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EU Action Plan is unfair

Malaysian Palm Oil Council says EU Action Plan is unfair

The Malaysian Palm Oil Council has come out against the EU’s proposed unilateral Action Plan against deforestation, charging that is impractical to implement unilateral global initiatives to improve trade in sustainable goods. The Action Plan, according to the MPOC, is discriminatory against the challenges of rural farmers and smallholders, including those in palm oil-producing countries such as Malaysia.

Malaysia is the first country to certify the sustainability of its palm oil. Under this mandatory program, all Malaysian palm oil producers must be certified by January 1, 2020. With Malaysian Sustainable Palm Oil (MSPO) certification, harvesting and shipping will be traceable giving importers and consumers the assurance that they are getting pure, authentic, non-GMO palm oil.

The MSPO certification covers all aspects of palm oil production, from the field to the final product. In addition to cultivation and processing techniques, MSPO certification is about protecting the forests and wildlife, and providing a living wage for everyone employed by this industry including 400,000 family farmers (smallholders).  It includes general principles as well as stringent criteria for all parties involved in palm oil production.

The Action Plan would unfairly levy higher import taxes among yet-to-be certified smallholders even if they follow sustainable processes

Currently in draft form, the EU Action Plan is an attempt to address the continued loss of commodity-driven forests, as well as forest degradation in the tropics. The Action Plan calls for lowering import duties for sustainably produced commodities, and stresses the need for universal language to distinguish between certified sustainable and unsustainable palm oil.

The MPOC states that this is highly controversial, as it focuses on “product versus process”.  The Council asserts that charging higher tariffs to producers of uncertified palm oil would be financially harmful to Malaysia’s smallholders, who follow sustainable processes but have not yet achieved certification.

Moreover, the MPOC notes that the draft focuses on three forest risk commodities for which certification standards are very low: beef, corn and natural rubber. In contrast, the palm oil industry is already subject to numerous voluntary and mandatory sustainability standards. A move to hold every commodity to the same sustainability standards seems like an unnecessary and time-consuming step backward. “The incubation of certification schemes for products that already have numerous such schemes available may be unnecessary and even inappropriate,” writes the MPOC.    

MPOC also noted that, “It is important to highlight the value of local farmers and the positive economic impacts of the forestry industry that must be balanced with the need to increase sustainability. However, just as this is being advocated for on behalf of the EU farmers, the same considerations must continue to be held with respect to farms (and especially smallholders) in third countries.”

MPOC concluded, “It is for this reason that any programs intended to incentivize sustainable production of goods must only reward the sustainable goods being traded, rather than punish local farmers that do not yet have the means to fully comply with the many costly and often burdensome sustainability criteria. This is also why a unilateral approach to determining sustainability criteria is unjust, and, instead, countries should come together and develop criteria that consider the practical realities of the industries affected, while still improving the sustainability of the production processes.”

The equivalent of $13 million dollars has been allocated by Malaysian authorities to help its independent farmers, who have been using environmentally responsible practices for years, to afford MSPO certification by December 31, 2019.

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