‘We need to be prepared’: Asian markets will be increasingly concerned with palm oil sustainability - MPOC Exclusive Part 2

18-Aug-2021 - Last updated on 09-Sep-2021 at 13:12 GMT

The new executive leadership team at the Malaysian Palm Oil Council (MPOC) says Asian markets are increasingly demanding sustainability improvements in the sector. ©Getty Images

Related tags Malaysia Palm oil Sustainability

The new executive leadership team at the Malaysian Palm Oil Council (MPOC) says Asian markets, and not just western countries as has been the norm, are increasingly demanding sustainability improvements in the sector.

In part one of our exclusive interview with the new team, MPOC CEO Datuk Dr Wan Zawawi Wan Ismail told us of plans to diversify Malaysia’s palm oil exports beyond just the current heavyweight importers China and India – but also emphasised these would remain important markets for Malaysia.

In addition, MPOC Science and Environment Director Dr Ruslan Abdullah has told us that the council expects there to be an increased focus on sustainability in these markets.

“China and India have not highlighted any pressing sustainability issues to us so far, but we do anticipate some changes will take place in terms of their focus on this area in the near future,” he said.

“This is based on various activities we have noted happening there recently, such as the establishment of a Roundtable on Sustainable Palm Oil (RSPO) office in China, the launch of the China Sustainable Palm Oil Alliance, and the India Palm Oil Sustainability Framework.

“All of these things indicate a move towards sustainability, and that sustainability will become a major driving force for palm oil in these countries moving forward.”

All along, palm oil sustainability on the importers’ end has largely always been discussed with western countries, particularly the European Union, in mind as it has been the source of a great deal of tension – but the MPOC does not believe that the problems will be the same when it comes to Asia.

“China and India are still price-sensitive markets that consume a lot of palm oil, [plus] we already are in the midst of many sustainability programmes from an initiative to plant one million trees to the conservation and ‘rewilding’ (breeding in captivity then training to survive in jungle before releasing) of wild animals such as the Malayan tiger and increasing the use of technology to prove traceability and sustainability,” said Dr Ruslan.

“Two of the animals that has often been used by conservationists to attack palm oil, saying that the populations have dwindled due to deforestation, are the orang utan and Borneo pygmy elephants, and we have also embarked on a population survey in Borneo for both of these animals to prove that the population has in fact not only not decreased, but has increased over the years.

“So even as sustainability becomes more important in our export markets in Asia, we and the palm oil industry in Malaysia need to be prepared to address these future developments, and are taking the required steps now to do this.”

Challenges in the industry

That said, even as the council gears up to meet changing sustainability demands, existing challenges such as relentless campaigning from the EU don’t look to be going away any time soon, and indeed the MPOC has found these along with the COVID-19 pandemic to be a mounting hurdle.

“There is unfortunately a growing trend for firms including food manufacturers in western countries to remove palm oil from their supply chains entirely, instead of switching over to Certified Sustainable Palm Oil (CSPO) which could be an option if sustainability is the main concern,” said Dr Ruslan.

“We’re seeing more products being labelled with this ‘No Palm Oil’ label – our question is, is this even legal? Some of these products have even made their way into high-end supermarkets in Malaysia, and we are working with stakeholders on an interministerial programme to do something about this.

“The EU has also clearly been getting more aggressive in putting sustainability-related regulations in place to phase palm oil out in the long run, and our issue is that this is not being done in consult with producing countries at all – a lot more engagement is needed between the EU and palm oil producers so we can acknowledge this and work on it together.

“COVID-19 has also confounded the issue as we are unable to meet clients and stakeholders personally whilst all these challenges are ongoing.”

Datuk Dr Wan Zawawi added that COVID-19 is also leading to labour issues in Malaysia, as lockdowns are in place so workers cannot get to farms to work.

“This is affecting production and output – the price of palm oil is high and people are looking for palm oil, but production is less than it would normally be due to these labour issues,” he said.

Divine blessing

Despite these challenges, the industry has still pledged to put up a good fight – earlier this year, the Malaysian Ministry of Plantation Industries and Commodities (MPIC) launched a campaign dubbed ‘Sawit Anugerah Tuhan’ (Sawit Divine Blessing / Palm Oil Is A Divine Blessing) which is being championed by the MPOC.

“This is an effort to educate the general public more on the benefits of palm oil, the career opportunities to be found, and its importance to the country,” said Dr Ruslan.

“The other area of focus is to increase the use of different technologies for traceability and sustainability such as blockchain and AI, Industry 4.0 and big data, to increase transparency [and efficiency] – the Malaysian Palm Oil Certification Council (MPOCC) is developing the technology, and we are working to advocate the application and adoption of this tech by producers.”