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Last Updated: 08 July 2022

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PRESS STATEMENT
MALAYSIA CAN ILL-AFFORD TO BE A “SITTING DUCK” OF THE WESTERN ANTIPALM OIL CAMPAIGN

1. AS the world’s two top palm oil producers, Malaysia and Indonesia, have for the past two decades or so been subject to numerous anti-palm oil campaigns by western countries and the developed world, which eventually affected the marketability of palm oil and its related products in these markets.

2. The smearing campaign, which created negative perceptions towards palm oil –if not systematically and strategically put to rest–, can affect the competitiveness of Malaysian palm oil exports in the long haul.

3. As palm oil and its related products have been a major revenue contributor to the country’s economy as well as having played a significant role in reducing rural poverty (by providing employment) and improving infrastructure, Malaysia has resorted to counter such malicious/baseless claims via a ‘soft consultancy ’approach.

4. Historically, the negative image of palm oil started taking shape in Europe beginning in 2003, revolving around issues pertaining to sustainability before moving to the nutritional aspects of palm oil.

5. The current practice of ‘no palm oil ’or ‘palm oil-free labelling in France and Belgium can be traced back to 2008, when the French retail chain Carrefour started to substitute palm oil in potato chips with sunflower oil.

6. Singling out palm oil with the ‘palm oil-free marketing and labelling campaigns convinced consumers that palm oil is terrible whether for nutritional or environmental reasons or both.

7. Recall that in 2019, the European Union (EU) has classified palm oil as a crop with a high-risk rate towards indirect land-use change, hence deemed to contribute to deforestation and loss of biodiversity. EU member countries are currently adoptingthe European Union Renewable Energy Directive II in their respective legislation.

8. Such a classification exercise will affect palm oil being a potential biofuel source since its usage will be gradually reduced beginning in 2023 before being ‘eliminated totally ’ as an EU biofuel source in 2030.

9. This has led to Malaysia initiating legal action against the EU and two of its members – France and Lithuania – on 15 January 2021 under the World Trade Organization’s (WTO) Dispute Settlement Mechanism. Such development came about after the EU implemented the directive without considering Malaysia’s commitment and views, even after the latter had given its feedback and sent economic and technical missions to Europe.

10.Malaysia will also act as a third party in a separate WTO case lodged by Indonesia, which is the world’s biggest palm oil producer, as a sign of solidarity and support.

11.In all fairness, Malaysia is left with no choice but to retaliate against “the bullies” even as it understands that the ensuing legal process can be dragging and costly, given it entails massive preparation and submission of documents for argument as well as meticulous research and ‘countless hours of meeting and deliberation by the panel tasked to look into the matter.

12.Thus far, no other restrictions have been imposed by the EU against palm oil. However, the fact remains that medium- to long-term damage has already been inflicted on palm oil’s image in the eyes of European consumers.

13.In this regard, the Ministry of Plantation Industry and Commodities (MPIC) will continue to closely monitor any latest developments from a legislation standpoint by the EU, which can potentially tarnish the reputation of palm oil, hence adversely affecting the viability of the palm oil and palm oil-related industry in Malaysia. I call upon all Malaysians to join MPIC and rise up to defend our palm oil in the eyes of the world.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
22 JUNE 2022

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Last Updated: 08 July 2022

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MEDIA STATEMENT
AUTOMATION IN THE PLANTATION SECTOR AS A LONG -TERM
SOLUTION TO REDUCE DEPENDENCE ON FOREIGN WORKERS

1. The Ministry of Plantation Industries and Commodities (MPIC) will continue seeking solutions to overcome the manpower shortage in the plantation sector, especially oil palm. MPIC is aware of the woes faced by the Malaysian Estate Owners ’Association (MEOA) where a severe labour crunch of about 120,000 workers is said to be capable of causing losses in earnings by up to 5%-10%.

2. All parties should be aware that among the main reasons for the shortage of manpower in the plantation sector was due to the closure of international borders, to curb the spread of COVID-19 in the country and protect the people from the infectious disease.

3. The ministry is currently working closely with the Human Resources Ministry, Wisma Putra, the Immigration Department and the Co-operative Commission Malaysia, among others, to look into ways to expeditiously resolve this issue.

4. The Government had in September 2021 approved plans to bring in 32,000 migrant workers for palm oil estates nationwide, and MPIC remains cautiously optimistic of achieving this target, if not more, although the issue of permits had been brought to our attention.

5. Plantation owners must also in the future, be open to workers from countries like India and Pakistan, and not be too dependent on workers from Indonesia and Bangladesh. Moving forward, MPIC hopes that plantation owners will look into long-term solutions to cut down their dependency on foreign workers.

6. Through technological studies and research conducted by the Malaysian Palm Oil Board (MPOB), plantation owners are advised to increase the use of automation such as drones for the purpose of surveillance and pest control. MPIC is confident that the use of automation at plantations will attract local workers to this sector.

