Palm Oil Industry Veterans to Lead Malaysia’s Sustainable Palm Oil Charge
Malaysian Deputy Prime Minister Datuk Seri Fadillah Yusof
- Malaysia is intensifying its efforts to present Malaysian palm oil as sustainably produced. The world’s second largest producer of palm oil is preparing a joint mission with Indonesia, the world’s largest producer to make their case to the European Union
- On the home front, the Malaysian palm oil industry has signed up palm oil industry veterans to lead premier government bodies as the country makes it’s case to global markets.
The appointment of industry veterans kicked off in February when Belvinder Kaur Sron, a veteran in promoting Malaysian palm oil, was appointed as the CEO of the Malaysian Palm Oil Council.
Following the news of her appointment, the Malaysian Palm Oil Board announced the appointment of Mohamed Helmy Othman as Chairman of the MPOB.
The latest in this series of appointments to top positions in the Malaysian palm oil industry was the announcement that the Malaysian Palm Oil Council (MPOC) has appointed United Plantations Bhd’s vice-chairman and chief executive director, Datuk Carl Bek-Nielsen as its new chairman, effective May 1, 2023.
The appointments of these veterans of the Malaysian palm oil industry provides a preview of what the Minister of Plantations and Commodities, Datuk Seri Fadillah Yusof, has in mind to build up Malaysian palm oil as a sustainable vegetable oil for global markets.
The Minister is no stranger to creating milestones as he created history in becoming the first East Malaysian to be appointed Deputy Prime Minister of Malaysia.
His awareness of what the electorate in Sarawak wanted propelled his popularity in elections as he fought for development in Sarawak. But as Deputy Prime Minister and Minister of Plantations and Commodities, he faces a daunting challenge in fighting for what the electorates of Malaysia are demanding in the face of discrimination against Malaysia’s primary agricultural exports in palm oil, rubber and timber, all of which are being targeted by the European Union’s Deforestation Regulations.
His political skills in approaching the EU’s Deforestation Regulations was in full display when he spoke to the press recently.
"We will have a session with them to explain what are the practices in Malaysia and Indonesia, the standards we have developed, to what extent our compliances are and what else we can do so that we can meet at the middle ground. It will be a win-win for the world as everybody is looking into the aspects of environment and human rights, and so is Malaysia."
What the electorates are demanding, is that the EU should either accept national certification schemes in the MSPO for palm oil or exclude smallholders from the EU’s Deforestation Regulations.
The demands of Malaysia’s palm oil smallholders for the EU to accept MSPO as Due Diligence-worthy, makes complete sense when importers of palm oil and other commodities listed in the EU's Deforestation Regulations, are not ready to meet compliance. This 2022 report from the Palm Oil Transparency Coalition which was recently featured by FeedNavigator, shows how much work is needed for compliance. Truth be said, it is impossible for EU importers to be prepared as the final versions of the regulations have not been decided on.
Based on what is known about the ambitions behind EUDR and its enforcement measurement in CSDDD, Malaysia should have no concerns about its ability to comply with the regulations.
The key points behind EUDR are that:
These are non-issues for Malaysian palm oil. Industry expert Khor Yu Leng had already written in 2018:
“Systems informed by big data can offer compelling evidence for the smallholders. For instance, Malaysia could easily point EU policymakers and buyers to smallholder zones that have been in production (no deforestation) since 2000, 1985, 1970 and so on. For every 300,000ha of smallholder plantations found, buyers could get over one million tonnes of no-deforestation palm oil.
Such hectarage is not hard to find. Mid-sized states like Kedah and Kelantan have about half a million hectares each of no-deforestation areas since 2000 that can be reviewed. A more detailed geo-economic study for Johor points to large no-deforestation plantation areas since 1985 (see maps).
With 1.8 million hectares of oil palm under cultivation, Malaysian smallholders can produce six million to seven million tonnes of (largely) no-deforestation CPO, equivalent to the EU’s annual demand. If the EU and others are serious about sustainability, there are other options, apart from limiting the use of this highly productive crop that has delivered socio-economic benefits to large numbers of smallholders.”
Since then, the implementation of MSPO Trace has been implemented to facilitate the traceability of Malaysian palm oil that Khor Yu Leng spoke of.
The simple dynamics of MSPO Trace is that it starts “tracing Fresh Fruit Bunches (FFB) from plantations, onwards through the supply chain, from milling, refining, processing, and manufacturing. Tracing works through the combination of individual profiles of all entities, supplier & buyer databases, sales announcements, and transaction records which connects the entire value chain.”
If traceability is the only factor that makes EU palm oil importers unprepared for EU regulations, then there is no problem for them as long as they work with the Malaysian Palm Oil Certification Council and its tracing tool in MSPO Trace.
This is where we go back to the appointments of Belvinder Kaur Sron, Carl Bek-Nielsen and Mohamed Helmy Othman.
These are seasoned veterans whose firsthand knowledge on what makes palm oil sustainable, will be a force to reckon with as Malaysia makes it case against importing countries like those of the EU, the US and UK.
It is worth noting at this point, that the ILUC strike against palm oil which we wrote on earlier, is now becoming a major controversy for soy-based biofuels as the EU Commission is accused of backsliding on its position against soy biofuels.
How the soy biofuels controversy plays out between the EU and Mercosur countries will impact the EU’s position against palm oil. For now, Malaysia seems to have chosen the better route to seek a win-win between palm oil producing countries and the EU as it garners support to make its case at the EU.
