Palm oil importing countries are increasingly emphasizing the need for sustainable palm oil products. Accordingly, the demand for sustainable palm oil products will continue to rise.
The European Union (EU), one of Malaysia’s major importers of palm oil, states that only sustainable palm oil can enter the European market. The Amsterdam Declaration, launched in 2015, requires all palm oil shipped into Europe from 2020 to be certified as sustainably produced.
The Amsterdam Declaration also supports the private sector commitment to a sustainable palm oil supply chain by 2020. The EU imported 1.937 million tonnes of palm oil from Malaysia in 2020. For the months of January and February this year, it purchased a total of 205,385 tonnes of Malaysian palm oil.
To ensure the production of palm products meets international sustainability requirements, the government launched the Malaysian Sustainable Palm Oil (MSPO) certification in 2015.
The MSPO is a move towards creating a globally accepted sustainability system and branding Malaysian-owned palm oil which will be accepted as the preferred choice by global customers. This opens up wider market access for Malaysian sustainable palm oil in importing countries.
The implementation of the MSPO, which is mandatory from 1 January 2020, ensures that the country’s palm oil industry meets international sustainability requirements that cover the entire supply chain, from growers to manufacturers, traders and retailers.
This certification scheme provides general principles for sustainable palm oil production that encompass the three pillars of sustainability, which are people, planet and profit.
Therefore, sustainable palm oil production does not involve deforestation, peat cultivation, and exploitation of workers as the purpose of MSPO certification is to reduce the social and environmental impact.
As a result of various efforts undertaken by the Ministry of Plantation Industries and Commodities and its agencies, the MSPO certification scheme is now gaining global recognition.
The biggest success was when the MSPO scheme received recognition from the Tokyo 2020 Olympic and Paralympic Games Organising Committee as one of the sourcing codes of sustainable palm oil procurement for the games (now postponed to 2021).
Following this sourcing code, the Tokyo 2020 Organising Committee (TOC) will put sustainability into the heart of preparations and operations for the Tokyo 2020 games.
The TOC will work towards expanding initiatives similar to this sourcing code and achieving widespread public recognition of the importance of sustainability to create a society that practices sustainable consumption and production in line with the Sustainable Development Goals.
The TOC has made public the April 2020 Pre-Olympic Sustainability Report on the Tokyo 2020 official website which also reports the latest status of MSPO, Indonesian Sustainable Palm Oil (ISPO) and Roundtable on Sustainable Palm Oil (RSPO) certification.
Of the three sustainable palm oil certifications, only the MSPO and the Malaysian government’s efforts in assisting the smallholders were highlighted by the TOC as one of the case studies in the report.
This collaboration between MPOB and TOC has successfully enhanced the image of Malaysian palm oil and MSPO on the world’s largest international sports stage.
MPOB and the Malaysian Palm Oil Certification Council (MPOCC) have also held discussions with the Japan Oil & Fat Importers & Exporters Association (JOFIEA) to coordinate the MSPO Simple Verification Scheme. JOFIEA, on behalf of Japan, procures MSPO-certified palm oil for use during Tokyo 2020.
The scheme will also be a benchmark and reference for the Government of Japan to adopt MSPO in palm oil procurement in the future, after Tokyo 2020.
Sustainable palm oil
Malaysia has started exporting MSPO-certified sustainable palm oil to Japan. Currently, the demand for MSPO-certified palm oil from Japan is increasing. Japan imported 433,022 tonnes and 77,053 tonnes of Malaysian palm oil in 2020 and the first two months of 2021, respectively.
Meanwhile, India has adopted the MSPO standard as a reference in the development of the Indian Palm Oil Sustainability Framework (IPOS) by the Solvent Extractors Association of India (SEA).
To that end, Malaysia is working closely with SEA and Solidaridad Network Asia Limited (SNAL) to develop sustainable palm oil standards in the Indian market. India imported 2.745 million tonnes of Malaysian palm oil for 2020. For the first two months of 2021, India purchased 284,404 tonnes of palm oil from Malaysia.
Malaysia, through MPOCC, has also signed a memorandum of understanding with the China Green Food Development Center (CGFDC), aimed at allowing CGFDC to study the MSPO certification scheme before it is certified as a certification scheme that can be used for the procurement of green food resources by China.
Meanwhile, China and Malaysia have also agreed to promote sustainability requirements for MSPO-compliant palm oil products. China has stated that it will encourage its enterprises to increase imports of Malaysian palm oil and other products in accordance with market regulations.
China purchased almost 2.731 million tonnes of palm oil from Malaysia in 2020. For the first two months of 2021, it imported 197,599 tonnes of palm oil from Malaysia.
In addition, the signing of a letter of intent between the Malaysian government and the Dutch government for the implementation of the National Initiatives for Sustainable and Climate Smart Oil Palm Smallholders (NISCOPS) project is an initial step taken by the Malaysian government in obtaining recognition of the MSPO.
The implementation of the NISCOPS project in collaboration with non-governmental organisations such as the Solidaridad Network Asia Limited (SNAL) and IDH – the Sustainable Trade Initiative, is expected to assist oil palm smallholders in sustainable management practices.
The government’s efforts to ensure 100 per cent MSPO certification for palm oil production will also see Malaysia moving towards achieving the United Nations Sustainable Development Goals 2030 which drive sustainable, inclusive and equitable economic growth.
The MSPO certification will ensure higher productivity, quality yields and greater access to international markets and, in turn, contribute to higher incomes, especially for oil palm growers.
Therefore, independent smallholders who have yet to obtain their MSPO certificates are urged to immediately register with MPOB for certification purposes. The failure to register for MSPO certification will result in them facing legal action, including revocation of their MPOB licences.
The implementation of the MSPO provides greater opportunities for all, reduces inequality, and improves living standards and the safety of workers as well as sustainable management of natural resources. MSPO certification registration can be done online at mspo.mpob.gov.my or at MPOB branch offices nationwide.
Dr Ahmad Parveez Ghulam Kadir is Director-General of the Malaysian Palm Oil Board.