CME: The EU should work to recognize MSPO certified Palm Oil in fight for environmental sustainability.
WEDNESDAY, 31 May 2023: According to the Center for Market Education (CME), the European Union, industry stakeholders and consumers across the world should make an effort to recognize the Malaysian Sustainable Palm Oil Certification Scheme (MSPO) as an important contributor in the battle against deforestation.
Furthermore, CME calls on the EU to recognize the hard work Malaysia has done to make its palm oil industry more environmentally sustainable.
CME considers important to raise this point now as Malaysia begins an official eight-day visit and trade mission to the EU in Brussels, Belgium, and London, led by Deputy Prime Minister and Plantation and Commodities Minister, YB Datuk Seri Fadillah Yusof.
Dr. Carmelo Ferlito, CEO of CME, said: «If the EU is truly serious about addressing deforestation issues and ensure the sustainability of palm oil, then it should collectively seek to accept, embrace and promote MSPO as a recognized contributor towards environmental sustainability for the whole sector».
Malaysia’s trade mission is in response to the EU bringing in stringent anti-deforestation rules (EUDR) which aims to prevent deforestation due to agricultural activities. However, the implementation of EUDR will negatively impact free and fair trade as it targets agri-commodity products which could impact millions of smallholders from developing countries, potentially impacting global supply chains.
According to the CME, MSPO is an equitable and practical certification scheme that can further strengthen sustainability practices throughout the palm oil production value chain. «The MSPO is inclusive as it aims to bring in smallholder farmers and make them more accountable for their actions and farming practices», Dr Ferlito added.
He continued: «Oil palm is a source of income for over seven million smallholder famers globally and in Malaysia, smallholder production accounts for 40 per cent of total palm oil plantation areas».
«While MSPO shares the same objectives and goals with certification schemes like the Roundtable on Sustainable Palm Oil or RSPO, the core differentiation is in MSPO’s focus towards addressing the needs of smallholder farmers and the demands placed upon them». He went on to add, «For one, the significantly lower cost for MSPO certification has 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», Dr Ferlito 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. This means that nearly all companies and smallholders in Malaysia are producing and selling Fresh Fruit Bunches (FFB) from a planted area that is managed in an environmentally and socially responsible manner.
«MSPO is also a mandatory organization that requires all participants to adhere to its rules and standards, which are comprehensive and stringent», Dr Ferlito said. Dr Ferlito further explained that the MSPO certification scheme requires independent environmental, social impact assessments to be conducted and reviewed prior to land conversion and replanting, and strictly states that no forms of forced or trafficked labour, or child labour, are used.
«The MSPO Certificate is only valid for five years and comes with annual surveillance audits. Moreover, the certification scheme itself is reviewed once every five years through a multi-stakeholder consultative approach as a means to remain relevant and updated with industry best practices».
Dr Ferlito added: «The MSPO is not meant to compete with or replace existing certifications schemes. Nevertheless, we believe that sustainable palm oil can be strengthened further through greater involvement of every participant in the supply chain including nurseries, smallholders, large plantations as well as mills and refineries».
«To achieve this, policymakers across the world must be progressive in accepting and promoting an inclusive, localized and comprehensive certification scheme like MSPO that can affect tangible change. After all, it all boils down to a matter of supply and demand», Dr Ferlito concluded.
About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia, and Jakarta, Indonesia.
As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces.
In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities.
Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions. Visit https://marketedu.me/.