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Focus on MSPO during Malaysia-EU free trade talks, says think tank

Free Malaysia Today - 29 April 2024

Focus on MSPO during Malaysia-EU free trade talks, says think tank

A think tank has called for the Malaysian Sustainable Palm Oil (MSPO) standard to be made the first point of dialogue between Malaysia and the European Union when discussions on a Malaysia-EU free trade agreement (FTA) resume.

During a trip to Germany in March, Prime Minister Anwar Ibrahim said he held discussions with German vice-chancellor Robert Habeck on rekindling talks about the FTA.

He also said that Malaysia is working with the EU to determine the gap in the positions and stance of both Putrajaya and the bloc for the FTA which has been postponed since 2012.

In a statement, the Center for Market Education (CME) said focusing on the MSPO standard during the FTA talks would highlight the mutual good intentions of both parties in achieving an inclusive and sustainable free and fair trade agreement.

Noting that oil palm is a source of income for over seven million smallholder farmers globally and in Malaysia, CME said that smallholder production accounts for 40% of total palm oil plantation areas in Malaysia and Indonesia – the world’s two leading palm oil producers.

“The MSPO is inclusive as it aims to bring in smallholder farmers and make them more accountable for their actions and farming practices,” said CME CEO Carmelo Ferlito.

“While MSPO shares the same objectives and goals with certification schemes like the Roundtable on Sustainable Palm Oil, the core differentiation is MSPO’s focus towards addressing the needs of smallholder farmers and the demands placed upon them.”

Ferlito said that the significantly lower cost of MSPO certification had made it more attractive to smallholder farmers that depend on palm oil for their livelihoods.

“Naturally, if it is expensive to be certified, cost-sensitive and financially limited smallholder farmers will turn away from any form of certification, depriving them of an opportunity to improve their operations in a sustainable manner and potentially impact their access to international markets,” he said.

The lower cost factor, coupled with making MSPO certification compulsory, has resulted in 96% of all palm oil farming in Malaysia being MSPO certified.

Ferlito said this meant that nearly all companies and smallholders in Malaysia produce and sell fresh fruit bunches from planted areas that are managed in an environmentally and socially responsible manner.

The MSPO scheme grades oil palm plantations, smallholdings and processing facilities to ensure there is no biodiversity loss, land conflict, deforestation and forced labour.

There have been calls for the EU to recognise the MSPO supply chain certification standard as a form of compliance for the EU Deforestation Regulation (EUDR), which was introduced in November 2021 to limit deforestation caused by the consumption of agricultural commodities and products around the world.

The EUDR lists palm oil as one of the commodities that drive deforestation and forest degradation through the expansion of agricultural land. Its implementation is expected to have a significant impact on the use of palm oil in the EU and create a negative image of Malaysian palm oil, which will lead to a reduction in exports to the EU.

 source: Free Malaysia Today