Deforestation regulation: CPOPC urges EU not to exclude oil palm smallholders from supply chain
12/04/2023 (The Edge Markets), Kuala Lumpur - The Council of Palm oil Producing Countries (CPOPC) has published a briefing paper with recommendations and solutions to ensure the inclusion of oil palm smallholders in the supply chain for the European Union (EU) market under the EU Deforestation Regulation (EUDR).
This briefing paper was in response to the EU which reached an agreement on the EUDR to minimise the risk of forest degradation associated with products, including palm oil, that are imported into or exported from the EU, the CPOPC said in a statement on Wednesday (April 12).
The paper has been circulated to policymakers of the EU as part of CPOPC efforts to enhance the welfare of oil palm smallholders.
“Although the new regulation is a major milestone showing the commitment of the European Union to contribute to reducing global deforestation, it has created a potential risk of exclusion of smallholders from the supply chain,” the council said.
Smallholders, an important stakeholder of the palm oil supply chain, will most likely be excluded from the EU market when the EUDR is implemented.
The CPOPC said the palm oil producing countries respect the rationale of reducing deforestation and forest degradation of the EU.
“Thus, we urge the EU to also acknowledge the efforts and actions taken by palm oil producing countries for conservation of forest and biodiversity as well as to enhance the sustainable development of the palm oil industry,” it said.
The CPOPC briefing paper, prepared in partnership with Solidaridad and MVO -- the Netherlands Oils and Fats Industry, recommends that the EU assess the challenges and potential impact of the regulation on oil palm smallholders as soon as possible, so that practical measures can be developed to facilitate the participation of smallholders by starting large scale engagement.
“Recognise the efforts taken to ensure the sustainable development of palm oil in producing countries including the mandatory sustainability standards such as the Malaysian Sustainable Palm Oil (MSPO) and the Indonesian Sustainable Palm Oil (ISPO) as important avenues to drive compliance with national laws and regulations,” the paper stated.
It should be noted that the 2020 revision of MSPO standards ensures that certified sustainable palm oil has not been produced from deforested land after December 2019.
Other recommendations also include forging strong and structured partnerships between the EU and the palm oil producing countries to create an enabling environment, including potential dialogue on innovative financial instruments to prevent further development of oil palm in forest areas, and legality and compliance with the EU Regulation.
Oil palm smallholders account for about 41% and 27% of total oil palm planted areas in Indonesia and Malaysia, respectively.
Smallholders account for about 35% to 40% of global production of palm oil.
“The Article 28 of the EUDR provides for the partnerships and cooperation mechanisms to facilitate compliance to the requirements of the EUDR.
“In this regard, the CPOPC is ready for a dialogue with the EU on actions and measures to safeguard the interest of oil palm smallholders in supplying to the EU market. The producing countries emphasise that the EUDR should play a role to ensure smallholders inclusivity instead of putting them in severe risks,” the council said in its statement.
Founded by Indonesia and Malaysia -- two of the world's largest palm oil producers -- CPOPC is an intergovernmental organisation that promotes the global use of the commodity.
Solidaridad is an international civil society organisation with over 50 years of experience in developing solutions for repressed communities while fostering more sustainable supply chains.
MVO represents 95% of companies in the Netherlands that are active in the production, processing and trade of vegetable and animal oils and fats. It represents the interests of the industry in contacts with the government, politics, social organisations, science and media.