POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 2: Opportunities for Palm Oil in Asian Market:
Opportunities for Certified Sustainable Malaysian Palm Oil in Asian Markets
By: Mr. Mohammad Hafezh

Mr Mohammad Hafezh bin Abdul Rahman has been involved in the palm oil industry for the past 15 years especially in marketing, market development and market analysis. He was directly involved in various market activities in the Asia Pacific region and later, the Middle East where he engaged with various stakeholders from food manufacturers, traders, consumers and even government officials in trying to increase the import of Malaysian palm oil in these regions and also improve palm oil’s image as a healthy and sustainable source of oils and fats. He has brought over his expertise in market strategy and industry engagements to the Malaysian Palm Oil Certification Council (MPOCC) to link and proves to all stakeholders that Malaysian palm oil is indeed sustainable where environmental conservation, social welfare on top of food safety are strictly adhered by the Malaysian palm oil industry players through the Malaysian Sustainable Palm Oil (MSPO) certification. With an aspiration to get MSPO recognized in the global market, Mr Hafezh has believed in strengthening the MSPO standards through continuous improvements, constant communications to various stakeholders and direct engagement with local and foreign companies to convince them that MSPO is a good alternative in offering assurance that the palm oil produced in Malaysia satisfies to all sustainability requirements while ensuring everyone involved throughout the supply chain will not be left behind.
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Countries with the largest and fastest growing producing and consuming of palm oil are situated in Asia. India, China, and Indonesia account for 40% of all pathways to promote sustainable trade between key trading nations. Of this, 85-90 % comes from Malaysia and Indonesia, where worldwide demand for palm oil has lifted incomes, especially in rural areas, but at the cost of tremendous environmental devastation such deforestation and often labour and human rights abuses as most globally debated sustainable management issues. However, at the same time, it views as a poverty-reduction scheme by the producing nations and as a growth engine for developing economies by the international finance organisations. The commodity then later witnessed an increase in the adoption of sustainability standards includes voluntary standards such as Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability and Carbon Certification (ISCC) and national standards namely Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO). Latest initiative done by India in development of Indian Palm Oil Sustainability (IPOS) supporting the conviction that national standards are key instruments for sustainable palm oil production.

For MSPO, efforts have been put in place to developed, educate, implement, and finally mandatory for all the plantations including smallholders to be certified with MSPO by stages. It later evolved with the launched of MSPO Trace in 2019 where it meets the demand of traceability and transparency in sustainability management. MSPO-Trace is accessible to the palm oil product end-consumer to trace the origin of the palm oil. Besides that, there are also collaboration with importing countries such as China Green Food, adoption in Olympics 2020 for sustainable sourcing policy, and ILO, US ILAB for addressing labour issue in the oil palm plantations. With the increase of commitments by the producing and importing countries and companies towards sustainable sourcing, MSPO will create a competitive edge of certified sustainable palm oil.


