A Scam Behind the Australian Palm Oil Labelling Bill?

Western NGOs have been using the Victoria Zoos network to mount anti palm oil campaigns in Australia by making allegations linking palm oil production to deforestation and orang utan habitat destruction. Heightened publicity is needed in these campaigns and signatures of sympathizers have been carefully obtained to show public support. The campaign provides Western NGOs a platform for a much needed publicity profile. A Bill was then tabled in the EU and Australian Parliament seeking for palm oil to be mandatorily labeled instead of being included under the vegetable oils category as is customarily used for labelling all vegetable oils used in food products.

In the original version of the Bill which was submitted to the Australian Senate, certified sustainable palm oil was required to be labeled separately when RSPO certified palm oil is used in food products sold in Australia. Although the term referred in the Bill is to provide for “right of consumers to know to enable them to make an informed choice”, the intention was to encourage the use of certified sustainable palm oil while normal palm oil would be negatively perceived through the NGOs anti palm oil campaigns.

Dialogue on Sustainability, Deforestation and Global Warming

The writer had the pleasure of chairing a joint Q&A session with the Hon. Malaysian and Indonesian Minister

During a recent series of meetings between Malaysian palm oil delegation members and European Ministers, Members of Parliament, EU Officials, experts and NGO representatives, it became clear to me that some of the European dialogue partners have very strange perceptions and views relating to deforestation, sustainability and carbon dioxide or green house gas (CHG) emissions. I took note of their views and tried to analyse why they were often very much opposed to the views of the palm oil producers who are involved in the day to day operations of the oil palm industry.

Question from EU Member of Parliament: - “Agricultural crops usually draw too much water from the soil resulting in water shortages which later lead to desertification. Will oil palm cultivation lead to water stresses resulting in unsustainable production?”

From my experience, such a question is best answered if the questioner can visit a typical oil palm plantation in Malaysia. As the Hon. MEP was later informed, the oil palm grows well in the tropical climate of Malaysia where evenly distributed rainfall exceeds the ideal level 2000 mm per year. As there is no irrigation needed water is not diverted away from water bodies therefore avoiding water shortages and stresses. Even water used for processing during oil extraction is recycled, after treatment, to waterways thus avoiding environmental problems.

The lack of knowledge on oil palm plantation and using other temperate crops as bench mark seemed to be the reason for the inaccurate perception and suspicious nature of the question posed by the Hon. MEP.

Question from a big buyer of palm oil: - Why can’t the palm oil industry stop converting forests for oil palm plantations, and instead work hard to increase yield per hectare which ultimately will increase supply sufficient enough to meet the expansion in demand for palm oil?

The gentleman was basically posing a theoretical question although he was very serious. In theory, it is possible to double the yield of the palm in Malaysia and individual plantations have regularly achieved such results. His own company which used to have oil palm plantations in Malaysia tried to increase the yield for their estates and surrounding smallholders but failed to achieve substantial improvements. It is even more difficult to have the whole industry to double the national average yield because of the heterogeneous players of small-scale farms and big plantations.

To demand a moratorium on deforestation is too premature and will be punitive to developing countries. Developing countries are yet to develop their agricultural sector fully and a state like Sarawak has only 8% of its total land area under agriculture compared to 70% in the UK. Large tracks of degraded forest land can be developed into agricultural areas with the potential of rehabilitating the land into sustainable agricultural areas and the revenue generated will help preserve the remaining forests from unwarranted encroachments and subsequent degradation. Oil palm is the best crop to help rehabilitate the ecology of degraded tropical land while bringing remunerative income.


Although there are many types of forest classification in Malaysia, and they can serve different functions including for agriculture, our dialogue partners in the EU seem to know only the phrase “tropical rain forest” and hold the view that these forest must be preserved at all costs. In Malaysia every area of land was originally rain forest and the present non forest areas will revert to become rainforest if left undisturbed for about 20 years. A moratorium on no deforestation will simply mean no development, and the country will remain underdeveloped forever.

A large turnout at the World Sustainable Palm Oil Conference 2008 in London

It is better for NGOs and green MEPs in the EU to campaign hard to recreate the over-deforested (agricultural)land of Europe into reforested areas. The objective of maintaining biodiversity and sequestering carbon through reforestation in Europe would contribute significantly to prevent global warming, and this sets a good example for developing countries.It would even be better if the EU countries can follow the standard set in Malaysia and Indonesia where forest areas exceed 60 % of total land area while still managing to produce and export vegetable oils (palm oil and palm kernel oil) accounting for 75% of world net exports of oils and fats.

A common question asked by the dialogue partners during the meetings was how the EU authorities arrived at such a damaging typical default figure of 32 % carbon emission saving for palm oil compared to petroleum fuel, which makes its look the least desirable raw material for biodiesel production.

Apparently, an incomplete equation and a punitive assumption of processing in-efficiencies were used to show low default values for palm oil. The typical default value for palm oil was even lower than the accepted thresh-hold carbon emission saving figure of 35 % stipulated in the proposed EU biofuels directive.

