Palm | Kelapa Sawit

I was invited by the Senate Committee on Community Affairs in Canberra, Australia to give a testimony on the mandatory labeling of palm oil proposed under the Truth in Labeling – Palm Oil Bill. It seems that palm oil is now a target not only of Western Environmental NGOs (WENGOs), but also some ambitious Green Politicians of the developed world. On reflection, the WENGOs could be accused of taking the issue too far without thinking how their actions and allegations are un-justified and how these may affect the livelihoods of poor oil palm farmers in developing countries such as Malaysia and Indonesia.

I would not blame the Green Politicians for their lack of knowledge on the oil palm industry; the utterances that they made to support the Bill in Canberra clearly revealed their ignorance. They claim for example, that palm oil is a ‘fruit’ oil and should not be labeled as a ‘vegetable’ oil. Obviously, the WENGOs have diligently fed their Green Senators with the necessary cannon powder to debate on the Bill, but it was soon pointed out at the hearing that olive oil, produced as a fruit oil in the EU and Australia is also classified internationally as a vegetable oil because it comes from a plant or vegetable source as opposed to animal fats which come from animal sources.

The greatest flaw and danger in the proposed palm oil labeling Bill is its discriminatory treatment (or more accurately, mistreatment) of palm oil. The Bill was proposed based on WENGOs’ allegations and not on well founded studies of the palm oil industry in Malaysia, Indonesia and many other developing countries in Tropical Asia, Africa and Latin America. If every nation were to create legislations to restrict the import of commodities produced by other countries based on allegations, there will soon be no more trade to be carried out internationally.

My testimony questioned the validity of the labeling Bill as it undermines an industry which is critical to Malaysia’s prosperity; it would also impose higher costs on businesses of both countries and subject Australian consumers to a higher cost of living. Truth in food labeling should be driven by health issues, not political expedience, which is behind some of the campaigns revolving around this Bill.

The greatest impact of this Bill will be to single out palm oil as the only product in Australia to mandatorily be labeled for reasons other than health and nutrition, and to severely hinder efforts of developing countries to utilize palm oil as a means for alleviating poverty.

The Bill recommends palm oil to be labeled separately while other plant oils can continue to be labeled as vegetable oils. Certified sustainable palm oil (CSPO) marking to indicate sustainable palm oil has to be mandatorily indicated. While this form of labeling was touted as a means of providing consumers freedom of choice, it will also give the WENGOs an opportunity to demonize palm oil and campaign against the use of uncertified palm oil in food products.

There is no objection to such a Bill if all oils are fairly mentioned when used in a product as practiced in countries such as in the USA. However, the supporters of the Bill have twisted the facts by saying that only palm oil is separately labeled in the USA. In addition, there is no objection to RSPO certified palm oil to be indicated on a voluntary basis as a promoted brand on food labels. This is currently the aim of RSPO i.e. to have products using its certified palm oil to carry its logo which is a form of positive voluntary labeling.

Ironically, more than 3.5 million tonnes of CSPO are already available to buyers, yet many are unwilling to commit or purchase the oil. Most are unwilling to pay the premium to help share the cost of certification incurred by the producers. So, instead of asking the buyers who had demanded for CSPO to support their cause, WENGOs have been forcing their Governments to enforce labeling rules to have CSPO marking, thus making it mandatory for them to use only certified palm oil hoping to avoid paying a premium.

WWF who introduced the RSPO scheme as a business to business initiative to improve market access of palm oil to the EU and Australia, promised that the scheme will be voluntary. Nevertheless, at the Canberra hearing, WWF supported the Bill which will cause palm oil to be mandatorily labeled. WWF has conveniently forgotten the business to business principle of RSPO, but instead, wanted the government to intervene by the use of legislation.

WWF is aware that a large number of oil palm smallholders cannot afford to be certified under the costly RSPO scheme even though they have nothing to do with deforestation or extinction of the Orang-utans. The smallholders can equally produce sustainable palm oil, except that it is non-certified. They have been farming and planting oil palms for generations on legitimate agricultural land where no Orang-utans exist just like other oilseed farmers elsewhere in the world. Even the RSPO Secretary General has opposed the Bill stating that it is unfair to single out palm oil which will lead to it being ostracized by WENGOs when other competing oilseeds are non-certified and involve the use of much larger land resources globally.

