Palm | Kelapa Sawit

Recently, the Malaysian and Indonesian Ministers in charge of the palm oil industry had a roundtable dialogue with US NGOs, government officials and other food and non-food customers to discuss palm oil sustainability issues. Both the Malaysian and Indonesian delegation members were keen to hear green NGOs views and were prepared to provide counter viewpoints explaining how palm oil is produced sustainably in their respective countries.

What I have noticed lately is that the ultra green NGOs often fail to attend these dialogues. They prefer instead to raise their same old issues not in a face to face manner, but via their media channels on the internet, where they can repeat their infamous allegations on oil palm linking it to deforestation. This time, they broadcasted their counter views through the internet just a few days after the dialogue ended when the Ministers had returned home to their respective countries. In fact, our organizers informed us that the NGOs were so paranoid about the dialogue being held that they sent out emails twice unethically informing all invitees that the dialogue had been cancelled! The unscrupulous attempt to sabotage the meeting did not work and merit our condemnation. More than 50 important stakeholders including friendly NGOs attended the meeting. Nevertheless, we have to take this threat seriously. Next time around, the sabotage could be life threatening.

The Ministers decided to make a trip to the land of the green NGOs to dialogue on palm oil sustainability and to convey their convictions that palm oil does not cause any significant deforestation nor does it contribute significantly to greenhouse gas emissions(GHG). They were ready to explain these to the dialogue participants and additionally, share the more important secret of the vital contribution of palm oil towards global food security, national employment opportunities and lifting developing country farmers out of poverty. Palm oil as an agricultural crop has that potential.

I did notice, in reading the ultra green NGO statements which make reference to issues raised at the dialogue, that the information they received from their friends present at the meeting seemed to have deviated substantially from the original consensus arrived at the dialogue. All questions were fully answered by the delegation from Malaysia and Indonesia during the dialogue which ended with everyone fairly contented that their doubts and wrong perceptions were satisfactorily addressed.

During the dialogue, I elaborated on the progress made towards ensuring that our palm oil is the most sustainable in the oils and fats industry and this is restated as follows:-

Globally accepted definition of sustainability contains the three Ps: concern for the People, Planet and Profit. Palm oil fits the three Ps rather strategically.

1. People: People globally benefit from palm oil through improved food security and an access to cheaper supply of cooking oil; and for the two main producer countries, namely Malaysia and Indonesia, palm oil earns an estimated US$40 billion a year in terms of export revenue. Most of the income would be well distributed to families in the rural farming communities who can then send their children for basic education which will enable them to earn a decent living in future, and live comfortably in the modern world where hand phones are a common need and ipads are occasionally a new household item to replace the need to buy newspapers.

Green NGO allegations of oil palm plantations encroaching into land belonging to indigenous people in Borneo are already being addressed by the authorities. The indigenous people truly want a share of income from the development of the land in the vicinity of their traditional villages and long houses. Oil palm will help them achieve this, thus enabling them to have an assured income as opposed to their past and traditional practice of cutting logs and hunting animals from the forest (often illegally and unsustainably). In Malaysia, the authorities are undertaking perimeter survey of indigenous people community land-claims to ensure ownership is clearly established and overlapping claims on land are minimized. This will take some time to resolve and in all cases, the courts are there to help settle outstanding issues. Developed countries should understand that developing countries have to face such unresolved issues. That is why we are called developing countries.

2. Planet: Planet means environment conservation. Oil palm occupies only 6 % of the total land area of Indonesia. The ultra green NGO allegations that 2 million hectares of forests are destroyed to make way for oil palm cultivation every year in Indonesia is pure rubbish. The arithmetic simply does not add up. With these half baked figures, there would be 20 million hectares of oil palm plantations added between the year 2000 and 2010. The fact remains that Indonesia has only over 7 million hectares of oil palm plantations and not over 20 million hectares as implied by the ultra green NGOs!

Malaysia has a land area of 33 million hectares. It has envisaged that its total oil palm plantations of 4.85 million hectares are part of it allowable agricultural land which occupies about 25 % of the total land area of the country. The country has pledged to keep at least 50 % of its land area as permanent forest. The remaining 25 % of the country’s land area would be utilized for industrial development, cities, towns and villages and other infrastructural facilities such as roads and highways, recreation areas, lakes and other water bodies. Under this strategy, the entire palm oil produced in Malaysia is already sustainable as it has a balanced provision of permanent forest and agriculture areas that meet the standard practiced by any developed country. Ideally, certification for sustainability should be undertaken for the whole country as one production unit for palm oil. All the elements relating to palm oil’s sustainability, such as the need to conserve forests, are met when the whole country is regarded as one production facility for palm oil.

