PETALING JAYA: Malaysia is not doing enough for its palm oil industry, said PKR’s Wong Chen.
The Kelana Jaya MP, in commenting on the federal government considering a review of its trade with France following a move by France to limit the use of palm oil in biofuels, said the key issue is the matter of sustainability standards of the palm oil.
“We have not made our case as good as we can for palm oil. We are severely underspending on standards and the Roundtable on Sustainable Palm Oil (RSPO) is ineffective to stop these trade restrictions.
“The palm oil industry is the second biggest domestically owned contributor to the Malaysian economy after the oil and gas sector, but the budget to improve, protect and promote the industry is so ridiculously low at less than RM30 million a year.
“That is a miniscule spending rate for a RM60 billion industry. So when countries such as France put a trade ban rightly or wrongly, the government has themselves largely to blame for being penny wise and pound foolish for failing to improve sustainability standards,” he told FMT.
Wong, who is also PKR commerce and investment bureau chief, also took a potshot at the lack of response by the international trade and industries ministry (Miti), when France had already taken a stand six days ago to start restricting palm oil for biofuels.
Calling it sloppy, Wong said it was very unusual to have the Plantations Industries and Commodities Minister Mah Siew Kiong make a statement about international trade, ahead of Miti, adding that it showed a lack of ministerial coordination on the matter.
“Malaysia could restrict non-essential imports such as Birkin bags but more seriously, restrictions on French defence and weapons will be a good start.
“The key is proportionate response so Miti must be careful not to escalate the matter into a full trade war,” he said.
Wong further stated that last year, France bought 1.1 million tonnes of palm oil which is about RM3 billion in value.
Malaysia, he said, also recorded a trade surplus of RM3 billion with France for the whole of last year.
“So, in effect, if France fully bans palm oil, it will essentially wipe out our entire trade surplus wih France,” he said.
France said on Thursday that it will take steps to restrict the use of palm oil in biofuels production in a bid to reduce deforestation in Malaysia and Indonesia, the world’s top two producers of the tropical oil.
Mah said in a press statement that for trade between Malaysia and France to continue to be strong and grow, such attacks against the palm oil industry must stop.
“I also call on France and other European countries to work with us in addressing their concerns over sustainability,” he was quoted as saying.
“To say that Malaysia may review trade is like a suicide mission. The word reviewing itself is a threat. There is no point in being confrontational,” he said.
Hoo said that there were 270 French companies in the country, with total investments of RM15 billion in various sectors, and a review of trade with France could result in a major loss to the country.
Hoo stated that what could instead be done is for palm oil producing countries like Malaysia, Thailand, the Philippines and Indonesia to come together as a united Asean front, to negotiate on a stronger basis.
“These Asean countries need to deal with the European Union as a united front,” he added.
The palm oil industry has faced widespread criticism for its links to deforestation, and is often accused of annual haze outbreaks in the region due to open burning being used as a cheap way to clear land.
The European parliament said in a non-binding resolution in April that it would only allow imports of environmentally sustainable palm oil into the European Union after 2020.
France has also opposed other uses of palm oil in the past.