The contradictory behavior of WWF attracted my attention. Palm oil producers should examine the true intentions of WWF. Both the palm oil suppliers and food manufacturers (members of RSPO) present at the hearing were against the Bill, while WWF who is also a RSPO member glaringly supported the Bill. WWF should be asked to decide to choose to stay as a member of the RSPO, and work to help the success of the RSPO scheme as it was designed to be, or remain as an anti-palm oil NGO outside the RSPO like Greenpeace and others.

For example, Andrew Rouse, Acting Head of Sustainability, WWF mentioned in his testimony that palm oil is a worthy candidate for labeling as it has a major effect on deforestation and environment.

On one hand WWF is seen to be supporting the oil palm industry through the RSPO but on the other hand it is not only supporting the Bill in Australia but has been supporting Zoos Victoria’s campaign against palm oil. According to Andrew Rouse mandatory labeling helps to drive consumer attention to an issue and provides an avenue for them to support CSPO.

Should WWF have intentions to use the RSPO scheme to control the palm oil supply chain by applying government legislation and consumer lobby, it should re-evaluate its intentions. Most countries especially the EU, are net importers of oils and fats and palm oil is a critical source to meet the shortage. Should Governments decide to legislate on the use of CSPO based on allegations made by WENGOs, claiming that oil palm causes deforestation and loss of Orang-utans, then producing countries could also decide to impose an export duty on CSPO so that smallholders who are highly burdened by this new regulation will be indirectly compensated for the increase in cost due to certification. As forty three percent of oil palm plantations are owned by smallholders, any new legislation by foreign governments will affect the poor smallholders who have over the years, through planting of oil palm, managed to enjoy a decent income and standard of living.

New legislations being imposed by Governments should always take into consideration the impact it will have on the supply chain and producing country and this should be based on proper impact assessment studies that are carried out by legitimate bodies. Imposing legislation based on distorted information by WENGOs with vested interest will eventually prove to be either ineffective or force oils and fats importing countries to be further burdened by paying more for an essential commodity to feed their population.

Manufacturers such as the Australian Food and Grocery Council (AFGC) are already calling upon their government to stop such legislation as this will eventually mean a higher cost for industries which will be passed on to consumers who are already facing tough times with the rather bleak world economic situation.

My formal testimony to the committee, corrected many of the allegations made against the palm oil industry by the WENGOs where I demonstrated the negative impact that labeling would have on producers of palm oil. I demonstrated that the palm oil industry in Malaysia is a critical sector for prosperity and economic development.

The behind-the-scene role that WENGOs have played in advancing their agenda, through campaigns involving Zoos, promoting misinformation, and neglecting the needs of Malaysia’s rural poor and smallholders was clearly stated in my testimony.

“[The Bill] may make the adherents and supporters of Greenpeace and World Wildlife Fund have a great degree of self satisfaction when sipping their skinny lattes, but to 570,000 Malaysians and their families there is no self satisfaction. All they see is a threat to the livelihoods.

“Do the international NGO’s – Greenpeace and WWF – want to keep people in poverty?”

“Do they view the people of my country as participants in some sort of case study?”

“Malaysia pledged at the United Nations Rio Earth Summit in 1992 to retain at least 50% of its total land area under forest and that plantation crops would only be permitted on the land set aside for agriculture. Malaysia has greatly exceeded this target considering that 56% of its land is still under forests.”

“Forty three percent of oil palm plantations are owned by smallholders. Palm oil companies have invested significantly in schools, roads, water and hospitals for their workers. The palm oil industry directly employs over half a million Malaysians. Hundreds of thousands more rely on these incomes.”

In addressing the WENGO claims that oil palm plantations were a major threat to Orang-utans, I mentioned that the proposed Australian labeling legislation would have no benefit for the environment, forests or Orang-utan populations of Malaysia.

“It is unfortunate that the Orang-utans have been used, or more accurately misused, in this debate.”

“Our industry is not a rapacious destroyer of either forests or Orang-utans. We have been accused of this, we have been pilloried on it – and it is totally inaccurate.”

The Malaysian team at the inquiry had to correct many false allegations made against the industry by WENGOs.

WWF and the Palm Oil Action Group (POAG) claimed that oil palms removed nutrients from the soil, making the soil completely useless after 50 years. This was refuted by a Danish planter (a RSPO member) present to give his testimony. He advised the committee that the first oil palms on his Malaysian plantation run by his company were planted in 1918 and now the fifth generation palms were thriving in the same soil. His testimony proved to be more credible than the testimony by WWF and POAG.

