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Supply Chain

Malaysia Palm Oil, Rubber Farmers File EU Petition Opposing Deforestation Law

By Reuters
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Malaysia Palm Oil, Rubber Farmers File EU Petition Opposing Deforestation Law

Malaysian palm oil and rubber smallholders have filed a petition to the European Union to protest against a new law preventing imports into the bloc of commodities linked to deforestation risks.

The EU in December agreed on a deforestation law that requires companies to produce a due diligence statement showing when and where their commodities were produced and provide "verifiable" information that they were not grown on land deforested after 2020, or risk hefty fines.

"The regulation's unilateral and unrealistic demands on traceability and geolocation will prevent small farmers from accessing the European market," a group of six smallholder associations said in a joint statement.

Indonesia and Malaysia, the world's largest palm oil exporters, have accused the EU of blocking market access for their palm oil.

Deforestation Law

Malaysia's Commodities Ministry told parliament it plans to spend 10 million ringgit (€460 million) in 2023 to counter what they call an anti-palm oil campaign, and is seeking an additional 10 million ringgit.

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The smallholder groups submitted the petition to the EU delegation in Kuala Lumpur, calling on its leaders to review the deforestation regulation and "recognise the harm" it would cause farmers.

Smallholders account for 26%, or around 1.5 million hectares of oil palm planted area in Malaysia, the world's second-largest palm oil producer.

Globally, more than seven million smallholders cultivate palm oil for a living, and rely on the commodity to escape poverty.

The EU rule places the burden on smallholders and threatens their livelihoods, the groups said.

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They said they were concerned about the potential labelling of Malaysia as a high-risk country for deforestation in the regulation.

Read More: EU Agrees Law Preventing Import Of Goods Linked To Deforestation

'Sustainable Production'

"Given Malaysia and its small farmers' record on forest protection and sustainable production, and the mandatory adoption of the Malaysian Sustainable Palm Oil standards across the palm oil supply chain, such a designation would be highly demeaning to the Malaysian government and unjustified," they said.

Ambassador of the EU Delegation to Malaysia Michalis Rokas said he had met the smallholder representatives and would convey their concerns to EU headquarters.

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"Malaysia has already in place systems to ensure non-deforestation and traceability, so we do not expect any extra costs for smallholders," he said in a statement on Twitter.

He said the EU and its member states were ready to support Malaysia palm oil smallholders on their path to sustainability.

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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