Australia’s move, a bad precedent, says Gapki

This is written by Linda Yulisman and published in The Jakarta Post.

JAKARTA: Australia’s proposed palm oil bill requiring products containing palm oil to have explicit labels is discriminatory, and could become a bad precedent for other importing countries, local palm oil producers say.

Indonesian Palm Oil Producers Association (Gapki) chairman Fahdil Hasan said on Monday in Jakarta that the new law could be adopted by other countries, and become a reason for consumers to stop buying palm oil, an important raw ingredient for the food industry.

“The bill will create and spread a negative perception of palm oil as detrimental to human health and other countries may follow the move, and consider that such a perception is true,” he told The Jakarta Post in a telephone interview.

He added that although Indonesian palm oil exports to Australia were relatively small compared to other countries, local producers had expressed concern about the regulation’s impact on buyers’ perception of palm oil.

Trade Industry Ministry data showed that last year, Indonesia, the world’s largest palm oil producer, exported 80 tons of palm oil only to Australia with a total value of US$73,000. Total palm oil exports reached 15.6 million tons, valued at $16.4 billion last year, according to Gapki’s data.

Fadhil said the proposed bill was discriminatory and would potentially breach the rules of the World Trade Organization (WTO). “It is discriminatory toward palm oil as there’s no scientific evidence to support the idea that palm oil damages human health,” he said, adding that scientific research showed that palm oil was beneficial to human health.

Currently, the Australian Parliament is intensively discussing the Food Standards Amendment (Truth in Labelling-Palm Oil) Bill 2010. According to the parliament’s website, the bill “amends the Food Standards Australia New Zealand Act 1991 to require Food Standards Australia New Zealand to develop and approve labeling standards to be used by food producers, manufacturers and distributors of food containing palm oil”.

It says that one of the main considerations for the labeling requirement is  that allowing palm oil to be listed as “vegetable oil” on food packaging is misleading to consumers” and “that manufacturers should be encouraged to use sustainable palm oil in their production process and subsequently use the status of “Certified Sustainable Palm Oil” under this Bill”.

Last week, the Indonesian government stated its objection to the bill through a letter on June 27. Indonesia's Trade Ministry’s bilateral trade cooperation director Pradnyawati said that palm oil was proven scientifically to have no trans fatty acid and instead had high stability for oxidation and Omega 9, which could reduce cholesterol and low-density lipoprotein.

“Some Indonesian trade partners have acknowledged the benefits of palm oil to health. The US and Canada have even legitimated the labeling of food products containing palm oil as trans fat free products,” she explained.

Besides, Pradnyawati said, Indonesia was committed to produce sustainable palm oil through, among others, applying the Indonesian Sustainable Palm Oil certification scheme.

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