Ironically, the oil produced by developed countries is not sustainable and cannot be certified sustainable partly because it is often genetically modified and NGOs such as WWF have not been successful in forcing the US soyabean farmers to agree to have a sustainability scheme for soya bean oil.

3. Profit: The profit component in the requirement for sustainability is sufficiently met by palm oil production. Oil palm cultivation has undergone many cycles of replanting and yields have been maintained at a high level reflecting no deterioration in land fertility. The high yield of 10 times that of rivals such as soyabean means that oil palm plantations remain profitable whether operated by big plantation operators or by smallholders.

Misguided campaigns against palm oil
The current contention by green NGOs that only WWF introduced RSPO certified palm oil must be used in their countries is a big disservice to the thousands of small oil palm farmers globally who aspire to have fair access for their palm oil into the world markets. These farmers have similar aspirations to those of developed country small farmers who hope to export competing oilseeds and oils that they produce to the rest of the world. The recent initiative of green NGOs to use girl scouts to propagate campaigns against palm oil is indeed shameful. It will only poison their young minds by teaching them to spread lies. Their actions may well lead to a restricted market access for palm oil which will affect the livelihood of millions of poor farmers in the developing countries. Without a steady source of income, poor farmers and rural communities who need to survive will resort to more deforestation and animal hunting, leading to unsustainable conservation of forests and wildlife. Will the girl scouts take responsibility for putting developing country farmers and their families into a life of misery?

The ultra green NGOs, the green politicians and some concerned individual consumers who act against palm oil should read the latest interview given by a WWF official where he states that the anti-palm oil campaign is a result of their environmental protection strategy based on their skewed definition of sustainability and transformation of markets.. WWF, as claimed, has identified some 15 top sectors with environmental risk which needs to be saved from further destruction. It appears that only environmental conservation is important in their definition of sustainability and not the 3 Ps as practiced universally. According to the WWF philosophy, as long as there is deforestation, the producers will be harassed accordingly. In addition, big international corporations have been identified to be shamed for using ‘unsustainable’ raw materials. WWF has proudly cited palm oil as their most successful project where some 6% of palm oil exports has been certified through the WWF introduced RSPO scheme for the last two years, while for other commodities, there was a poor success rate of the WWF initiated certification campaigns with no more than 1 % adoption after years of campaigning.

Palm oil producers did realize the skewed definition of sustainability propagated by WWF. As palm oil is already highly sustainable, the producers nevertheless agreed to give the RSPO scheme a try, hoping that those needing certified palm oil can have access to such products. It does not mean that non-certified palm oil is less sustainable or not sustainable. It is just that it has not undergone a certification process. For example, small holders who have operated their oil palm plantations for generations cannot afford the certification cost. WWF or other NGOs have not provided them with financial assistance to enable them to be certified. The RSPO scheme, if made mandatory will mean that the smallholders who are long established farmers (nothing to do with deforestation) will be victimized and their produce will be denied market access because they do not have the money to employ costly foreign auditors to certify their farms as per RSPO criteria in order to have certification for the palm oil produced.

It is therefore important for WWF to revise its strategy and devise a better scheme to include participation of the small holders which form 40% of the producers of palm oil in Malaysia. One way is to regard the whole country as one production unit for producing palm oil sustainably. Sustainable principles and criteria can be devised accordingly at a macro level to ensure there is proper balance between the need for the three Ps. Malaysia is probably ready to adopt such a scheme if NGOs such as WWF can support this move. Otherwise, there will continue to be a clash of definitions relating to sustainability. The end result will be a lose-lose situation with WWF failing to save the forests and conserving the environment and the oil palm farmers becoming victims of vicious NGO campaigns.

No sovereign government will agree to subject its most important economic sector such as oil palm to be dictated by NGOs such as WWF on how to produce this crop. This is akin to allowing backdoor legislation where rules governing the country’s land resources are made not in parliament but by NGO driven organizations such as the RSPO.

Fearing that the monopoly of the WWF initiated RSPO scheme for palm oil will cost producers dearly, the Indonesians have established an alternative national sustainability scheme for palm oil (ISPO) to compete with the RSPO. ISPO is offering sustainability guarantee on a macro national scale since it is mandatory for all producers to comply. In addition, Indonesia has already initiated a moratorium on deforestation, to further give assurance that their oil palm cultivation does not cause deforestation.

Similarly, the Malaysians would probably introduce their own national sustainability scheme (MSPO) to be operated on a macro level by viewing the whole country as a single production unit for palm oil. The Germans have already introduced their own scheme for sustainable supply of raw material for biodiesel under the ISCC standard and the US has introduced a similar sustainability standard scheme under the EPA RFS series. None of them chose a WWF driven sustainability scheme as such a process would be tantamount to surrendering country level rule- making to foreign based NGOs.

