Belgium, (Brussels Morning Newspaper) The EU has been urged to rethink its flagship deforestation legislation that aims to prevent goods being sold in the EU from contributing to deforestation and forest degradation.
A total of 14 nations, from sub-Saharan Africa, Southeast Asia, and Latin America, have objected to the proposal, saying it is biased against small-scale producers.
A delegation from one of the protesting countries, Malaysia, visited Brussels last week to present a petition to the European Commission expressing its concerns.
The five-person group, representing small-scale palm oil producers, met MEPs and European Commission officials and called on the EU to end its “discrimination” against them.
The various small farmer’s groups were represented by Adzmi Bin Hassan, deputy president of the National Association of Smallholders Malaysia (NASH); Joseph Anak Blandoi, general manager of the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA); Sikin Anak Sentok, deputy general manager at SALCRA; Mohamad Zulhilmi bin Azmi, assistant director for the Sustainability at the Federal Land Development Authority (FELDA) and Abd Hadi bin Mohamad, a Settler at FELDA.
The small farmer’s leaders explained in an interview with this site that they should be exempted from the Regulation, that Malaysia should be excluded from a proposed “high risk” category, and that the Malaysian government’s certification standard for palm oil should be accepted under the Regulation.
“As we understand it this is not currently the case,” said Adzmi Bin Hassan, adding, “this is just one of our concerns about the Regulation and this is the message we have been trying to convey during this visit to Brussels.”
“This Regulation is likely to reduce household incomes and also increase poverty and harm rural communities and we are here to give a voice to the small-scale Malaysian palm oil producers.”
The three-day visit follows recent protest action against the proposal in Malaysia in which over 1,000 Malaysian small farmers handed a petition to Michalis Rokas, head of the EU Delegation to Malaysia.
Adzmi and his colleagues said that over 500,000 small farmers in Malaysia depend on the export of palm oil, rubber, and other agricultural commodities to support their families. These support a wider network of some 2.5 million people in the country. These, he said, will be “much less able” to adhere to the strict new legislation than major companies such as Unilever.
There are fears that the regulatory demands in the Deforestation Regulation are such that small farmers may be excluded from supply chains by big corporations because the larger companies can afford rising compliance costs and the small farmers cannot.
“This Regulation is going to have a huge impact on small farmers in my country and other nations too and this is something that we do not think has been taken into consideration by EU lawmakers. I hope that by meeting us this week MEPs and EC officials are now fully up to speed with our concerns and will act on them.”
He cited the protest last week in Kuala Lumpur, in which Malaysian farmers demonstrated against the EU Regulation, as an example of the “strength of feeling” on the issue. The palm oil sector is “vital” for tackling rural poverty in Malaysia and in “building communities” according to Adzmi.
He said, “The fear is that the Regulation will merely benefit wealthy European agro-industries at the expense of our businesses and our villages.”
The Deforestation Regulation aims to prevent all companies involved in the trade of palm oil, cattle, soy, coffee, cocoa, timber, rubber, and their byproducts selling into the EU from contributing to deforestation and forest degradation. Companies will have to specifically prove their goods were not produced on land that was deforested after December 2020. The draft law is expected to take effect in 2024 or 2025 after an implementation period.
The Malaysian farmers think that the EU’s focus should be closer to home. About 54 percent of the land surface of Malaysia is forest (compared to 39 percent for the EU). Joseph Anak Blandoi, a small farmer representative from the Malaysian state of Sarawak on Borneo island, explained that the Malaysian government has already capped the area permitted for palm oil production.
“The fact of the matter,” he added, “is that palm oil production cannot exceed 6.5 million hectares. That is the government cap and, in fact, current production is well below this, at 5.7 million hectares.”
Joseph said the delegation has sought to “reassure” EU representatives that Malaysian palm oil is, despite some claims to the contrary, sustainable, pointing to the government’s certification standard (MSPO), and that current practice “contributes fully” to the UN’s Social and Development Goals.
“The sector is currently heavily regulated by Malaysian legislation and, again, this is something we have tried to explain.”
Malaysia, he said, has already introduced systems to prevent deforestation and to ensure traceability in a way that does not impose extra costs on smallholders. These sustainability certification standards are, he said, mandatory for all plantations.
Despite the controversy, the regulation, expected to be confirmed by MEPs in an April plenary vote, has been welcomed by environmentalists as an important step to protect forests.
They blame the palm oil industry for clearing Southeast Asian rainforests. The EU is the world’s third-largest palm oil consumer, accounting for 9.4% of palm oil exports from Malaysia, taking 1.47 million tonnes in 2022 (down 10.5% from 2021).
A European Commission source pointed out that an impact assessment it carried out estimates that the new law would protect at least 71,920 hectares of forest annually, equivalent to 100,000 football pitches, and reduce annual global carbon emissions by 31.9 million metric tons per year, roughly the same as the carbon emissions of Denmark in 2021.
The Malaysian government has consistently claimed that the country is already deforestation-free and so should not be targeted by the Regulation. Deputy Prime Minister Fadillah Yusof stated this month that Malaysia’s deforestation rate is ‘effectively zero’.
The dispute threatens to overshadow ever-growing trade relations between Malaysia and the EU. Bilateral trade between the two partners equaled €35.2 billion in 2020. EU imports from Malaysia stand at €24.7 billion in 2020 while EU exports have reached €10.5 billion last year.
The EU is the fifth largest trading partner in Malaysia, accounting for 7.4% of the country’s total trade. In 2020, Malaysia became the EU’s 20th largest trading partner in goods.
Looking to the future, Adzmi Bin Hassan said the high-profile Malaysian campaign for the EU law to be reconsidered was likely to be broadened so as to embrace other affected nations such as Brazil, Thailand, and others. Indonesia and Malaysia have already announced that a joint visit to Brussels will be conducted by senior cabinet ministers from both countries.
