Buffeted by challenges from all sides

KUALA LUMPUR: Environmental laws and policies in the European Union (EU) and Australia seeking to block palm oil trade and curb the growth of the oil palm industry have angered Malaysian lawmakers.

In Australia, Independent senator Nick Xenophon wants existing laws that allow palm oil to be listed as a vegetable oil to be changed to highlight palm oil as bad for health and cruel to the environment.

Three of Australia's major zoos in Sydney, Melbourne and Perth add to the chorus and have campaigned that oil palm planting leads to the decimation of orangutans and forest destruction.

The World Wildlife Fund and Greenpeace, in supporting Xenophon's motion, argued that palm oil production is the leading driver of deforestation.

Over in EU, the Renewable Energy Directive, in mandating biofuel feedstocks that reduce greenhouse gas emissions by a minimum of 35 per cent by 2013 compared to petroleum diesel, has listed down technical requirements that discriminate against palm oil.

Although palm oil has a clear advantage - 60 per cent less carbon dioxide emissions compared to fossil fuels - the EU seemed to have adopted fictitious emission figures assigned for palm oil. This has effectively blocked palm oil shipments into the continent for energy usage.

These legal developments have hit a raw nerve among Malaysian lawmakers.

In an interview with Business Times, Johor Bahru Member of Parliament Datuk Shahrir Samad opined that the EU's implementation of Renewable Energy Directive and Australia's food labelling proposal to discriminate palm oil are unjustified trade barriers to the palm oil industry.

In stating his case, Shahrir made reference to the global vegetable oils industry journal Oil World. Among all 17 major edible oils available in the world, the Hamburg-based Oil World journal's statistics show that oil palm trees occupy just 0.22 per cent of the world's agricultural area and yet, these trees produce 30 per cent of the world's edible oil supply.

The oil palm's superior productivity of four tonnes per hectare works out to be seven to 10 times that of its competitors such as soya, rapeseed and sunflower.

Shahrir is puzzled by Xenophon's ignorance or wilful disregard of these vitally important facts. "Why is Xenophon ignoring the fact that for every hectare of oil palm he condemns, he is indirectly supporting 16 or more hectares of temperate forests to be cut down only to be planted with rapeseed, soya and sunflower, so as to produce the same amount of edible oil?"

Shahrir adduced more studies from reputable science journals detailing the oil palm trees are actually the most environmentally friendly among all oil crops. This is because on a per-litre basis, palm oil production requires less energy, land and fewer fertilisers or pesticide usage compared to other vegetable oils.

Oil palms have productive lifespan of 20 to 30 years while its competitors like rapeseed, soya and sunflower need to be uprooted every four months during harvest and that contributes to soil erosion.

On top of these biological advantages, Indonesia and Malaysia - both major palm oil producers - have put aside 25 per cent and 50 per cent of their respective landmass, as forest cover and established extensive wildlife sanctuaries. "Why do lawmakers of developed nations and their environmental activists choose to ignore the fact that both Malaysia and Indonesia are being socially responsible?"

"When did the developed world collectively go through the looking glass and end up in this distorted view of the oil palm industry?" Shahrir asked.

Australia's Prime Minister Julia Gillard should make it her agenda to ensure the Australian public is being told the truth in food labelling and the zoos' misguided campaigns against palm oil. This is because one of the biggest risks to Australia's economic growth is the cost to the food processing industry which rely on imports to be competitive, and consumers who spend more of their disposable income on less.

If Australia forges ahead to discriminate palm oil from other vegetable oils on food product labelling, Shahrir opined such a move will not save orangutans or the environment but will only serve to make food unnecessarily expensive to the Australian public.

This is because there are already numerous orangutan sanctuaries throughout Malaysia and Indonesia that also serve as habitats for other wildlife. Furthermore, oil palms like any other trees in the jungle, actively sequester carbon dioxide and produce oxygen for the world to breathe.

"If the zoos in Australia have more orangutans than the 11,000 odd in our jungles, only then can they claim to be true protectors of our orangutans! Otherwise, it's just a disguised white superiority that they always know better than others," Shahrir said.

He then highlighted that the EU and Australian lawmakers should be reminded of the World Trade Organisation's (WTO) non-discriminatory clause of Article 1 of General Agreement on Tariffs and Trade, which provide that a member cannot treat a product of another country more favourably than the products of other WTO members.

There is also WTO's Article 111, requiring equal treatment for foreign and domestic goods and services.

In a separate interview, Kapit Member of Parliament Datuk Alexander Nanta Linggi concurred with Shahrir.

He said developed nations like the EU and Australia should not be erecting green protectionist measures to kill the growth of the oil palm industry because it is causing serious disruptions to global food supply.

Just like rapeseed and soyabean, the oil palm industry is far from perfect and seeks its own advantage. But holding oil palm planters accountable for imagined environmental problems is beyond logic. Linggi said, it reflects a dangerous refusal to deal with the current crisis of global food shortage and hunger.

Last week, Asian Development Bank, in its "Global Food Price Inflation and Developing Asia" report, said fast and persistent increases in the cost of many Asian food staples since mid-2010, coupled with crude oil reaching a 31-month high of more than US$113 per barrel, are a serious setback for the region, which has rebounded rapidly and strongly from the global economic crisis.

The soaring prices are being felt in rich and poor nations alike, with Australia recording the biggest jump in inflation in five years, last quarter.

But the developing economies of Asia - home to two thirds of the world's poor - suffer the most. In the first quarter of 2011, food inflation in Asia averaged 10 per cent. The bank's study found that a 10 per cent rise in domestic food prices in developing Asia, home to 3.3 billion people or almost half of the world's population, is pushing an additional 64 million people into extreme poverty based on the US$1.25 a day poverty line.

In referring to the bank's report, Linggi confirmed that poor families in his Kapit constituency, are already spending more than 60 per cent of their income on food. "Higher food prices further reduce my people's ability to pay for rising cost of medical care and tertiary education for their children," he said.

Apart from external challenges, Linggi explained how weaknesses in implementation and enforcement is burdening oil palm planters living in native customary rights (NCR) land.

As a lawmaker, Linggi sees the good intentions of the Sarawak state government agencies like the Land Custody and Development Authority (Pelita) and the Sarawak Land Consolidation and Rehabilitation Authority (Salcra) to develop NCR land to lift rural folks out of poverty. But this can only be achieved with utmost sincerity to improve the process.

"I urge Pelita and Salcra, in managing such joint ventures, to be more engaging with participating natives and not burden them with inefficiencies. Government officials should be more conscientious when it is NCR land that is being developed. Investors, too, should accord equitable and deserving dividends to native shareholders," he said.

Linggi reiterated that many who live on NCR land, stand to uplift themselves from poverty through sustainable oil palm planting. "When I say sustainable, I mean tighter enforcement of the laws governing land boundary rights, good agriculture practices and workers' rights that have already been enacted by Parliament," he added.

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