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.
Testimony of Dr Yusof Basiron Chief Executive Officer of the Malaysian Palm Oil Council (MPOC) to the Hearing of the Senate Community Affairs Committee (Truth in Labelling - Palm Oil) Bill 2010
Thank you, Chairman for the opportunity for the Malaysian Palm Oil Council to appear before this Committee and to participate in the consultation regarding the Truth in Labelling - Palm Oil Bill, currently being considered by the Committee. I am also authorized to appear before this Committee representing the Ministry of Plantation Industries and Commodities of Malaysia.
Before I give some background to this issue, there are some points I would like to make.
Last week, the National Secretary of one of Australia’s most influential trade unions said that his union would not support the Australian Government if just one of the members of his union lost his or her job as a result of Government carbon policy.
Other unions have made similar statements.
My organization, and indeed the government of my nation, would take the same view if the livelihoods of some 570,000 Malaysians were threatened.
This Bill, and the campaign that has been associated with it, has that potential.
Like your trade unions, and like your constituents, our industry will act to protect the jobs and the livelihoods of those who work within our industry and their families.
Truth in labelling should be driven by health issues, not political expedience, which is behind some of the campaigns revolving around this Bill.
It 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? The commitment of our industry is sustainability and growing our industry. Non sustainability would inhibit our industry’s growth.
Without that growth the lives of our industry’s workers and their families would not improve.
Don’t those who work in our industry have the right – and the opportunity – to improve their way of life?
Don’t they deserve the dignity of providing for their families?
Don’t they, and their children, deserve a more prosperous future?
Fortunately, with the opportunity the Committee has given me and my colleagues through this appearance the views of our industry, its workers and their families will be heard in this Parliament.
As well, by us presenting to this Committee, we can address the misinformation, disregard for the truth and misrepresentation that have been a feature of the campaign in support of the Truth in Labelling – Palm Oil.
This Committee, and through it the Parliament of Australia, will have before it fact, not fiction, truth not wild allegation and the views of the actual workers in our industry and not the views of those who presume to understand the day to day life of the people who work in our industry – the human face of our industry.
By way of better understanding on the part of the Committee, I am the Chief Executive of the Malaysian Palm Oil Council, which is a Malaysian Government authority tasked with the promotion and expansion of the palm oil market. MPOC considers this Bill to be based on misleading claims, erroneous statistics and is directly aimed at harming the Malaysian economy and Malaysia's largest agricultural export - palm oil.
In particular, I wish to note to the members of the Committee that this Bill will 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 greatest impact of this Bill will be to single out palm oil as the only product in Australia to mandatorily be labelled for reasons other than health or nutrition, and to severely hinder Malaysian Government attempts to utilise palm oil as a means for alleviating poverty in our country.
Our nation is not resource rich like Australia.
We do not have mountains of iron ore and other minerals to underpin our national economy and the prosperity of our citizens.
Palm oil is a major commodity in our national economy.
We have developed markets and we have grown the industry, sustainably and for the betterment of our people.
It is an industry of which we are proud and one which we intend to grow.
There are a number of claims that have been made regarding palm oil as a generic product, which are completely unfounded. Malaysia is the second largest exporter of palm oil in the world.
I wish to object to this Bill firstly because it seeks to classify palm oil as a single generic product based on the environmental impact of production methods without differentiating between country of origin. This is extremely misleading and defeats the stated purpose of the Bill, which is to protect the environment.
In relation to the erroneous and misleading claims made in support of the Bill, these issues have been addressed as a part of the Malaysian Government submission to the Committee.
However, I will go briefly over these claims one more time, merely to highlight the disingenuous nature of this piece of legislation. Palm oil cultivation does not cause deforestation in Malaysia. 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.
Palm oil cultivation does not threaten Orang-utan populations in Malaysia.
In Malaysia, large tracts of forests are being preserved permanently.
For every hectare of oil palm, the country preserves four hectares of permanent forest, which is a very healthy balance in terms of land use policy. Even the habitats of the orang- utans are preserved as the States of Sabah and Sarawak maintain about 50% or more of their land area under permanent forest.
The Sabah and Sarawak State governments have gazetted a number of forest areas known to contain higher populations of orang-utans as wildlife sanctuaries, national parks or forest reserves. Leading conservationists have noted that the primary threats to the orang-utan in Borneo are poachers, hunting by local people, poor regulation of existing conservation laws and mining. The Malaysian government and the palm oil industry area actively advancing programs to protect the orang-utan.
Palm oil is an extremely sustainable and viable plantation. It produces more oil per hectare of land, requires less fertilizer, generates 10 times more energy than it utilizes and also sequesters more carbon than other major vegetable oil crops. Palm oil also returns a higher income per hectare than almost any other agricultural crop.
Palm oil also has significant health benefits. While proponents of this Bill have made much of the saturated fat content of palm oil, I note that Australian consumers are already given access to the total saturated fat content of foods through the nutrition panel. Palm oil is trans-fats free.
Trans-fats have been banned by many sub-national Governments in the United States for being more harmful to heart health than saturated fats. I find it strange that proponents of this Bill would seek to mandatorily label palm oil on nutritional grounds at all when such a move, when combined with western environmentalists anti-palm oil campaigns, is more likely to harm Australian consumers' health than improve it.
Finally, the Malaysian Government wishes to stress again the importance of palm oil for the Malaysian economy and our efforts to alleviate poverty.
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.
I note that the Bill recommends the use of sustainable palm oil or CSPO marking to indicate sustainable oil as a differentiating factor between countries or modes of production. I would however note to the Committee that the process of being certified under the Roundtable for Sustainable Palm Oil is highly costly for smallholders.
Furthermore, any labelling of palm oil whether indicated as sustainable or not, will significantly harm the Malaysian palm oil industry when combined with highly funded western environmentalist anti-palm oil campaigns.
In conclusion, I wish to endorse the formal policy of the Australian Government and Department of Foreign Affairs to support economic development of countries in ASEAN and in APEC economies by facilitating and promoting economic growth, trade and investment.
I ask that the Committee sees fit to continue this policy for the sake of the Malaysian people.
If there are any questions any of the Senators have, I and my colleagues are ready to answer them.
Thank you again for this opportunity.
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