01/12/2012 (The Star) - Of late, there has been a flurry of sans huile de palme (palm oil-free) campaigns in France to ban the use of palm oil in the country's food sector.

Retailers have logos on their food packaging stating that the product is palm oil-free, while French retail giant Casino declares on its website that 350 of its wares do not contain palm oil.

In tandem with such campaigns, false claims on palm oil's alleged adverse impact on health and the environment are circulated in the French media.

On Nov 14, the French Senate went so far as to approve an amendment that would see a 400% increase in tax on palm oil coming into France. The present French tax on palm oil imports is about 100 per tonne.

The so-called “Nutella tax” amendment initiated by Senator Yves Daudigny was supposedly to encourage the French to consume a more healthful diet, but some quarters believe that the real target is palm oil, a key ingredient in Nutella.

Nutella is a chocolate and hazelnut spread made by Italian company Ferrero, and is extremely popular in France which accounts for 26% (about 100 million jars) of the product's world consumption, according to French newspaper Le Monde.

Daudigny demonised palm oil as unhealthy despite nutritional experts finding palm oil to be vitamin-rich and free of dangerous trans fats and genetically-modified organisms.

Such rampant negativity spewed by the French threatens to derail palm oil exports to the European Union. While the Nutella tax was subsequently rejected by France's National Assembly, palm oil producers are concerned that what the French are doing may cause a domino effect in the rest of the EU.

What can major palm oil producers such as Malaysia do to ensure continued market access to the EU, in this scenario of increased regulation, misleading advertising and campaigns, and unfair labelling practices? Claims and complaints

According to Paolo R. Vergano, a partner with Brussels-based legal firm FratiniVergano, the labelling of palm oil as an ingredient in food is currently “not mandatory” in EU food labelling law.

He says that in principle all ingredients of a foodstuff have to be indicated, but there are exceptions vegetable oils, for one.

“So if a product contains palm oil, sunflower oil, or both, the indication in the list of ingredients that it contains vegetable oil is currently sufficient,” says Vergano who was a speaker at the recent International Palm Oil Trade Fair and Seminar in Kuala Lumpur organised by the Malaysian Palm Oil Council (MPOC).

However, he cautions that the escalating palm oil smear campaigns and the EU Food Labelling Regulation requiring all types of vegetable oil used in food to be specified on food labels (effective Dec 13, 2014) may influence EU manufacturers to exclude palm oil from their products.

Vergano, who specialises in EU/World Trade Organisation (WTO) trade law, trade negotiation, WTO dispute settlement and market access issues, says the palm oil industry can take urgent counter-measures such as going on a public relations/advertisement, administrative/judicial, and trade/diplomatic offensive.

Time is of the essence for palm oil producers like Malaysia, he says, and choosing the right alliances is critical. “Malaysia has plenty of allies, so identify them, reach out, mobilise them, and wage war. Malaysia should protect its interests by using EU and/or WTO judicial actions so that palm oil becomes a trade issue,” he says.

Vergano further advises that Malaysia can explore legal remedy for complaints of a legal, administrative or judicial nature.

In France, the General Directorate for Competition, Consumers and Fight against Fraud under the Ministry of Economy, Finance and Trade handles all complaints pertaining to the labelling of foodstuffs in the market.

In August this year, the MPOC filed an administrative complaint with the Directorate, seeking its investigation into the case of five producers/retailers whose products bear palm oil-free logos and certain claims.

Other French agencies which Malaysia can file complaints with include the Tribunal de Commerce and the Tribunals de Grande Instance for a criminal or civil action. Grounds for complaints include false and misleading claims, false advertising, misleading green/environmental claims, the lack of scientific facts in nutrition claims, and illegal comparative nutrition claims. Make a stand

Should Malaysia take its case to the WTO, Vergano says, “it must be shown that the French Government has acted and taken discriminatory measures.”

Malaysia needs to take a stand at the WTO that this is a trade issue and not just a mere labelling dispute between two parties, he says.

At the same time, Malaysia should pursue more policy work within the EU and WTO.

“The key to any trade escalation to protect the legitimate interests of the palm oil industry is constant monitoring in Brussels (EU) and Geneva (WTO), pro-active engagement with the EU members, and systematic use of all trade instruments in all relevant trade fora,” he says.

“This will include the EU-Malaysia Free Trade Agreement (FTA) negotiations, EU-Indonesia FTA, EU-Asean FTA, WTO committee meetings, WTO multilateral negotiations, and building alliances.”

Vergano also points out that the regulatory and commercial threats to palm oil are not just limited to food application and nutritional properties; there are also moves to regulate palm oil in biofuel applications.

“Blanket regulations and legislation are being drafted and adopted, based on environmental objectives,” warns Vergano, adding that the palm oil players need to come up with a comprehensive strategy to preserve their market access to the European Union.