Australian government set to oppose palm oil labelling bill

By Ankush Chibber

- Last updated on GMT

Related tags Palm oil World trade organization International trade Australia Malaysia

Australian government set to oppose palm oil labelling bill
The palm oil labelling bill in Australia is entering its next phase, with the House of Representatives set to vote on whether it becomes law – and the current government saying it intends to oppose it.

Called the Truth in Labeling – Palm Oil Bill 2010, the bill is aimed at making consumers aware of palm oil as an ingredient. Palm oil can currently be listed as vegetable oil on packaging.

Originally proposed by independent Senator Nick Xenophon, the bill was based on environmental concerns, citing deforestation in Indonesia and Malaysia for palm oil production. The bill was passed by the Senate at the end of June and is awaiting consideration in House of Representatives, where if passed, it would become law.

However, now the federal government has said that it will oppose the bill as it would violate Australia’s obligations under the World Trade Organization (WTO) and put Australian food businesses under extra compliance costs of AU$150m.

Bill to law is still 50-50

There is still a chance that the bill might become law, as the federal government and the opposition coalition have parity in numbers. As of the current status, the ruling government controls 72 seats in the House of Representatives, while the opposition coalition also controls 72 seats.

Tim Wilson, director, IP and free trade unit and climate change policy at Melbourne-based think tank Institute of Public Affairs, said that bill is more or less set to pass, despite being locked up in a Committee Inquiry.

“It's likely it will be made law in the next two months, but the timeline to come into effect is longer,”​ said Wilson.

According to Wilson, if the bill passes, Australia is risking retaliatory measures from Malaysia and other countries in ASEAN, which could affect Australian food manufacturers.

“It is also likely to harm Malaysia FTA [free trade agreement] negotiations. And there have already been rumbles that it will be challenged in the WTO. But it will pass and the price of food for consumers will rise and it will create a trade policy headache for Australia,”​ said Wilson.

AFGC is still hopeful, urges coalition to oppose

The Australian Food and Grocery Council (AFGC), which has taken a lead in opposing the bill previously, along with Malaysian and New Zealand trade bodies, has issued a statement calling upon the coalition to oppose the bill as well.

“It’s simply not the right time to introduce significant new cost pressures and regulatory burdens on industry when the sector is already under significant pressures,”​ AFGC chief executive Kate Carnell said in the statement.

The AFGC had previously stated that the cost of changing a single label would be between AU$10,000 to AU$19,000, which equated to hundreds of millions of dollars in extra costs as there are up to 60,000 products on supermarket shelves.

Tony Mahar, director of sustainable development at the AFGC, said that most of the concerns regarding the ecological impact of palm oil plantations are well understood by the AFGC, but disputes their truth.

“On the reasoning that it damages the region it is grown is not true. The fact is that palm oil trees are a more efficient crop than some of the crops that grown in the said regions, like Malaysia,”​ he said.

According to Mahar, Australia only uses 0.3 per cent of the world's palm oil and most of the affected food companies in Australia have committed to using certified, sustainable palm oil. A change in labelling is therefore not required, he said.

Mahar added that if the bill were passed, the logical fallout would be that either food companies would start looking for alternatives, which may be costlier, or they would change labels; in both cases they might pass on the cost to the customer.

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AFGC is right: Palm Oil Labeling Bill based on false premises

Posted by Palmhugger,

The AFGC is right. The Australian Palm Oil Labeling Bill is based entirely on false premises, equivocations and outright lies!

The fact that palm oil is grown on only 0.23% of the world's agricultural land and yet produces 30% of the world's edible oil supply offers a clue as to the underlying reasons behind this baffling attacks against the world's most benign oilseed crop, environmentally speaking.

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House Economics Committee right in recommending rejection of the Bill

Posted by Palmhugger,

The House Economics Committee, having heard representations from stakeholders and consequently better-informed on the issue has rightly recommended that the Bill be rejected by the House.

This is a ringing endorsement for the Australian government's decision to oppose the Bill.

Hopefully the rest of the House will see through the lies and misinformation being bandied about on palm oil and alleged deforestation by the environmental NGOs and vote against it too. Will good sense prevail?

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Australian Govt more level headed than opposition

Posted by Palm Oil Truth Foundation,

The Australian Govt. has shown that it is more level headed and responsible than the Abbot led opposition.

The House Committee has rejected the Palm Oil Labeling Bill as it may violate Australia's Treaty obligations with the WTO, ASEAN, Indonesia and Malaysia.

The Govt and AFGC are right. The Bill, still to be debated in the House, will increase the costs of doing business for Australian businesses and ultimately the consumer, if passed!

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