New threats to palm oil

This is written by columnist Dr Ahmad Ibrahim.

HIDDEN AGENDA: Under the guise of saving the environment, some nations' laws impede the import of palm oil

KUALA LUMPUR: Remember the much publicised London raid on the palm oil giant Guthrie in 1981? According to records, it took only about four hours for the transfer of ownership to take place. Malaysia eventually succeeded in taking over the 100-year-old company built during the colonial era.

From then on, Guthrie grew to become a respected global player in the palm oil business, managed fully by Malaysians. It is now merged into the Sime Darby conglomerate. And Malaysia has single-handedly turned palm oil into a leading oils and fats commodity for the world.


Malaysia and Indonesia now together control about 90 per cent of the world's palm oil production. And palm oil dominates the international trade in edible oils, exporting to literally all corners of the world.

Looking back, this might have been difficult if that historic London dawn raid had not taken place. Even to this day, competing oils have tried all sorts of tactics to suppress the global expansion of the palm oil industry.

However, despite the growing popularity of palm oil among consumers and manufacturers worldwide, competitors have not stopped thinking of new ways to deny palm oil its rightful place in global trade.

Palm oil is, for example, the preferred oil in frying because of its unique heat stability. In China, Korea and Japan, instant noodle makers use 100 per cent palm oil. In the USA and European Union (EU), palm oil has emerged as the preferred fat for the manufacture of margarine and shortening.

But this is more to do with the health benefits of a trans fat free product offered by palm oil.

In fact, consumers should thank palm oil for the findings on the deleterious nature of trans fats.
This came about when scientists were looking for the scientific explanation as to why palm oil, despite its higher content of saturated fats, did not raise cholesterol when consumed.

That was when they found the real culprit, trans fats from partially hydrogenated liquid oils. The rest is history. Now all nutritional labels, especially in the West, carry warnings on trans fats content, which is good news for palm oil. 

But the enemies of palm oil are not giving up easily. Their latest attempt is disguised under the widely popular sustainability agenda.

Nowadays, it is easy to sell any idea which promises to help develop solutions for the global sustainability challenge. All you have to do is to come out with convincing arguments that a crop like oil palm is bad for climate change and has to be policed using the many sustainability criteria.

Actually, the palm oil industry in Malaysia has no real problem with that. The problem starts when the criteria imposed become unrealistic and irrelevant. 

In fact, before all the hue and cry over sustainable palm oil, Malaysia had long embraced the commitment to adopt environmentally sustainable management practices for oil palm.

The industry has long implemented biological control of pests, zero burning techniques in oil palm replanting, effective treatment of palm oil mill effluents, recycling of treated water for irrigation, conversion of biogas into energy and many more.

And sustainability is not just about the environment. We must not forget the other two pillars of profit and people.

Admittedly, oil palm is one crop which reaps considerable income. It has also helped alleviate the country's hardcore poverty through land schemes like Felda and Felcra.

However, recent developments in Europe suggest that we may soon again lose control over its destiny. Already we are seeing laws in the EU enacted to deny the export of our palm oil for biofuel to the EU.

All are under the guise of the environment and sustainable development. The Renewable Energy Directives (RED), for example, have classified palm oil as not meeting the criteria for sustainability.

But the criteria for assessment keep changing. New elements such as land use change are introduced to make it difficult for palm oil.

Though we do recognise the noble intentions of sustainability to guide future global growth, it can also be abused. Is colonisation coming back to haunt palm oil-producing nations under the guise of the environment?