The Malaysian Sustainable Palm Oil (MSPO) certification is redefining the responsible supply chain

The Malaysian Sustainable Palm Oil (MSPO) certification is redefining the responsible supply chain from producer to consumer, writes Robert Hii.
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By Robert Hii

Robert Hii is the editor of the Certified Sustainable Palm Oil (CSPO) Watch and a commentator on sustainability and nature conservation for publications such as National Geographic, Global Policy and Huffington Post

29 Apr 2021

A new UN report entitled, "Making Peace With Nature”, finds that nearly 90 percent of all known species are threatened by climate change. Another UN report warns the world is “nowhere close” to fighting climate change. Unsurprisingly, panicked governments are adopting short-sighted solutions, and in the process are missing important templates for slowing, and even reversing, climate change.

Malaysia offers such a template; as a leading palm oil producer, the country’s progress towards sustainability deserves to be both widely studied and rewarded with robust trade agreements. The key to its success in slowing deforestation has been - if not solely, at least in part - due to its nationally mandated certification scheme, Malaysian Sustainable Palm Oil (MSPO)

“What makes the MSPO a model for global sustainability is its capacity to contribute to a nationwide conservation landscape to protect its natural landscape and endemic wildlife species. ”

Unlike the Roundtable on Sustainable Palm Oil (RSPO), which is supported by companies and founded on voluntary adherence, the Malaysian government enforces this nationally mandated, government-backed sustainability metric with penalties and sanctions. Further, the MSPO provides a greater focus on smallholder farmers and on preventing deforestation.

Given its corporate focus, the RSPO scheme is difficult for smallholder farmers to navigate, despite the fact that they make up, worldwide, about half of all palm oil landholdings. The RSPO is also very expensive, making it even more burdensome. This is something the MSPO has been able to overcome by being more accessible; the fact that almost all organised smallholders in Malaysia are MSPO certified speaks for itself. 

In fact, in the year since it became mandatory, 87 percent of Malaysian producers were certified under the MSPO. That includes nearly all organised smallholders and plantation companies and 39 percent of independent smallholders. 

Recently, the World Resources Institute found that, over the last four years, Malaysia’s rate of deforestation has decreased annually. This could possibly be a result of Malaysia’s forest management and conservatorship, which includes tougher law enforcement and mandatory moratoriums.

Another aspect in which the MSPO differs from other certification schemes is in its commitment to wildlife protection, leading in the conservation of endangered species (Malaysia has one of the most biodiverse ecosystems in the world). In its capacity of creating a nationwide conservation landscape, MSPO offers the chance to protect particularly vulnerable species. That includes the pygmy elephant and Bornean orangutan, two beloved animals. 

In fact, the palm oil sector has been funding several conservation projects throughout Malaysia, ensuring that humans and wildlife coexistence. For example, under the MSPO - and contrary to widespread misperception of the palm oil industry - fragmented forests have been reconnected, to the benefit of endangered orangutans. A recent study by ‘Frontiers in Forests and Global Change’ underscored the importance to Malaysia’s orangutan population of such efforts

“The MSPO holds the potential to truly transform supply chains, not only for the palm oil sector but for all forest-risk commodities”

What makes the MSPO a model for global sustainability is its capacity to contribute to a nationwide conservation landscape to protect its natural landscape and endemic wildlife species. The Malaysian palm oil industry, with the backing of the Ministry of Primary Industries and the Ministry of the Environment and Water, has effectively created a model of sustainable development.

Extraordinary programmes to protect endangered wildlife and habitats have the support of multinationals such as Unilever and Nestle, both of which have committed to sustainable palm oil production in Malaysia. In addition, project-specific funding from the Malaysian Palm Oil Green Conservation Fund and foreign NGOs, including Panthera from the US and Orangutan Appeal UK, have been instrumental in preserving wildlife species in Malaysia.

These outcomes have been made possible because the MSPO wisely connects all stakeholders, from farmers to plantations and even wildlife. That spirit of inclusivity should be adopted by the EU, which - instead of simply issuing decrees for the Global South - should consider working consultatively. After all, Malaysia’s road to sustainability has not been an even or easy one. 

Instead, Malaysia continues to face obstacles in enforcement and could greatly benefit from collaboration with global experts in relevant fields. That is help the EU is uniquely positioned to offer. Sustainability, after all, is not only an environmental issue but an economic one; competition for land and agricultural expansion is often motivated by a hope among smallholder farmers of lifting themselves out of poverty.

This is precisely what Malaysia has witnessed since the rapid expansion of palm oil production in the 1960s, due to increased demand for palm oil by Western consumers. The fates and fortunes of these smallholder farmers were front and centre during the formulation, and now the enforcement of, the MSPO; namely, a concern for the human rights of local workers and of indigenous communities. 

Today, the MSPO contains robust regulations on sustainability, conservation, human rights, and labour and women’s rights. While there is always room for improvement, the government of Malaysia has been highly responsive to breaches of MSPO regulations.

During my visit to palm oil plantations in Sarawak, Malaysia, a few years ago, I was impressed by the measures taken to ensure fair living standards for migrant workers and their families. While no certification scheme is perfect, the willingness to make the MSPO as close to ideal as possible exists on the ground. 

However, to develop and advance sustainability certifications for forest risk commodities such as palm oil, a focus on smallholder farmers is important, as is a consideration of the effects of European consumer demand. This process cannot be one-sided. Questions about how to achieve long-lasting palm oil sustainability cannot be adequately answered without a dialogue with producer countries as well as incentivisation by the EU. 

Regrettably, although there has been some increase in the EU’s awareness of sustainable palm oil and MSPO, there still is not enough understanding of the metric or of its successes. In fact, Global Policy magazine found that progress in MSPO certification is “double the EU’s outdated estimate,” resulting in a certification process that is “far more substantive” than EU policymakers currently recognise. Remedying this shortcoming is a critical priority; after all, as a University of Bath study published in Nature Sustainability found, banning palm oil, as the EU has done, would actually increase deforestation.

Reducing palm oil production would not see consumer demand evaporate, but rather migrate to alternative oils, such as soy, sunflower and rapeseed, which are far less efficient. Palm oil is less costly, both monetarily and environmentally. 

The MSPO holds the potential to truly transform supply chains, not only for the palm oil sector but for all forest-risk commodities. That said, the ability to tap into its full potential to eradicate deforestation, in Malaysia and globally, lies in the willingness of trade partners such as the EU to invest in, and strengthen, the certification. The zero-deforestation commitments make the EU and Malaysia natural partners - as long as both parties are willing to listen to and learn from each other.

This article was published as part of the Sustainability First supplement by the Center for Sustainable Palm Oil Studies (CSPO). The full supplement is available on:

Read the most recent articles written by Robert Hii - EU Regulation on Deforestation: The Case for National Certification Programs

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