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Questions & Answers (8) :
HCLeow
7 months ago
Dear Mr. Mohammad Hafezh, Is MPOCC working with India to establish the Indian Palm Oil Sustainability Framework ? Thank you
MPOCC:
Dear Mr Leow, Thank you for your question and interest in the MSPO certification scheme. We apologise for the delay in responding to your question. MPOCC is not involved with any Indian agencies in the development of the Indian Palm Oil Sustainability Framework but we do note the efforts that were made by the Indian industry associations, NGOs and local stakeholders. This is indeed positive progress for India towards achieving the UN SDGs. MPOCC welcomes any partnership with Indian stakeholders, if required, as one of many ways to support the palm oil sustainability development in the country. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
Sudarman bin Sudirman
7 months ago
Dear Mr. Mohammad Hafezh, What is our next plan to increase and strengthen the acceptance / recognition of our MSPO certification at international level, especially among CPO buyers. When is our forecast of MSPO to be fully accepted as substitute of RSPO?
MPOCC:
Dear En Sudarman, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: The existence of MSPO is not to replace any existing certification schemes. The MSPO is the Malaysian government's commitment to ensure that the whole palm oil industry in Malaysia adopts sustainable practices and offers fair market access to everyone involved in the industry, especially the smallholders and not just big plantation companies. Previously, our efforts have been focused on getting a significant number of certified entities. Now that it has reached around 90%, the focus is shifted to get market acceptance and we have already started through synergistic efforts between government agencies i.e. getting accepted in the Tokyo Games as a sustainable source for palm oil. We are leveraging on the strong relations between the governments to promote acceptance. We do direct engagements with companies from around the world that are interested in starting their sustainability journey and assist them in getting the MSPO Supply Chain Certificate to complete the supply chain. MSPO is new and like any new product the cycle starts with 'reach' and that is what we are trying to do. We are currently trying to engage as many stakeholders to create the widest reach possible and to create awareness on the MSPO as a potential scheme of certified sustainable palm oil. MPOCC realises the importance of market acceptance and all our efforts are now geared towards it. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
George Teh
7 months ago
Dear Mr. Hafezh Please enlighten what factors stand in the way of Malaysia and Indonesia from jointly rolling out and administering a joint SPO (IndoMas or Maslindo or ASEAN SPO)? Would a joint SPO between the world's top-2 producers add more boost to separate MSPO and ISPO in place (and in competition?) currently? Thank you.
MPOCC:
Dear Mr Teh, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: MSPO and ISPO are national initiatives to show the government's commitment to sustainable palm oil production and that is the only similarity between the two. In terms of implementation, it is a bit different as we have different legislations between the two countries. We also have different geographic conditions which makes monitoring and on-the-ground implementation cannot be the same. There are other factors but in short, both certifications cannot be unified as compared to voluntary schemes as it needs to suit the local legal framework, respective national agenda and other varying factors between the two countries. However, through the Council of Palm Oil Producing Countries (CPOPC) the 2 countries have been actively collaborating on many issues and are currently in talks of producing a common framework for sustainable palm oil as a guideline. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
WONG HOOI PENG
7 months ago
Some EU countries have decided to stop using palm based biodiesel from 2023. The decision is made despite all the available certifications such as RSPO, MSPO and etc. What can oil palm planting countries do? Thank you.
MPOCC:
Dear Mr Wong, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: The real problem is protectionism policy by EU rather than the sustainability of the palm oil industry. Whatever shortcoming by the industry can always be improved and we are in the journey towards making the industry better. What we can do is to raise our bar of performance and continuously making effort to achieve sustainable palm oil production. We should not do it just for market acceptance but to show the country’s and the industry’s commitment towards sustainable development and climate action. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
LAW CHOON SHENG
7 months ago
I hope you do not mind me asking another few questions. Question 3: ISPO was implemented earlier in Indonesia before MSPO implementation in Malaysia. I heard that Malaysia is ahead with 89% certified. Yet there is more palm oil sales to India, etc. from Indonesia than Malaysia. My guess is cheaper price is more important than sustainable palm oil for Asian countries. What are your views? Question 4: MSPO is mandatory. Meaning there will be punishment for companies who cannot comply. What is the punishment? Question 5: Usually small holders will have problems to comply to certification. The bigger estates have no problem. So small holders will likely be punished by your mandatory system. Is it sad? What will MPOCC do to overcome these small holder from suffering from your mandatory system?
MPOCC:
Dear Mr Law, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: Q3: It is mainly due to tax-related matters rather than MSPO’s achievement. Elaborating on your observation, it is true that price will also be the key to any commodity trade and as I have addressed in my presentation, business as usual is still a problem where companies in Asia have yet to adopt sustainability in their business practices. These countries that were shown in the presentation have the potential from the governments’ willingness to commit to sustainable development goals which will reflect in policies that could favour MSPO. Q4: Licensing will be suspended and terminated if the companies are not in compliance in accordance with MSPO. This will result in plantations not able to sell their fruits when they don’t have licenses. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
LAW CHOON SHENG
7 months ago
Tuan Mohamad Hafezh, Congratulations on your appointment as the CEO of MPOCC. I find your presentation very helpful to understand the usefulness of MSPO. I have two questions to help me better understand the system. Question 1: 89% of oil palm land is certified under MSPO. Well done. The remaining 11% have problems which will not allow you to get 100% area certified. What are the common problems faced by this 11% that make it difficult for them to be certified? Question 2. MSPO system has got all the good qualities learnt from earlier systems like RSPO, ISCC etc. Yet two very big companies of Sime Darby and Felda got into problems with forced labour issues recently with importing countries. I guess these two companies were certified under MSPO. Does MSPO not take into account this matter of forced labour? If MSPO taken into account this matter, what happen?
MPOCC:
Dear Mr Law, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: Q1: The 11% are mainly independent smallholders and concerted efforts between government agencies are made to ensure that they will be 100% certified. The major challenge is to identify the smallholders who have yet to get certified and inform them that it is mandatory to be MSPO certified. Though we can get their contact information through the licensing details, some have moved and some are no longer actively managing their plantations. Q2: MSPO Standard does have labour elements in the standard to curb these kinds of issues. Currently, MSPO Standard is in process of Standard Revision where we are looking at strengthening further on overall requirements, including details of labour conditions, and putting in international indicators. Those cases involving the two big companies are merely based on allegations and we have not obtained any constructive evidence of such potential non-compliance from the importing countries. Our certification is based on a 3rd party audit where we have no influence over the outcome. As for both companies, the auditors reported no indication of forced labour being practiced. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
WONG YQ
7 months ago
Certificate sustainable palm oil will lead Palm oil to be higher value vegetable oil compared to coconut/ soybean/ sunflower oil? Or will this become the other way that others vegetables oil will be more popular ? Do they have any certification sustainability on other vegetables oil? Certificate sustainable palm oil will lead Palm oil to be higher value vegetable oil compared to coconut/ soybean/ sunflower oil? Or will this become the other way that others vegetables oil will be more popular ? Do they have any certification sustainability on other vegetables oil?
MPOCC:
Dear Mr Wong, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: Sustainable certification especially MSPO, does not advocate for higher value as it is a practice that needs to be adopted and become a culture of good practices. This is the reason why the MSPO was made mandatory certification through government initiative. Other vegetable oils do have sustainability certification; however, every crop has its own landscape and issues that the respective certification scheme will handle. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
Shaheen
7 months ago
There are a few certification for palm oil. Could you enlighten us on how does the agriculture practice in MSPO differs from the other major one like RSPO?Does palm oil products manufacturer needs to pay your organization to be audited if they want to use MSPO. If yes how much it will cost?
MPOCC:
Dear Shaheen, Thank you for your question and interest in the MSPO certification scheme. Please find the answers below: 1. MSPO certification and other scheme does not deviate much from each other as the sustainability elements are more or less the same. Therefore, it is best to know that MSPO is a government initiative and mandatory which is most important to enforce sustainability across the palm oil industry to curb all potential non-compliance against sustainability. 2. MSPO audit works through a third-party independent body that will work between the Certificate Holder and the Certification Body (CB). Thus, the cost of auditing will remain between them. However, MPOCC will be monitoring the CB through the Accreditation Body. At this moment, no charges have been imposed by MPOCC for those who wish to get MSPO certification. For more information, you may reach us at hellomspo@mpocc.org.my Thank you and have a good day.
7 months ago
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