7. The use of greater automation will help reduce our dependency on foreign workers and make the industry more resilient in the long-run.

8. In this respect, MPIC feels that the current labour crunch in the palm oil sector will spur planters to start investing in technological tools and boost their own bottom lines in the long-run. MPIC believes that a greater uptake in automation can help position palm oil as the preferred edibl oil globally, in line with the ongoing "Malaysian Palm Oil Full of Goodness" Campaign.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
18 JUN 2022

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Last Updated: 22 June 2022

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MEDIA STATEMENT
MINISTRY OFFERS TWO INCENTIVES TO THE PALM OIL SECTOR
TO ENSURE THE SUSTAINABILITY OF SMALLHOLDERS'
INCOME SOURCES
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1. The Ministry of Plantation Industries and Commodities (MPIC) is calling on eligible oil palm smallholders nationwide to apply for incentives under the Ministry to help supplement their incomes and grow their businesses.

2. The Ministry recently opened up applications for two incentives. They are the Oil Palm Integrated Farming Scheme (ITa) and the Agro Bank - MPOB Easy Financing Scheme. Under ITa, oil palm planters who plant pineapples are eligible for incentives of RM7,000 per ha, while those who grow bananas, watermelon, corn, and papayas receive RM3,000 per hectare.

3. This incentive aims to encourage farm owners to diversify their sources of income through cash crops and optimise the use of their land. This is in line with the government's policy on expanding oil palm cultivation areas, with a planting limit of not more than 6.5 million hectares. This intermittent planting can also improve the health of the ecosystem and soil fertility, thus increasing the yield of oil palm production. MPIC is confident that this incentive can also boost the production of food resources and stabilize food security in the country.

4. Those interested can get the application forms from any TUNAS MPOB offices nationwide. Application is opened only to those who own 6.5 hectare of oil palm plantations or less.

5. Under the Agro Bank - MPOB Easy Financing Schemes, smallholders can apply for loans to purchase oil palm seeds, fertilisers, pesticides, and insecticides for their plantation. They can apply for loans worth RM2,500 per hectare up to RM16,250, with a repayment period of 24 months at a two percent interest rate. The loan is to give smallholders a leg-up in their business.

6. These incentives and facilities are part of the Ministry’s continuous efforts to uplift the living standards of smallholders as well as to balance the dynamics of flora and fauna to ensure environmental sustainability. The Ministry is committed to continuing to defend the plight of smallholders with operational modernisation offers to ensure the long-term sustainability of income sources.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
10 JUNE 2022

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Last Updated: 22 June 2022

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PRESS STATEMENT
BE EXTRA SENSITIVE OF US CBP’S FORCED LABOUR RULE TO
CIRCUMVENT WRO PITFALL
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1. LAST Thursday (June 2), the US Customs and Border Protection (CBP) clarified to the Malaysian media how it derived evidence of forced labour allegations and how it pursued its investigations that led to products from six Malaysian firms still being prevented from entering the US market after being slapped with Withhold Release Orders (WROs).

2. As much as we cannot totally agree with its reliance on remote or third-party evidence in its investigation process, we have to accept that at the end of the day, the enforcement agency is vested with the prerogative to act based on what it deems as proprietary information.

3. The Ministry of Plantation Industries and Commodities (MPIC) has no intention of disputing CBP's prerogative, but feel the claims are unfair and also biased.

4. The ban on Malaysian palm oil and palm oil products (or rubber gloves for the matter) is based only on allegations of forced labour claims made by NGOs and other groups.

5. Nevertheless, CBP in detailing the route and subsequent actions taken against some companies, has reiterated that its investigations were done through reasonable information, analysis, investigations and assumptions.

6. In this regard, Malaysian palm oil and palm oil-related products may have to bear the brunt of being in direct competition with soybean oil of which the US is the world’s leading producer and the second-leading exporter.

7. Now that the modus operandi of the CBP and how their verdict is passed has been made clear, the onus is on industry players – especially those in the labour-intensive rubber gloves and plantation sectors – to pay heed to CBP’s sensitivities and work around a remedial action plan to avoid being slapped again by a WRO for accusations of forced labour.

8. In this regard, MPIC wishes to commend the Malaysian Rubber Gloves Manufacturers Association (MARGMA) for its recent engagement with CBP to further develop a clear respect and understanding of the roles played by both parties in the governance of labour issues.

9. It is learnt that MARGMA has been spearheading such efforts since 2018 when it advocated a zero-debt policy and also initiated remedial actions to be undertaken by each member to dislodge itself from the stigma of forced labour by leveraging the International Labour Organization’s (ILO) 11 indicators as the guiding principle.

10.Above all else, MARGMA has also formed an ESG Unit (environmental, social, and governance unit) and task force to actively educate and sensitise members and its employees on the 11 ILO indicators of forced labour. This vigorous exercise is done via partnership with the ILO), and the US, UK and European Union (EU) embassies/high commissions in Malaysia.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
8 JUNE 2022