Palm Oil Standard Tested for Usage by end-2014

The Malaysian Sustainable Palm Oil (MSPO) standard is being tested by the industry before its implementation by the end of this year, said Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Dr Yusof Basiron.

“The pilot trial is ongoing,” he told The Edge Financial Daily at the International Palm Oil Sustainability Conference 2014 here last month.

“It’s in the pilot trial now so that we can evaluate and refine the system,” he said.

Malaysian Palm Oil Board senior research fellow Ainie Kuntom said so far, the pilot run for seven palm oil mills and seven estates have been completed.

Asked about the slow pace in the MSPO implementation, Ainie said the pilot run can be considered as part of the standard’s implementation.

“At the end of the pilot run, the companies that have fulfilled the criteria will be given the MSPO certificates.

“We have also sent our application forms to companies and those interested have filled them out and replied to us. So, companies who want to start can technically begin already,” she said.

On whether the standard will be made mandatory, Ainie said the government would decide on whether to make it voluntary, mandatory or maybe mandatory in stages.

The MSPO was developed to address the grouses of mid-range and smallholder oil palm cultivators who face difficulty complying with the principles and standards of the Roundtable on Sustainable Palm Oil (RSPO) certification due to exorbitant charges, conflicting views of inspectors and changing criteria.

It had been reported that 20% of the local palm oil industry adheres to the voluntary RSPO certification.

In her presentation at the conference, Ainie said the RSPO alienated certain oil palm growers because the development of the industry only involved major players in the sector.

She said the MSPO will apply to all categories of the palm oil industry. “It is a standard that complies with Malaysian laws and ratified international agreements and conventions,” she said.

The first part of the MSPO standard covers general principles with 34 criteria. The second part involves 23 criteria and 35 indicators for independent smallholders.

The third part involves 33 criteria and 117 indicators for oil palm plantations and organised smallholders, while the fourth part covers 26 criteria and 87 indicators for palm oil mills.

Ainie said most of the requirements will cover laws governing land and wildlife protection, employee rights, crop protection, and environmental protection and preservation as well as safety and health issues.

She also said third party auditors conducted the pilot run evaluation for the MSPO certification scheme. The audit report is reviewed by two panels before certification is issued.

However, some at the conference believed that an additional standard may confuse industry players as to which certification is necessary to do business.

As it is, certain industry players such as Wilmar International Ltd, which has oil palm estates in Malaysia, has developed its own standards.

Asked about this, MPOC’s Dr Yusof said currently, the MSPO is voluntary. He said: “Whatever standards they [industry players] have, they will have to fulfil them. At the moment, the Malaysian standard is voluntary.

Adherence to sustainable certifications and standards promise palm oil players greater access to Western markets.

The palm oil industry has been under scrutiny and criticism from non-governmental organisations (NGOs), which argue oil palm cultivation contributes to deforestation, loss of biodiversity and encroachment on indigenous land.

Dr Yusof said the criticism levied by environmental NGOs is unfair. He believes they have their own interests and are not genuine in their pursuits.

“There is a lot of money to be made from environmentalism. So all the NGOs are capitalising on it,” he said. “It is a way to create business opportunities first by attacking the sector and then providing consultancy.

“This becomes part of the supply chain management of any commodity, especially palm oil, where there is resistance to protest against manifestos because it involves isolated cases of two countries,” he said.

Dr Yusof said by focusing on the palm oil industry, which accounts for 0.1% of the total global agricultural land, environmental NGOs are shooting themselves in the foot.

“In fact, people who focus so much on palm oil are going to mislead themselves by not focusing on real deforesting industries such as the cattle industry, which is 300 times larger than that of the palm oil industry,” he said.

“They do not take up the issue of cattle being the major source of deforestation, or soy bean being the major source of deforestation, because 99.9% of the world agricultural land is not being focused upon or dictated upon by manifestos by developed countries through their NGOs for compliance with sustainability.

“In a way they are smart, because it is easier to focus on 0.1% of world agricultural land. But it does not solve the sustainability [and] deforestation problem because we are only talking about 0.1% of global surface land involved in oil palm,” he added. – The Edge Financial Daily, September 2, 2014.

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