The Senators also heard a moving testimony from a Malaysian witness from Sarawak of how the oil palm industry had opened opportunities for farmers in Malaysia especially Sarawak, supported their way of life and provided a better education for their children. All this had translated into a more informed community thus improving the well-being of the rural people. His testimony carried particular weight before the committee due to his ability to identify with under-developed communities, as acknowledged by some of the Senators. After all, he was born in a long-house located in a natural rainforest environment in Sarawak. (He did not choose to live and hunt in the rainforest as romantically expected by the WENGOs but went to England to study accountancy and now heads a company involved in planting oil palm for thousands of small farmers under the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) scheme.)

The Committee was visibly taken aback by the strong testimony as well as the distinguished panel of Malaysian representatives as it reflected the importance of the issue to both Malaysia and the oil palm industry. The Committee was presented with facts not rhetoric; after all, the issue being discussed was not one that can be taken lightly when it would very well affect the livelihood of poor oil palm farmers who would be forced into poverty.

It is important for all of us to keep in mind that food is a basic necessity for people. As the world population grows, so will the demand for food items such as oils & fats. Many countries are already net importers of oils and fats. Compulsory labeling schemes to curb palm oil trade will only invite retaliation to counter the effect. For example, producing countries may impose higher export duties on CSPO to raise revenue to pay for certification costs. It is the consumer who will be most affected.

As for the Malaysian delegation, we were there to defend our right to use part of our country land area for agriculture to plant oil palm. The combined oil palm plantations in Indonesia and Malaysia account for only 0.23 % of global agricultural land area while the combined populations of Indonesia and Malaysia account for 3.9% of the world population. This demonstrates that both countries do not use even 1/10 of their proportionate rightful quota of land to plant oil palm.

Surprisingly, there were no questions directed at the carbon emission of our oil palm industry which is very small if not negative. I would not have hesitated to point out the massive carbon emission arising from the agricultural industry in Australia (millions of Australian ruminants such as cattle emit methane, a very potent GHG from their stomachs regularly). Australia is also a major producer, consumer and exporter of coal, a very dirty fuel with respect to GHG emission. The WENGOs conveniently overlook these big GHG emitters when their country’s economy is critically dependent on them but choose instead to demonize the oil palm industry which is a negligible emitter of GHG in comparison. On reflection, it is not unreasonable that many commentators have accused them of practicing Green Colonialism.

The Malaysian palm oil industry earned a healthy RM60 billion last year. This was an increase of RM 10 billion compared to 2009. Most plantation companies doubled their last quarterly profits compared to the previous year. The income generated by high prices as experienced by the palm oil industry led to rural townships around the country undergoing a mini economic boom. Clearly, the rural population benefited the most from the high prices of palm oil, rubber, cocoa and even pepper which form the major plantation commodities produced in Malaysia.
 

The economic contribution of palm oil and other plantation commodities provided the assurance of a remunerative source of income and unlimited employment opportunities throughout the year for the people of Malaysia. A day’s work of harvesting oil palm fruits or tapping rubber trees for latex can provide a person with an income of more than US $30. In a country where two meals per day would cost only US $4, such an income is rather remunerative. Nobody should be deprived of a better life or even resort to begging as long as he or she is willing to put in a few hours of work in a day in our oil palm or rubber plantations. Malaysia enjoys almost full employment which also means that labour shortages exist especially in the plantation sector.

In contrast, rural population of many developing countries often earns a mere US$2 per day, and employment is limited or seasonal. Food is often unaffordable and as previously mentioned in my blog , one billion people on this planet suffer from food insecurity where daily meals are not assured. This is where employment opportunities offered by the plantation industries in Malaysia also benefit labour from other countries. The income earned by the 300,000 foreign workers employed in the Malaysian oil palm industry, ensures that there is food on the table on a daily basis for 1 million of their family members living back home in Indonesia, Bangladesh, the Philippines and other neighbouring developing countries. In simple terms, the oil palm industry not only provides an income to Malaysians, but shares this benefit with an additional one million family members of workers who now do not need to go hungry to bed thus bringing cheer to so many poor people . How many industries can claim to do this?

The oil palm industry is also a major source of income for the government through the collection of corporate taxes. The benefits from such income will be more pervasive as the multiplier effects of government spending will impact education, health and infrastructural development. Essential food items are subjected to price control or subsidized in Malaysia, and this includes cooking oil for the public. The government taxes the palm oil industry in the form of a windfall tax and uses the money raised to make cooking oil affordable to the public. It is clear that palm oil provides solutions on many fronts: affordable food, lucrative income and overall stability to the country (bear in mind that high food prices and poverty have led to uprising in many developing countries recently).

