imposed upon, or has to be complied with by, developing countries like us. So why should we follow the arduous and costly way of complying with the RSPO when Western oil seed producers can just get their ministers to sign a sustainable compliant statement to say their farmers have complied with the standards. If the MSPO were to follow the RSPO, it would have been regression.

(Addressing Abdul Halim) As a downstream person, how important is sustainability certification from the perspective of producers and consumers?

Abdul Halim: The RSPO is a good initiative if it is without ulterior motives. Thus it is good for oil palm planters to maintain a certain standard that is accepted internationally. However, if you have ulterior motives and start putting in unfair elements, that makes it hard for planters to comply with the RSPO regulations such as life cycle assessment and carbon balance. You have to understand that RSPO certification is a non-tariff barrier. But why is there no roundtable on sustainable rapeseed oil, corn oil or soy oil (equivalent to RSPO)? With that, I think Malaysia should have its own MSPO. But the local standard should not be made too easy as it has to be in line with international standards but within our control – unlike those elements in RSPO which make it difficult for planters to get the RSPO certification but without it we can’t qualify to export.

Lee: Influenced by their clientele and many NGOs, the large consumer companies are actively pursuing sustainability and traceability as their commitment as responsible citizens. As a responsible industry, oil palm plantations and our downstream companies have similiar commitments to responsible practices and fully adopting RSPO standards and criteria.

For MSPO, what needs to be put in place for the standard to work?

Mohd Noor: The MSPO should consist of all the common compliances. I think the RSPO has a structural problem within its administration. We must make sure that the MSPO has all the standard features so that nobody can just change the rules and regulations at their whims and fancies. Just as in our Financial Reporting System, the IFRS (International Financial Reporting Standards), we abide by it.

Yusof: The MSPO should only be modifiable by Sirim, unlike the RSPO which can move the goalposts based on votes; whoever has the majority votes could always get away with whatever changes they want in the RSPO. The MSPO may be based on the Sirim standard-making process but of course it is open to public scrutinity and comment. It is also done through the ISO mechanism of formulating and changing the standard components. We hope to do this well so that Malaysian-produced palm oil can be 100% certified. We want to be seen as responsible producers of palm oil. It can also be a strong motivation to both producers and buyers/consumers.

Lee: The MSPO is what the country requires. It is obvious the oil palm industry must be farmed in a responsible way. Through this, we can also disseminate more responsible practices especially to the oil palm smallholders. Both the MPOB together with its Indonesian counterpart that sets up the ISPO have the infrastructure to make it happen. This will help bring the sustainable palm oil standards of the two countries closer together and also, both plantation owners and smallholders.

Source : The Star

You can share this posts:

Leave a Reply