Business

Saturday July 30, 2011

Australia wants oil palm growers to adopt sustainable practices

By ERROL OH
errol@thestar.com.my


SYDNEY: The best way for Malaysia to counter the rising negative sentiment in Australia towards palm oil, says the Australian food industry, is to quickly increase the production of sustainable palm oil. One suggestion is to set a deadline for growers to fully adopt sustainable practices.

In a palm oil industry dialogue here yesterday with food manufacturers and retailers, a Malaysian delegation led by Primary Industries and Commodities Minister Tan Sri Bernard Dompok was told that Australia's food industry understood well the benefits and advantages of palm oil.

However, these businesses pointed out that there was mounting pressure to label products that contained palm oil, which made it important for the manufacturers to switch to certified sustainable palm oil.

Andrea Currie, policy and brand standards manager of Coles, a leading Australian retailer, said there was strong anti-palm oil sentiment in Australia. “It's at a tipping point,” she added.

“Coles want to support palm oil products but these have to be sustainably produced.”

Currie complained that it was difficult to source for certified sustainable palm oil in Australia.

Another large Australian retailer, Woolworths, agreed that more and more consumers were expecting products with palm oil to be labelled accordingly. He urged Malaysia to work on producing “as much sustainable palm oil as you can”.

Dompok said Malaysia was working with the Roundtable on Sustainable Palm Oil (RSPO), which has come up with the framework for the certification of sustainable palm oil, to increase Malaysia's output of certified sustainable palm oil, which has exceeded two million tonnes to date.

Last year, Malaysia produced 17 million tonnes of palm oil.

However, he said one of the challenges was that certification involved significant additional costs, and there were concerns that the consumers would be unwilling to bear the higher prices of the goods.

“Another problem is that the goalposts keep moving. When we feel that we have done something solid, the NGOs (non-governmental organisations) that are members of the RSPO will push to introduce new requirements,” he added.

Timothy Trupp, managing director of MOI International Australia, a manufacturer of vegetable oils and margarine, asked if it would be possible for Malaysia to legislate that its palm oil production become fully sustainable by, say, 2020.

That way, he explained, the Australian consumers could appreciate Malaysia's commitment to sustainable production, and eventually, the food industry could be assured that all palm oil products from Malaysia would be sustainably produced.

Malaysian Palm Oil Council president Tan Sri Yusof Basiron described Trupp's suggestion as “a fresh idea that we want to explore”.

However, he said 100% mandate for sustainable production of palm oil in Malaysia would be “almost an impossible task” because about 40% of oil palm cultivation in Malaysia was carried out by smallholders.

“Almost half of the industry doesn't know how it will benefit from RSPO certification. There is no motivation for the small farmers because none of the premium would trickle down to them,” he argued.

Aimed at consumers, politicians and the food industry, the ongoing campaign in Australia to single out palm oil as a food ingredient, revolves around the Food Standards Amendment (Truth in Labelling Palm Oil) Bill 2010.

If the Bill is passed, there will be new labelling standards for producers, manufacturers and distributors of foods containing palm oil.

The proposed change in law is based on the argument that “palm oil production results in extensive deforestation”.

Said the explanatory memorandum to the Bill: “As the major producers are Malaysia and Indonesia, this has led to the removal of wildlife habitat and has placed many species, including the endangered orang utan, at risk.”

The purpose of the legislation, according to the memorandum, is “to ensure that consumers are provided with clear, accurate information about the inclusion of palm oil in foods, and to encourage the use of certified sustainable palm oil in order to promote the protection of wildlife habitat”.

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