While sustainability in raw material production is a common aspiration shared by producer countries and the NGOs, both defer on the definition of the concept. Producer countries cooperation to implement the NGO initiated RSPO scheme has been abused by the appearance of anti-palm oil campaigns where the demand is unclear. Many of the NGOs and green politicians take the stance that the oil palm should not exist because it was planted on former forest land and therefore causes deforestation. This extreme view has no room or provision for developing countries that need to develop their land assets, stabilize their forest reserve areas and generate employment to provide income for the rural farmers.

It must be realized that forcing unfair schemes to be adopted by poor farmers will be a futile attempt. The NGOs are not elected representatives of the farmers. It is the politicians who are entrusted to make legislations and look after the needs of the voters. There must be a better approach for attaining sustainability objectives perhaps through international agreements on how much forest each developing country should preserve and how much of the country’s land area is allowed for agriculture. For now, it looks like it is a free- for- all rule of the jungle that the NGOs are practicing, condoning one set of rules and exemptions for the developed world and another set of rules on sustainability for Malaysia and Indonesia even though the two countries have shown willingness to get its palm oil certified for sustainability on a voluntary basis. Little appreciation is given to the fact that by using only 14 % of its land area to plant oil palm, Malaysia is able to supply almost 30 % of the world’s oils and fats export requirements with 20 million tonnes of palm and palm kernel oils produced. If Malaysia were to produce the equivalent of 20 million tonnes by growing soyabean like the US or Brazil where no certification is needed to enter the world market, a land area of 50 million hectares would be needed compared with only 33 million hectares available as total land area of the country. The world should be thankful for the high productivity of oil palm. Income from palm oil generates enough prosperity to prevent forest from being converted into agriculture areas. Oil palm is a better paymaster for keeping forest intact as desired, compared to developed countries who have failed in their promise to compensate developing countries for keeping their forests conserved under the REDD scheme introduced by the UNFCC climate change agenda.

In recent years, the Western Environmental NGOs (WENGOs) together with producers and buyers of palm oil have attempted to promote the development and market for certified sustainable oils and fats products in addition to existing non-certified products. This has resulted in two types of market for oils and fats: the certified sustainable oil market and the market for normal oils that are not certified. The most desirable and ideal market is of course one where the oils and fats products are proven to be sustainably produced. The proof is via a certification and auditing process where the oils or fats which are found to comply with a set of sustainability principles and criteria will be issued certificates attesting to their sustainable production and processing. These products are supposed to be marketed at a premium to meet the needs of sophisticated markets especially in the EU. In the case of palm oil, such products are referred to as Certified Sustainable Palm Oil in general or Certified RSPO palm oil (CSPO) if the RSPO system is used as the basis for auditing and certification. In contrast, the main market is still mostly for non-certified normal palm oil. Such products cannot be marketed as sustainable as the WENGOs will protest that there is no proof of sustainability. Neither can it be labeled as unsustainable palm oil as there is no proof for that either.Unfortunately, Certified RSPO palm oil has received limited acceptance thus far. The available capacity in Malaysia of about 1 million tonnes of CSPO palm oil has not been fully taken up. Only 30 % of the potentially available RSPO palm oil has been exported to the EU. The main excuse is the lack of willingness of the importers to pay a premium to offset the initial cost of certification. To make matters worse, some of the WENGOs are casting doubts on the ability of RSPO members to supply sustainable palm oil.

Biofuel requires inclusion of carbon emission saving parameters

With the world turning its focus onto biodiesel, the scope for sustainability certification is extended to include carbon emission parameters of the biofuel. RSPO was initially designed to serve the food industry, and carbon emission parameters were not included into the assessment system. Authorities for biofuel in the EU and USA want to have their own certification schemes for sustainable raw materials for renewable fuel. The RSPO scheme is deemed insufficient to meet their requirements unless carbon emissions saving figures are included. The RSPO nevertheless is attempting to overcome this deficiency.

The majority (99 %) of palm oil buyers are however, comfortable with the traditional market where palm oil has been traded without the need for a certification system just as other competing oils and fats are also marketed without any form of certification schemes. As other oils and fats are not able to offer certified sustainable products for the market and palm oil is largely also available in the non-certified form, there is some resistance and confusion to the introduction and acceptance of CSPO.

Another problem is the proliferation of potential new certification schemes to be introduced by Germany, the EU and the USA that form part of their national regulations to cater to the biofuel development. These need to be harmonized into an international standard as it is impossible for exporters of palm oil to comply with too many certification schemes. Without harmonization of certification systems, palm oil is not able to fully participate in the biofuel industry in Germany and USA and the certification schemes have essentially become effective trade barriers barring the entry of imported palm oil. In comparison, local raw materials are likely to be exempted from these certification schemes as local farmers are against such additional burden added to their production process.

