Thursday, June 9, 2011

Washington Dialogue on Sustainable Palm Oil – NGOs Fail to Sabotage Event

Palm oil is green and sustainable too. Just like trees, it absorbs carbon and releases oxygenRecently, 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.

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