KUALA LUMPUR (May 17): Malaysia is worried that the benchmark standards keep on changing and are difficult to comply with, especially for smallholders, as it continues to address sustainability aspects and corrects the negative perception and allegations towards its palm oil, the Malaysian Palm Oil Board (MPOB) said.
Citing an example, director-general Datuk Dr Ahmad Parveez Ghulam Kadir said as for the Indonesia-European Free Trade Association issue, Indonesia is using the Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability and Carbon Certification (ISCC) as its benchmarks, for which both are using more advanced standards that are constantly revised, especially the RSPO.
The RSPO and ISCC are the benchmarks set by the European Union (EU).
“The newer standard, which also includes Malaysian Palm Oil Sustainable (MSPO) certification, will not be able to reach the same level as once reached. The RSPO will be changed again and become more stringent.
“It’s not fair to use the standard as a benchmark. Also as the RSPO is for business-to-business and requires membership fees annually and a higher cost of auditing, it’s very difficult for the RSPO to get smallholders on board. A very small percentage of smallholders are RSPO-certified,” he said.
In addition, he said the continual changing of RSPO standards and compliance requirements would make it more expensive from time to time and a “sustainable standard which is non-sustainable” as it makes palm oil lose price competitiveness in the long run.
Ahmad Parveez on Monday (May 16) presented his views on a hybrid forum titled “Trade Agreements and Product Demands”, which was jointly organised by the World Trade Institute based in Bern, Switzerland, the Institute of Malaysian and International Studies (IKMAS UKM), and the MPOB-UKM endowment chair.
“Developed countries also need to recognise national standards such as the MSPO as currently, there is no indication that these standards are being recognised by them as they keep on referring to the more advanced and stringent standards.
“They need to be more open-minded to look at and appreciate other contributions, especially during negotiations,” he said.
Ahmad Parveez urged the EU to not only focusing on deforestation but also looking at the other efforts that the industry here is doing that need to be recognised, especially other aspects of sustainability and preservation of land bank.
“As our commitment towards sustainability, Malaysia has voluntarily agreed to cut the greenhouse gas emission intensity by 45% by 2030 and is focusing on improving productivity and yield, rather than expanding land,” he said.
He noted that Malaysia had reiterated its commitment made at the Rio Summit in 1992 to retain at least 50% of land areas under forest cover. The areas under forest cover in Malaysia stood at 58.3% in 2019.
With 3.16 tonnes of production per hectare, palm oil only utilises 23.45 million hectares of land (in Malaysia and Indonesia combined), compared with 0.45 tonnes of production per hectare of soybean oil from 129.15 million hectares of land (Brazil, Argentina and the US combined), 0.78 tonne of rapeseed oil from 32.47 million hectares of land (China, Canada and the EU combined) and 0.76 tonne of sunflower oil from 28.1 million hectares of land (the EU, Russia and Ukraine combined).
Ahmad Parveez expressed hope that the new revised MSPO 2.0 standards and other compliances with relevant national and international laws with regard to sustainability, product standards and social well-being would help Malaysia to gain greater market access with bigger opportunities and global acceptance.
Collectively, there are nearly four million oil palm smallholder farmers in Indonesia and Malaysia, including temporarily-contracted migrants from the wider Asia’s region.
For many decades, the industry has helped lift millions of people out of poverty.
At the national level, the palm oil industry contributes between 2% and 4% of Indonesia’s and Malaysia’s gross domestic product respectively, making the sector a government priority in contributing to sustainable development.
Meanwhile, Malaysian Palm Oil Council science environment and sustainability division director Dr Ruslan Abdullah observed that some countries had already turned back to palm oil and accepted some standards set by the MSPO as they realised that business is becoming more difficult, especially due to the war in Ukraine.
“Some countries are rather less strict on sourcing the certified sustainable palm oil, so long they can get the product easily.
“My advice for the palm oil-producing countries is to work together rather than distance themselves, which will not solve the problems faced by the industry,” he said.
Ambassador Markus Schlagenhof, the head of the world trade division of the Swiss State Secretariat for Economic Affairs, said there will be some initiatives to be made and implemented following the pledge made by 143 governments at the UN Climate Change Conference (COP26) held in Glasgow last year to halt and reverse forest loss by 2030.
“We have to step up our support and continue to work together to make it work,” he said.
Southeast Asian countries Indonesia, Malaysia and Thailand are the largest producers of palm oil in the world. Indonesia and Malaysia contribute nearly 80% of global palm oil production.
Being exported to markets worldwide, the European countries import roughly 8.2 million tonnes from Indonesia, Malaysia and Thailand.
Palm oil and its derivatives are used in a wide range of food and consumer products from biscuits and chocolates to soap and cosmetic products.
In Europe, palm oil is also used as biofuel for the transportation sector.
However, the past years saw growing criticism over the allegedly negative impact of palm oil, often been associated with land expansion and clearance, deforestation and endangered wildlife.
More recently, there have been discussions on labour rights violations, including forced and child labour involving migrants and plantation workers in Malaysia and Indonesia.
The World Trade Institute, IKMAS UKM and the MPOB-UKM endowment chair jointly organised the forum on Monday.
The forum brought together regulators, industry, civil society and the scientific community to reflect the everyday realities — challenges and opportunities in all the facets from a sustainable development perspective — and to provide a critical but constructive avenue to exchange views and aspirations.
Source : The Edge Markets