The next US administration must rethink a palm oil ban that could worsen plight of smallholder farmers
News Talk (04/11/2020) - The recent block on palm oil imports from Malaysian producer FGV holdings by US Customs and Border Protection (CBP) has not only been ineffective, but is more likely to worsen the plight of the smallholder farmers who have been badly hit by the measures.
That block was put in place in response to investigations of labor rights violations by the CBP, Associated Press, NGOs and other agencies.
The biggest problem is that this is an approach that is unlikely to lend support to the important progress that is being made in Malaysia on labor rights, and sets a precedent that sees boycotts as the principle solution – when boycotts could have devastating environmental consequences.
That’s why the National Association of Smallholders Malaysia (NASH) slammed the US government decision as a reckless act” that will have a “negative impact” on over 100,000 smallholder farmers working on FGV plantations. By hitting the incomes of smallholder farmers, the impact of the block is more likely to squeeze Malaysia further during the
hard times of the pandemic. The palm oil industry has already suffered greatly. The irony is that putting further pressure on existing producers is more likely to incentivize them to cut labour costs.
Part of the problem is that many of the allegations made by the CPB trace back to problems that had been identified as long ago as five years ago. While there can be no doubt that some violations are going on, the CPB’s assessment fails to account for the fact that since the initial allegations of labor rights violations came to light in 2015, Malaysia has made real progress on improving standards across the industry under its new sustainability certification standard, Malaysia
Sustainable Palm Oil (MSPO).
This has even received international recognition. The Government of the Netherlands, for instance, notes that MSPO’s standards “can help to minimize the negative impact of palm oil cultivation on the environment and communities in palm oil-producing regions”, through a set of stringent “environmental and social criteria which companies must comply with.” These include “fair treatment of workers according to local and international labour rights standards.” The Malaysian government has made rapid progress since 2015 in scaling up MSPO across the palm oil industry. As of September, some 89% of plantations were certified under MSPO. Due to MSPO’s success in dramatically reducing the rate of deforestation, even Mighty Earth, one of the world’s top anti-deforestation NGOs, has lauded the MSPO
scheme as a “blueprint” for ending deforestation in Southeast Asia.
MSPO works not under threats of boycotts, but because the Malaysian government has made the scheme mandatory and legally enforceable. The scheme operates fluidly, with NGOs and other actors monitoring the satellite data published by the Malaysian government, notifying producers of violations, who then respond rapidly. This has resulted in a steady reduction of the rate of deforestation every year, for the last three years.
The upshot is that engagement, even if it is as a critical friend, works better than boycotts – which tend not to generate the desired results. In fact, scientists warn that blocking palm oil imports is only likely to worsen our environmental challenges. Because palm oil uses less land than other oilseeds, the more palm oil is pushed out of markets, the greater quantities of land for these other oilseeds is required – driving greater rates of deforestation, and in turn, worsening climate change. This would also, by extension, potentially drive greater degrees of labor rights violations.
For the next administration, a rethink of the current approach could result in a more effective strategy. Instead of simply implementing a block, the US government should strategically engage Malaysian producers to provide them with support and incentives for compliance with labor standards. And instead of a long slow process of allegations accumulating over years, resulting in belated but ineffective action that tends to disempower vulnerable farmers, the US
government should create a far more rapid procedure that can work in partnership with Malaysian authorities – who have already made clear that they take such allegations seriously and are working on taking all necessary action to put an end to continued labor rights violations.
By seeing the Malaysian authorities as a willing partner, the US can work more closely with them to put an end to labor exploitation in the industry once and for all – a goal shared by both the Malaysian and US governments.