The move towards mandatory MSPO certification of all oil palm plantations in Malaysia is an important development in recent months. It has significant implications as Malaysia is the second largest producer of palm oil and currently accounts for 39% of global production.
The Malaysian Sustainable Palm Oil (MSPO) standard is a national certification standard developed by the Malaysian government with input from stakeholders in the palm oil industry. The MSPO standards were launched in 2013 and the certification scheme implemented on a voluntary basis from 2015. The certification will be made compulsory by the end of 2019.
Currently only 4% of 5.7 million hectares of plantations nationwide are certified under the MSPO certification scheme. The government aims to get larger plantations certified by 2018 and small holders by 2019 and demonstrate Malaysia’s commitment to producing sustainable palm oil.
The push towards mandatory MSPO certification comes against the prospect of stronger regulatory requirements from the European Union( EU), the EU Parliament having passed a resolution in early April calling for a single certification scheme for all palm oil entering EU. This included the phasing out of vegetable oils that drive deforestation by 2020. The EU is one of the largest export markets for Malaysia.
The effectiveness of MSPO certification has to viewed with reference to other prevailing schemes. Currently there are at least nine different standards/initiatives for palm oil. Roundtable on Sustainable Palm oil ( RSPO ) is at present the main certification standard for palm oil worldwide. Currently 21% of global palm oil produced is RSPO certified. The Roundtable on Sustainable Palm Oil (RSPO) was set up in 2004 and certification is voluntary. Indonesia’s certification scheme(ISPO) is mandatory.
Indonesia and Malaysia have developed their own standards which they feel are more in line with the realities of the local palm oil industry and its stakeholders.
One of the major concerns with RSPO is with regards to small holders. Small holders account for about 40 % of palm oil production. Major producer countries contend that RSPO sets the ceiling too high for small holders. Perhaps MSPO can fill this gap and complement the RSPO in this regard. A comparison of ISPO, MSPO and RSPO can be found here.
Any regulatory instrument that improves sustainability in the palm oil industry is a step in the right direction, though too many different schemes may create confusion and make compliance onerous. We will analyse the MSPO ( particularly from a haze perspective) and develop our point of view separately.