01/08/2011 (The Australian)  - ALTHOUGH the Malaysian government has signed up to an asylum-seeker deal with Australia, it has at the same time sent a minister to lobby against a parliamentary move he says threatens his country's biggest rural industry, palm oil.

The Minister for Plantation Industries and Commodities, Tan Sri Bernard Dompok, attacked Australian legislation requiring palm oil to be identified on labels as "pandering to the green view of the world".

The Truth in Labelling -- Palm Oil Bill, passed last month by the Senate and now on its way to the House of Representatives, has been driven by the independent senator Nick Xenophon.

The legislation has received strong support from the Greens, the World Wildlife Fund, Zoos Victoria and Greenpeace as well as crucial backing in the Senate from the Coalition.

Senator Xenophon said he wanted consumers to know if their food contained palm oil, more generally labelled as "vegetable oil".

Palm oil, he said, may be produced through deforestation that threatened the habitats of endangered orang-utans in Malaysia and Indonesia, which together produced 88 per cent of the world's output.

Mr Dompok told The Australian Malaysia, which provides 39 per cent of the world's palm oil, employed 570,000 people in plantations and a further 290,000 in downstream industries, chiefly making the oil. "The industry has helped a lot of our people to come out of poverty," he said.

He said Malaysia, which had national parks and world heritage sites, was "very conscious of our need to preserve our own forests", which cover 55.7 per cent of its total area, well above the 50 per cent it guaranteed to retain at the 1992 Rio de Janeiro Earth Summit.

Plantations covered a further 14 per cent of Malaysia, he said. All land used for agriculture, including for palm oil, must be registered and licensed, he said.

"We have almost reached the point where we can't go much further with palm oil plantations," he said.

The move to label -- and thus by implication penalise -- palm oil "has the potential to reverberate globally" if it is now backed by Australia's lower house, he said. "They want the world to remain frozen in time." Mr Dompok said: "People will be asking: What's wrong with this product? We want to put things right from the start. It possesses no danger to health at all."

He said most of Malaysia's palm oil was produced in areas where orang-utans had not traditionally lived. "And we take a lot of pains to see that the orang-utan populations are not displaced."

Mr Dompok added: "The government is deeply disappointed that the Liberal, National and Greens parties and Senator Xenophon have chosen to put politics ahead of the mutually advantageous relationship between Malaysia and Australia.

"This legislation undermines the spirit of our co-operation . . . My own children studied here. Ordinary Australians wouldn't want anything untoward happening to what we have built up together over the years."