Palm Oil Trade Curbs Perpetuate Poverty

EUROPE, in reducing palm oil usage in its food supply chain, blames oil

palm planting for widespread tropical deforestation and peatland


France’s largest frozen food maker Findus said it is

removing palm oil from its products in favour of rapeseed oil. French

retailer Casino, too, said more than 200 food products would be palm

oil-free by the end of the year. This policy would apply to its other

retail divisions like Franprix, Leader Price and Monoprix.

Another food retailer Auchan said it was working on ways to guarantee

all its products are palm oil-free. Carrefour, the world’s

second-largest retailer, said it will replace palm oil in several

branded goods.

British retail chain Marks & Spencer started

a campaign against palm oil by putting up five-foot displays in its UK

stores stating: “We think that destroying rainforests for palm oil is

too high a price to pay for a biscuit.”

Two weeks ago, Greenpeace campaigners abseiled into Nestle’s annual

shareholders meeting in Switzerland and demanded that the food giant

stop using palm oil. They hung a banner with the slogan “Nestle, Give

the orangutans a break!” and claimed Nestle’s use of palm oil in KitKat

chocolate bars was harvested at the expense of the rainforests.

These developments have hit a raw nerve among Malaysian lawmakers.

Kanowit Member of Parliament Aaron Ago Dagang said there’s a lot of

talk linking oil palm planting to deforestation and climate change but

until now there’re no empirical evidence.

“We need to look at

it from all angles,” Dagang said in an interview at the Parliament lobby

in Kuala Lumpur recently.

He drew attention to a recent news

report from Jakarta where World Growth chairman Alan Oxley said several

environment non-governmental organisations (NGOs) have strong

connections with the European Commission.

Oxley pointed out

that up to 60 per cent of WWF Europe’s revenue is funded by the EU

government. Europe can also prioritise environmental issues over

economic growth because they are already wealthy, Oxley said.

A quick check on the European Commission’s website

revealed the Directorate-General for the Environment had, in the last 10

years, handed out over ?66 million (RM211 million) to green NGOs. In

1998, the EU funding to environmental NGOs was just over ?2 million

(RM6.4 million) but last year, the amount nearly topped ?9 million (RM29


Mambong MP Datuk Dr James Dawos Mamit said he is not

surprised by the EU government funding these NGOs as propaganda


“Politicians in the EU are using political solutions,

disguised as environmental concerns, to protect trade interests of their

local farmers,” he said.

Mamit pointed to an independent think

tank report released from Brussels, Belgium admitting the EU Renewable

Energy Directive discriminates against imported biofuels, such as palm


The EU Renewable Energy Directive is a law that provides

the guidelines for European countries to draw up their own biofuel


The GlobEcon report titled “European Policies

Towards Palm Oil: Sorting Out Some Facts”, admits the Renewable Energy

Directive’s foreign biofuel greenhouse gas calculations as faulty and

intentionally discriminate against palm oil.

The report

demonstrates that the default assumptions embedded in the Directive

about the ecological impact of foreign biofuels are based on politics,

not scientific or economic reality.

While the use of biofuels

across the EU is rising, so too is the chorus of environmental activists

opposing their use. Sadly, many of the claims that foreign biofuels,

specifically palm oil, are a threat to the environment are seriously

flawed, some even completely unfounded, GlobEcon director Dr Gernot

Pehnelt wrote.

Standing before lawmakers at the European

Parliament, Pehnelt explained how the oil palm industry drive economic

growth to alleviate poverty in developing nations like Malaysia and

Indonesia. He also urged EU lawmakers to acknowledge the sufferings in

low-income nations that palm oil critics continue to perpetuate.

Mambong MP Mamit concurred with Pehnelt that the EU Renewable Energy

Directive restricts biofuel imports by rejecting forest land conversion

and mandating compliance to greenhouse gas emission standards that are

not science-based.

Mamit, who is an environmental expert,

explained that conversion of degraded forest to oil palm plantations is

just like establishing pine tree plantations in Europe and North


“In fact, oil palm trees are better at sequestering

carbon dioxide than pine trees. Herbs, bushes and shrubs in oil palm

plantations thrive underneath the canopy and trunks of oil palm trees,”

he said.

In Europe and North America, prescribed burning is

carried out in pine tree plantations every spring to eliminate pests

like pine-bark beetles and fungi. Yet, such destruction of plant

biodiversity and greenhouse gas emissions is often ignored.

Mamit then highlighted the hipocrisy of the EU renewable energy

directive that dictates developing countries to protect the environment

to a far greater degree than Europeans did at the same stage of

development but refuses to recognise the high opportunity cost of

foregone development.

“If our oil palm planters fail to conform

to EU’s definition of ‘sustainable standards’, we are denied access

into their market,” said Mamit. “It clearly is a political trade barrier

meant to protect EU rapeseed oil producers.”

On European

green NGOs’ calls to reject oil palm planting on Sarawak’s peat soil and

the imposition of unrealistic greenhouse gas criteria on palm oil

exports, Julau MP Datuk Joseph Salang Gandum said, “We need to take a

more balanced view, based on logic and facts.”

“These lobbies

seemed more targetted at killing the growth of oil palm plantings and

blocking palm oil shipments into developed nations like Europe. Such

trade barriers only serve to perpetuate poverty in rural Malaysia,” he


Gandum said oil palm planting has allowed Malaysia to

supply affordable cooking oil and margarine to billions of people in

other developing nations like China, India, Pakistan, Bangladesh and

Vietnam. He cited numbers from Oil World and Malaysian Palm Oil Board

(MPOB) reflecting the growing global palm oil consumption and

significant value addition of the palm oil industry to the nation’s


According to Oil World trade journal, Malaysia and

Indonesia collectively export the bulk of 36.8 million tonnes of palm


In the last two years, Malaysia earned between RM50 billion

and RM65 billion (or US$15 billion-US$20 billion) a year from palm oil

exports. Indonesia Palm Oil Commission reportedly said the republic

earns US$10 billion (RM32 billion) annually from palm oil shipments.

Malaysia’s annual US$20 billion (RM64 billion) palm oil exports

support some two million jobs and livelihoods along the sprawling palm

oil value chain.

The industry’s stakeholders range from food

engineers, bankers and cargo surveyors to manufacturers, traders and

MPOB’s data also show more than 330,000 smallholder

families, working on 1.6 million hectares of oil palm plots, produce a

quarter of the nation’s palm oil exports.

“The numbers speak

for themselves. The final frontier of Malaysia’s oil palm planting

expansion is in Sarawak. Many who live on native customary land stand to

uplift themselves from poverty through sustainable oil palm planting,”

Gandum said.

“When I say sustainable, I mean better enforcement

of the laws governing land boundary rights, good agriculture practices

and workers’ rights that had already been enacted by Parliament,” he


Source : Business Times

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