Releasing the importance of the palm oil industry to the country’s economy, the Hon. Prime Minister of Malaysia recently spoke of the narrow view taken by the greenies and their followers who want to tarnish the image of palm oil by linking it to deforestation. No country in the position of Malaysia or Indonesia which benefits from the palm oil industry would tolerate the unsubstantiated allegations made by the greenies to denigrate palm oil. Viewed on a broader perspective, palm oil is a saviour to the current global shortages in oils and fats as a result of insufficient production of soyabean and rapeseed oils. For these oilseeds, lack of new land and unfavourable weather conditions have prevented any substantial expansion in planted areas or yield improvements. The future will see a widening gap between supply and demand of oils and fats. Consumers will face the prospects of escalating prices. Low income consumers from developing countries will be the most affected as they are the least able to afford expensive soyabean or rapeseed oils. Furthermore these oils are mostly burned in the EU for biodiesel, thereby further reducing the availability for world food requirements.

Palm oil plays a critical role in supplying affordable cooking oil to most developing countries which have to depend on imported supplies. The greenies have influenced the EU to discriminate against palm oil from being used as biofuel to protect the local rapeseed industry from competition by creating trade barriers through the implementation of the RED regulation. This leaves palm oil generally available for the food sector globally. As shortages are unavoidable, it does not matter what oil is used for which sector. What is important is that the growth in supply is matched with projected demand. Since oil palm is the most capable crop to meet the increasing demand, its production should be logically increased. Because of its high yield (10 times more than soyabean oil), it will require ten times less land to supply the world’s increasing needs.

The greenies are threatening the world’s food security. On the one hand, they are encouraging the EU to convert inefficient rapeseed oil for biodiesel and on the other hand they are campaigning to limit the production of palm oil, fearing that it would compete with rapeseed as a raw material for the EU biodiesel industry. Inadvertently, their wish to restrict the growth of palm will accelerate the shortage of oils and fats in the world market. While current palm oil producers will benefit from escalating prices created by the greenies anti palm oil campaigns, other consumers, especially those in the developing countries, will be burdened by unaffordable cooking oil and escalating food prices. It would threaten jobs which would otherwise be created through the expansion in the oil palm sector as operations are labour intensive as compared to other oil seeds.

All these potential calamities are being created by the greenies out of their perverted and narrow views of deforestation. Without resorting to scientific evidence or even considering broad macro view of world requirements, they (the greenies) have opposed the expansion of oil palm cultivation fearing that rapeseed oil will be out-competed by palm oil for biofuel use in the EU. They use deforestation as an excuse for campaigning against palm oil without any scientific justification.

How can oil palm be blamed for deforestation in Indonesia when the country only uses 5% of its land area to plant oil palm which is one of its agricultural crops. In comparison, the UK has deforested up to 72 % of its land area for planting of agricultural crops. If the total land area under oil palm globally is compared to the total agricultural land of the world, the oil palm share is only 0.22%. Any scientist or non scientist would know that the utilization of 0.22% of the world agricultural area to plant oil palm, does not constitute massive deforestation. The fact is more than 60 and 80 % of the oil palm areas in Indonesia and Malaysia respectively were from non virgin forest areas. In addition, both countries have huge forest reserves which will cater to the need to conserve biodiversity.

How can such a small figure of land use be associated with habitat or biodiversity loss, or even be a cause of major contribution to GHG emission and global warming. I keep challenging the greenies and their fanatic followers to provide clear evidence or proof of any allegations they wish to throw at the palm oil industry. This includes allegations of indigenous people being robbed of their land. Let me correct the misinformation again. Indigenous people have been given ample land reserves by the British when they ruled the country. Their land is mostly cultivated with rubber or oil palm. Many are thankful that they have been given land to enable them to become prosperous smallholders. Obviously, we have laws in place that would address any attempt to rob people of their land.

Consumers in developing countries and also those in the developed countries must be alerted to the potential damage to the economy, food security and escalating food prices which will result from the anti palm oil campaigns orchestrated by the greenies. It is even immoral to support them in their campaign which will ultimately bring misery in the form of food shortages and high prices to the rest of the world. It is even more mind boggling to ask why the EU continues to blatantly fund the greenies to pursue their indefensible intentions to deny developing country consumers with an improved food security for the future.

