KUALA LUMPUR, Dec 21 — Advokasi Perusahaan dan Industri (API), an advocacy group dedicated to promoting business and industry growth, called for stakeholders to drive fair and equitable discussions about palm oil in Malaysia.

It stressed that businesses, NGOs and the public need to be engaged in the industry’s efforts at championing sustainability.

Datuk Fazli Nordin, managing director of API, said, "The rapid progress in sustainable practices within the palm oil sector holds greater importance than just for the local industry.

"While the industry significantly contributes to the broader global economic landscape, it is often unfairly targeted with negative perceptions that overshadow the substantial progress we have made in sustainable practices.

"We are at a pivotal moment where we can redefine our palm oil industry not just as an economic powerhouse but as a leader in sustainability. These efforts are critical for the industry’s future, ensuring it remains a sustainable and vital contributor to our nation’s prosperity.”

Malaysia, one of the world’s largest palm oil producers, recorded a peak in palm oil export revenue, totalling RM135 billion in 2022, with an estimated contribution of 2.4 per cent to the GDP.

Malaysia’s export revenue is expected to increase by 3.7 per cent to 16.30 million tonnes this year, up from 15.72 million tonnes in 2022.

Smallholders contribute significantly to the industry, accounting for between 30-40 per cent of palm oil cultivation in the country.

As of December 2021, nearly 250,000 licenses had been issued to smallholders in Malaysia.

Johor has the largest number of these smallholders, followed by Sarawak and Sabah.

These smallholders are considered the most important stakeholders in the cultivation of palm oil and other tree crops in Malaysia. In general, the agriculture sector provided employment to 1.86 million people in 2022.

To monitor the development of the palm oil sector, compulsory compliance with the Malaysian Sustainable Palm Oil (MSPO) certification scheme, and voluntary membership of the Roundtable on Sustainable Palm Oil (RSPO), effective 2019, aims to minimise the industry’s environmental impact and promote responsible practices.

The Malaysia Sustainable Palm Oil (MSPO) Board was formed in 2015 to certify sustainable grown palm oil and, in 2017, the government of Malaysia mandated MSPO certification starting in 2020.

Positive government action has continued in more recent years, with a plantation area cap established in 2019 through 2023, and new forestry laws enacted in 2022 to stiffen penalties for illegal logging.

The initiatives employed by the Malaysian government and palm oil corporations appear to be bearing fruit with some 83 per cent of palm oil refining capacity now operating under a "No Deforestation, Peat and Exploitation (NDPE)” commitment.

The rate of deforestation in Malaysia has been trending lower for some time, with Global Forest Watch recently reporting a sharp reduction in forest loss, showing that reversing the deforestation trend is achievable.

Ultimately, this forward-thinking approach aligns with global environmental goals and the increasing consumer demand for sustainable products.

API is encouraging a more collaborative approach involving all stakeholders, which it hopes will lead to even further sustainable development across the industry.

Datuk Fazli Nordin said, "We envision a future where the palm oil industry is synonymous with sustainability. Our efforts today are laying the groundwork for a greener, more prosperous tomorrow.

"It is thus crucial to engage in open, factual discussions about the industry’s efforts in environmental stewardship and socio-economic contributions.

"API urges all stakeholders, including smallholders, businesses, NGOs, and consumers to join hands to protect the fundamental value of palm oil. The industry has long been the backbone of Malaysia’s vast growth and will continue to play a significant part in influencing the economy, livelihoods, and sustainability initiatives.”