Experts say Malaysia's palm oil industry can do better

 

The palm oil industry, which has been contributing about six per cent to Malaysia's gross domestic product, can do much better, said economist and consultant in agriculture and rural development, Isabelle Tsakok.

She said the industry needs to tackle the interlinked sustainability challenges, particularly relating to environmental, climate change and social issues.

“In order to do that, it will require leadership and I urge the Malaysian government, which has enormous muscle power, to get into this in a big way as it did when it chose palm oil (to be one of the income generators to the economy),” she said during the International Palm Oil Sustainability Conference 2020 (IPOSC 2020) virtual question and answer (Q&A) session today.

Among the challenges she highlighted is the European Union’s (EU) decision to phase out palm oil in transport fuels from 2030, the reduction in biodiversity and the threat of extinction of rare species.

Tsakok, who was one of the panellists during the two-hour Q&A session, noted that the industry should find solutions to increase fresh fruit bunches (FFB) production, despite the climate change that lowers the FFB and other agricultural yields, and address the alleged labour rights violation and land grabs from indigenous communities.

The crop, she noted, has been driving agricultural transformation, inclusive growth and poverty reduction in the country, and it is the most efficient way of satisfying the growing global demand for vegetable oil as it uses one-tenth of the land of its rival crops.

However, its very success makes it controversial, she said.

“Palm oil is new to me as I am from Mauritius and we grow coconut there... so it is fascinating to me to see how powerful palm oil is to Malaysia and how it has helped to eradicate poverty.

“However, as someone who is observing the industry from the outside, I also see that palm oil has ‘two faces’. On one hand, there are many wonderful things that you are doing, and you have, but on the other hand, there are a lot of ugly things too,” she said.

She noted that notable issues include the empowerment of the B40 group in the industry -- namely the smallholders, issues of indigenous land, labour rights and deforestation.

Tsakok, who holds a PhD in Economics from Harvard University and a World Bank retiree, noted that despite the challenges, the industry can do better as palm oil is a versatile oil which has a lot to offer to the world.

Meanwhile, another panellist, IOI Corporation Bhd’s head of sustainability Surina Ismail said that working with the government is one of the best ways to manage the challenges faced by the industry.

“All along the supply chain, everybody must play their part in the upstream or the downstream sector.

“We must help and encourage the growers, especially the smallholders, to produce sustainably and get the recognition from big companies locally and abroad,” she said.

Meanwhile, commenting on the Certified Sustainable Palm Oil (CSPO), Roundtable Sustainable Palm Oil strategic stakeholder relations director Salahudin Yaacob said the certification is necessary for big and small players, allowing them to enter more markets.

“Currently, CSPO’s production is low. The government, consumers and industry stakeholders need to work together to increase awareness on the CSPO.

“We need to enforce the requirement to make sustainable palm oil renowned and this can be achieved by producing only CSPO,” he said.

Two EU representatives, Frans Claassen and Paivi Makkonen said there should be more constructive dialogues between palm oil-producing countries and the EU government.

They also stressed that having good governance to promote a healthy supply chain in the industry is crucial, as well as ensuring that no human rights are violated.

Closing the discussion, Sime Darby Plantation sustainability head Rashyid Redza Anwarudin said there is still a lot of work that needs to be done to improve the industry.

“We need to ensure the work we do is as inclusive. We have to remember that it’s an important industry in this part of the world. It has contributed in a major way to the social economy and development of the region.

“It has, more importantly, touched the everyday lives of the people,” he said.

The IPOSC 2020 is the Malaysian Palm Oil Council’s biannual conference that highlights the sustainability challenges and opportunities in the Malaysian palm oil industry.

This year’s conference is being hosted on a virtual platform, comprising two modules, in response to the global Covid-19 pandemic.

Module 1 today featured presentations from sustainability experts from the agriculture, research and palm oil sectors who shared their views on the efforts by global agricultural commodities towards achieving sustainability and carbon neutrality.

Module 2, on renewable energy, climate change and food security will take place from Oct 12-20, 2020.

- Bernama