The win-win in Minister Fadillah’s words?
"Most importantly, we will look at how we can we come to a middle ground which is acceptable by international standards. At the same time, we will improve our practices and we are committed to ensuring we comply with it."
Following the news of her appointment, the Malaysian Palm Oil Board announced the appointment of Mohamed Helmy Othman as Chairman of the MPOB.
The latest in this series of appointments to top positions in the Malaysian palm oil industry was the announcement that the Malaysian Palm Oil Council (MPOC) has appointed United Plantations Bhd’s vice-chairman and chief executive director, Datuk Carl Bek-Nielsen as its new chairman, effective May 1, 2023.
The appointments of these veterans of the Malaysian palm oil industry provides a preview of what the Minister of Plantations and Commodities, Datuk Seri Fadillah Yusof, has in mind to build up Malaysian palm oil as a sustainable vegetable oil for global markets.
The Minister is no stranger to creating milestones as he created history in becoming the first East Malaysian to be appointed Deputy Prime Minister of Malaysia.
His awareness of what the electorate in Sarawak wanted propelled his popularity in elections as he fought for development in Sarawak. But as Deputy Prime Minister and Minister of Plantations and Commodities, he faces a daunting challenge in fighting for what the electorates of Malaysia are demanding in the face of discrimination against Malaysia’s primary agricultural exports in palm oil, rubber and timber, all of which are being targeted by the European Union’s Deforestation Regulations.
His political skills in approaching the EU’s Deforestation Regulations was in full display when he spoke to the press recently.
"We will have a session with them to explain what are the practices in Malaysia and Indonesia, the standards we have developed, to what extent our compliances are and what else we can do so that we can meet at the middle ground. It will be a win-win for the world as everybody is looking into the aspects of environment and human rights, and so is Malaysia."
What the electorates are demanding, is that the EU should either accept national certification schemes in the MSPO for palm oil or exclude smallholders from the EU’s Deforestation Regulations.
The demands of Malaysia’s palm oil smallholders for the EU to accept MSPO as Due Diligence-worthy, makes complete sense when importers of palm oil and other commodities listed in the EU's Deforestation Regulations, are not ready to meet compliance. This 2022 report from the Palm Oil Transparency Coalition which was recently featured by FeedNavigator, shows how much work is needed for compliance. Truth be said, it is impossible for EU importers to be prepared as the final versions of the regulations have not been decided on.
Based on what is known about the ambitions behind EUDR and its enforcement measurement in CSDDD, Malaysia should have no concerns about its ability to comply with the regulations.
The key points behind EUDR are that:
- Imported commodities cannot be produced on land that caused deforestation since December 31, 2020
- Full traceability to plantations must be available.
These are non-issues for Malaysian palm oil. Industry expert Khor Yu Leng had already written in 2018:
“Systems informed by big data can offer compelling evidence for the smallholders. For instance, Malaysia could easily point EU policymakers and buyers to smallholder zones that have been in production (no deforestation) since 2000, 1985, 1970 and so on. For every 300,000ha of smallholder plantations found, buyers could get over one million tonnes of no-deforestation palm oil.
Such hectarage is not hard to find. Mid-sized states like Kedah and Kelantan have about half a million hectares each of no-deforestation areas since 2000 that can be reviewed. A more detailed geo-economic study for Johor points to large no-deforestation plantation areas since 1985 (see maps).
With 1.8 million hectares of oil palm under cultivation, Malaysian smallholders can produce six million to seven million tonnes of (largely) no-deforestation CPO, equivalent to the EU’s annual demand. If the EU and others are serious about sustainability, there are other options, apart from limiting the use of this highly productive crop that has delivered socio-economic benefits to large numbers of smallholders.”
Since then, the implementation of MSPO Trace has been implemented to facilitate the traceability of Malaysian palm oil that Khor Yu Leng spoke of.
The simple dynamics of MSPO Trace is that it starts “tracing Fresh Fruit Bunches (FFB) from plantations, onwards through the supply chain, from milling, refining, processing, and manufacturing. Tracing works through the combination of individual profiles of all entities, supplier & buyer databases, sales announcements, and transaction records which connects the entire value chain.”
If traceability is the only factor that makes EU palm oil importers unprepared for EU regulations, then there is no problem for them as long as they work with the Malaysian Palm Oil Certification Council and its tracing tool in MSPO Trace.
This is where we go back to the appointments of Belvinder Kaur Sron, Carl Bek-Nielsen and Mohamed Helmy Othman.
These are seasoned veterans whose firsthand knowledge on what makes palm oil sustainable, will be a force to reckon with as Malaysia makes it case against importing countries like those of the EU, the US and UK.
It is worth noting at this point, that the ILUC strike against palm oil which we wrote on earlier, is now becoming a major controversy for soy-based biofuels as the EU Commission is accused of backsliding on its position against soy biofuels.
How the soy biofuels controversy plays out between the EU and Mercosur countries will impact the EU’s position against palm oil. For now, Malaysia seems to have chosen the better route to seek a win-win between palm oil producing countries and the EU as it garners support to make its case at the EU.
The win-win in Minister Fadillah’s words?
"Most importantly, we will look at how we can we come to a middle ground which is acceptable by international standards. At the same time, we will improve our practices and we are committed to ensuring we comply with it."
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Published March, 2023. CSPO Watch