05/12/2016 (The Star) - Should the Malaysian Sustain­able Palm Oil standard be mandatory accreditation for all local players? Can MSPO rival the RSPO?

Lee Yeow Chor: I believe that the MSPO could potentially be a game changer for the Malaysian palm oil industry in terms of sustainability. It has been two years since it was first introduced but being voluntary and having insufficient promotion, there has been a lukewarm response from producers.

Nevertheless, I believe a certification system administered by the Government – with a good set of domestic laws to support and govern the planting industry, and that has entered into a number of international conventions on the part of the environment, labour, standards and others – is a potentially good scheme.

I do think it should be mandatory, but having said that, there are now several certification schemes breaking into the country, and of course the most prominent one is the RSPO. Many of us are on RSPO certification, especially the larger companies, and having to go through many certification schemes at the same time can be quite onerous for the planters. Planters are already having a tough time managing their plantations.

So while I advocate that the MSPO be made mandatory, it has to take into account the requirements of all the different certification systems and streamline its procedures for certification for those who have already obtained similar certifications under other schemes.

Zakaria: At FGV, we are ready for MSPO certification to be made mandatory. We previously withdrew our RSPO certification because we were having issues on the part of the settlers. We had to provide them with training.

However, in terms of accreditation for our factories, we have no problem with that. So if it is made mandatory, we are prepared for it.

Malaysia and Indonesia, we are the biggest producers of palm oil. I think we should go for MSPO. Why should we be dictated by the non-producers of palm oil?

Yusof: MSPO can be a strategic process to allow for mandatory certification for sustainable palm oil in Malaysia.

The proper protocol is still being designed to ensure its implementation meets international standards while allowing for affordability to all segments including the smallholders.

Wong: For Sarawak Oil Palms Bhd, we are already 50% certified and by next year we will be 100% certified under the MSPO. I believe that MSPO is a national standard and it would be good if we could present ourselves as a nation that has a stringent set of sustainability standards.

At the same time, I do not view MSPO as competing with RSPO. They can co-exist and complement one another. It is not that one is better than the other. Both standards should serve their purpose, while the RSPO remains voluntary. I believe that MSPO should work and gain acceptance by all parties – consumers, buyers, trade partners and NGOs. The RSPO, of course, gives us access to certain markets like Europe.

So as I said, the two standards could co-exist, but for different reasons.

Lee Oi Hian: This is where I disagree. You cannot have palm oil producing countries auditing themselves and saying that this is acceptable to the consumer. The consumers want an independent body where they have a say because they are paying for our products.

I am not downplaying the MSPO but our first priority is undoubtedly the RSPO – we have to be clear on that. I think Malaysia and Indonesia should both support the RSPO because you cannot have a fragmented industry where everyone holds to a separate set of standards. Having said that, I think it is the right of every nation to have its own sustainability scheme to regulate or help certain segments of the industry which are not as progressive, such as smallholders.

For us bigger plantations, we want RSPO certification. We would also like to see the MSPO being successful. However, if a company is already RSPO-certified, you should allow exemptions on certain areas that are not covered by the RSPO – you can audit us on that. In that way, the MSPO can focus on bringing the rest of the industry together to the same standards as the bigger plantations.

FGV has its own sustainability team and so do other companies like United Plantations and IOI Corp. If I own one plantation of 50 acres or even 5,000 acres, how can I afford to hire a sustainability team? This is where the MSPO should come in.

The RSPO gives us access to other markets. At the moment it is Europe, and in the future it will be the rest of the world. Trends are changing and it is hard for us to fight this. We have to see how we can adapt to the changing trends and make ourselves sustainable.

Today, the plantations companies are getting some premium from the sale of sustainable oil but how do we share some of this with the smallholders? This should be a major priority for the MSPO scheme, that if the smallholders get through the requirements, then some of this premium can be passed on to the smallholders.

The role of the MSPO should be to create value particularly for the smaller plantations and smallholders.

Bek-Nielsen: Is the MSPO better than the RSPO? In my view, they do not have to compete. In fact, they should complement each other in helping to improve the image of palm oil.

But whether we like it or not, this is ultimately about credibility and for certain markets you need to have the endorsement of NGOs in order to do business. If the MSPO cannot do that, and cannot ensure that deforestation stops, it will simply have no credibility for certain markets. This is a strength which the RSPO offers to its buyers, and governments in the EU are really starting to recognise the RSPO certification system.

What we have been recommending to the industry for the last two years is that the MSPO has a huge role to play, particularly within the smallholder segment. Today, 40% of Malaysia’s palm oil is produced by smallholders. In Indonesia it is just over 50% and in Thailand, 80%.

That is where the RSPO has fallen short. It is only looking at the ceiling and it has lost sight of the floor. The MSPO can learn from this and consider leaning itself against the United Nations Fair Trade mechanism to help create a platform that will help smallholders improve on their agricultural standards, yields and ultimately their well-being. That is what we want and this would give more credibility to the MSPO and do more justice to those who are most in need of help.

However, if we think that the MSPO is going to be better than or equal to the RSPO, then we are simply not being realistic.

So yes, I am in support of the MSPO being made mandatory, but not for companies that already have RSPO certification. We should not try to over-regulate or make processes more bureaucratic for the industry. We are busy enough as it is with managers and engineers suffering from paper overload in what is supposed to be a paperless society.