The Western Environmental NGOs (WENGOs) are well known for their ruthlessness: they are deeply ideological, almost like religious fanatics in some cases. They are also relentless, well funded and cunning. In many instances they have no regard for facts. They shape their arguments on the basis of their effectiveness irrespective of facts, and their war aim is clear, to destroy your industry if you are the intended target.

This is the challenge faced by the oil palm industry which has been targeted by the WENGOs. Their aim is to destroy the oil palm industry starting with a day at a time, followed relentlessly by weeks, months and years of negative campaigns. For example the ruthless campaign by Zoo Victoria against the palm oil industry was based on mere exaggeration rather than on facts. A recent report by the Australian Institute of Public Affairs (IPA) finds that 10 out of 12 facts used by Zoo Victoria in its anti-palm oil campaign are either false or cannot be substantiated.The Zoo campaigner Ms Lowry later admitted working closely with the WWF.

Oil palm happens to be an agricultural crop of developing countries where farmers who were plagued by poverty may now have an opportunity to earn a decent living of up to US$ 20 per day compared to US $2 before they cultivated oil palm trees on the land. These farmers are crying for fair trade to prevail especially in the EU, USA and Australia where WENGOs campaigns have smeared the good image of their agricultural produce leading to new barriers being imposed to imports of palm oil.

In some instances the anti-palm oil campaigns have infiltrated policy makers in formulating regulations which are essentially trade barriers disguised as sustainability issues. The EU Renewable Energy Directives (RED), with their highly controversial system of default figures assigned especially to foreign raw materials like palm oil for use as biofuel is a clear example of a discriminatory trade barrier. No sound minded scientists will be able to justify assigning a pathetic low carbon emission saving figure of 19 % for palm oil, but it can happen in the EU as found in the RED regulations as a result of the influence of the WENGOs in policy making circles.

Similarly, the infiltration of WENGOs ideology in the World Bank has led to a departure of its policy which no longer promotes growth in developing countries when oil palm cultivation is involved. But WENGOs can avoid the path of destruction of developing countries agricultural industry and still contribute to a better world if their campaigns to save forest and mitigate green house gas (GHG) emissions are linked to actual sectors and countries that are truly involved in deforestation or those rampantly contributing to GHG emissions.

One area of potential progress is to focus on deforestation taking place in developed countries. I have pointed out this previously citing Canada as an example and since then some progress was observed. Recently, Canada made peace with the WENGOs by signing a moratorium on logging to reduce deforestation. This is a good example for other developed countries to follow. Deforestation moratorium alone is not sufficient. In order to increase forest cover, reforestation campaigns should be launched especially in the EU where forests have been decimated to less than 20 % of total area in many countries. They should follow the good example of Malaysia where forest cover is more than 50 % of the total country's area. Such re-establishment of forest cover will help mitigate global warming and provide habitats for animals.

Present focus by the WENGOs to restrict oil palm cultivation expansion in order to conserve forests is likely to stifle an important economic activity of developing countries. Other more feasible options should be considered. For example, deforestation in developing countries and coal mining in developed countries share common characteristics in that both are economic sectors which contribute to emission of CO2. If the WENGOs were to focus solely on no deforestation by preventing expansion of oil palm plantation in developing countries and yet allow the continuation and expansion of coal mining in developed countries, the emission of CO2 will continue undiminished.

Therefore, developed countries will continue to enjoy economic activities with substantial CO2 emission while poor farmers in developing countries are unfairly asked to make sacrifices and denied further access to an economic activity in order to save emission of CO2.

In reality, replanting of degraded forest land with oil palm is the most productive and useful thing to do, as it is the best way to reforest an area, sequester carbon and contribute to economic development. On the other hand, coal mining is a one way process of releasing locked carbon to the atmosphere causing global warming. The developing countries are also the least able to make the sacrifice to reduce their economic activity compared to developed countries.

This is where the WENGOs can re-align their campaigns by focusing on what developed countries could do in order to make a more meaningful contribution to their objective of reducing global CO2 emission and not just focus on stifling the growth of agricultural commodities of developing countries such as palm oil which will harm the income potential of the poor farmers who are only trying to earn a decent living. These oil palm farmers have a right to have a better life just like the WENGOs and they should be given a chance to improve their agricultural practices while facing the harsh realities of poverty which is common in developing countries. They are working with local NGOs to adopt the Round Table on Sustainable Palm Oil (RSPO) practices which takes time, and they need support in improving their sustainability practices instead of harassment by some WENGOs from far away lands on how best to cultivate their crops.