It is illogical for a perennial crop with an all-year-round lush green canopy similar to that of a planted forest type of environment, and that yields ten times more oil per hectare compared to soyabean, to be given an inferior carbon emission saving default figure of 16%.

A study using the Life Cycle Inventory Technique by Dr Chen, a scientist with the Standard and Industrial Research Institute of Malaysia (SIRIM) showed that palm oil is a net carbon sequester when used as biodiesel. It means that palm biodiesel achieves carbon emission savings of more than 100 % when compared to petroleum diesel, and not 16% as assigned by the EU authorities. This is derived from the carbon sequestration and multi co-product characteristics of the oil palm, and if confirmed by other independent studies, this new figure will mean that only palm oil is fit to be used as biodiesel while the other competing oils will only have a marginal carbon emission saving effect and most of them will not meet the new thresh-hold carbon emission saving of 45 % proposed in the latest EU biofuels directive.

How Much Agricultural Development is Right for a Sustainable Future of a Country

Image source: Malaysian Palm Oil Council

For a tropical country such as Malaysia, every inch of land would be under forest or would have been under forest cover sometime in the past. I am always willing to acknowledge that all our agricultural activities, our industrial land, our towns, cities, highways and airports have replaced forests and have affected biodiversity or have released green house gases to the atmosphere . Every country has sacrificed some of their land for agricultural and other uses over the years when they undergo the process of development. Some use their land extensively for agriculture, others don't. Others have not yet the time or the funds to develop their land, as is the case with many developing countries.

Current debate by some NGOs is tending to link agricultural activities with deforestation. To have a healthy debate, there must be some definitions. For example, what percentage of our country's land area is allowed for agriculture, and what percentage should be conserved as forests. Would this percentage be uniform as an international benchmark, or should it be different for developed countries as compared to developing countries. If it is different who is to determine what is the right percentage, especially for those developing countries which since achieving independence from their colonial masters have not been able to develop their land for agriculture.

In Malaysia, oil palm and rubber are major agricultural crops. Some NGOs try to alledge that oil palm causes deforestation, but they never made such critisms on our rubber industry. If we cannot grow oil palm we surely will grow rubber, cocoa, coconuts etc on our agricultural land, and get on with our daily life. If we use 24 % of our land for agriculture, is that wrong. What if we use 30% for agriculture. Why cann't we follow the UK which used up to 70 % of their land for agriculture and enjoy a good standard of living as a result. Are we not allowed to enjoy a good standard of living? Put it in another way, if the UK were to only use 8%of the land for agriculture as in Sarawak, it is likely that their standard of living would be lower than what they enjoy for now.

Why don't we set up an international standard for the percentage of agricultural land allowed for each country. Let us start with a range of 30 to 50 % allowed for conversion to agriculture. In terms of carbon footprint, related to global warming, those countries keen to comply with the target and bring their agricultural land ratio to below 50% can reforest their land accordingly. Those countries still having less than 50 % of their land under agriculture can be allowed to develop according to their development needs. In times of food shortage, it is important to expand food production by making land available for agriculture. If 50% of arable land is allowed for agriculture and up to 50 % left as forest, there will be a fair balance for wildlife habitats and human food production capacity.

It will be good if the NGOs provide leadership in coming out with the guidelines. Otherwise, we argue on different assumptions and understanding on what constitute deforestation. Some even post personal criticisms from such misunderstanding. It is important to have an open debate. In our recent sustainability conference, I raised a few bold ideas in front of 500 attendees, but no one was bold enough to challenge my statements. Later some criticisms were raised in the NGOs websites. So much for being bold or otherwise.

Carbon Debts

Image source: Pbase.com

Current debate on sustainability and global warming relates to green house gases emissions. Those experts with vested interest to potray negatively on targeted industries are devising and manupulating various formulae and asssumptions to potray undesirable carbon emmission figures for their targeted industry while carefully ajusting to ensure their national industries competing in the related industries are not affected. Palm oil industry has been facing this manupulative expert data for sometime now in the EU and USA.

One simple approach used is to arbitarily establish a cut-off date in counting the start of carbon emission. The RSPO wanted the cut-off year to be 2005. The EU is proposing 2007. Both dates will exclude the agricultural areas of the EU or USA from having a carbon debt based on the removal of the original forest on the land before it was turned into agriculture. Competing crops from these countries in the form of rapeseed or soya will have a head start in their comparison with palm oil when relating to their carbon emission numbers.

I would propose that all land when turned into agricultural use will carry a carbon emmission debt based on the original forest that was cleared. The cleared forest which acted as a carbon sink had released carbon dioxide to the atmosphere. If the land is reforested the carbon debt is repaid. Developed countries can opt to reforest their converted land rather than ask developing countries to sacrifice development through no deforestation.

This recognition of a past carbon debt on every hectare of land under agriculture is a fairer basis as the starting point for calculating carbon emission numbers of various crops. If I have some support on this idea, it may be worthwhile to push it as a standard for international adoption.