WENGOs wrongly targeting palm oil

The WENGOs are exploiting the confusion by continuing to spread misinformation to tarnish the image of palm oil. Zoos in Australia have been misled by Friends of Earth (FOE) Australia into believing that orang utans are affected by deforestation due to oil palm plantations. Such allegations are unfounded. As discussed in this blog, orang utan population in Malaysia has stabilized because the country has stabilized its permanent forest area. Pseudo scientists operating some of the Australian Zoos should instead focus on campaigning for the critically low population of the Koala bears in their country. According to the Australian Koala Foundation, the population of Koalas has shrunk from 400,000 to 44,000 in the wild. Loss of habitat is the main reason, and forests are lost to agriculture. Australia has 23 times more land area than Malaysia, but its Koala bear population is only 4 times more than the number of orang utans in Malaysia (of about 11,000). The Australian Zoos are campaigning to help protect the already well protected orang utans in Malaysia while they are neglecting the fate of fast diminishing Koalas in their own country. They claim that Koalas can easily reproduce (to pacify the unaware public) but with declining habitat areas due to frequent fires and conversion to other uses, population growth of the Koalas will continue to decline as reported by the Australian Koala Foundation.

The misguided Zoo authorities in Australia have even lobbied their parliament to pass a law to label palm oil as the cause of orang utan population decline. Unfortunately they have not been fair in not asking their cattle and lamb products to be labeled as causing the decline and possible extinction of Koala bears and aborigines population in their country. It is a fact that cattle emit far more methane gas which cause global warming compared to oil palm plantations in Malaysia. The fact relating to historical land grabs that displaced and impoverished the aborigines in Australia should not be swept under the carpet but should be used to justify the labeling of Australian beef products. Current beef products from Australia are deceptively labeled without declaring the severe damage to global warming caused by methane from cattle, loss of habitat of Koala bears and historical land grabbing of aborigines’ land by beef farmers.

Similar arguments are forwarded by WENGOs in the UK who wrongly blamed oil palm cultivation in Malaysia as a cause of global warming. In truth, oil palm plantations behave like forest plantation by sequestering CO2. Inability to evaluate the scientific facts led to the WENGOs overlooking devastating emitters such as coal mines in their countries in preference for wrongly blaming oil palm plantations in developing countries for emission of CO2 as the cause of global warming. This has led to unjustified demand by many followers of the WENGOs for a stop to deforestation for agricultural development in developing countries.

Wrong assumptions and false allegations can cause devastating consequences especially when actions are taken by powerful developed countries such as the EU, USA and Australia against the interests of poor developing countries. Trade barriers are imposed without considering the big picture of costs and benefits. Malaysia was a net GHG sequestering country up to the year 2005, and deforestation for agricultural development is not an issue, because to a certain limit, deforestation is necessary as part of the sovereign right in the developing process for any newly independent developing country. Yet, a lot of negative campaigning is directed at palm oil on the false allegation that it contributes to global warming when the true fact is otherwise. Oil palm helps mitigate global warming together with the large permanent forest reserves which also provide for habitat need for wildlife such as the orang utans.

WENGOs like Greenpeace should start changing its focus and campaign to shut all the coal mines in its mother country, the UK, where CO2 emission from coal burning is several times more devastating in causing global warming compared to cultivation of oil palm in developing countries. Coal should be replaced with other fuels of lower carbon footprint. The 18 million tonnes of coal mined in the UK annually emits CO2 equivalent to the deforestation of 380,000 hectares of tropical rainforest. In addition, 40 million tonnes of imported coal will further emit CO2 equivalent to another 800,000 hectares equivalent of rain forest deforestation. The total 1,180,000 hectares per annum rainforest deforestation equivalent is about 10 times the annual area of past expansion of oil palm cultivation in Malaysia. While coal mines have a one directional release of CO2 to the atmosphere, oil palm planting sequesters CO2 to compensate for the CO2 released by initial deforestation. Blaming oil palm plantations (a source of livelihood in developing countries) as a cause of CO2 emission while ignoring more devastating sources of CO2 emission is essentially condoning gross wrongdoing in their own countries while unfairly opposing the development of needed legitimate agricultural sectors of developing countries. If global warming is the main concern of the WENGOs, they do not need to look far to find the solution. Campaigning to shut their coal mines, and boycotting the use of coal in their countries will yield far more CO2 reduction and will have least damage to the livelihood of people in developing countries as compared to attacking the oil palm industry.