MPOA: Palm oil industry's reputation a top concern for Malaysia

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KUALA LUMPUR (Oct 11): While the export of Malaysian palm oil to the United States is of an insignificant amount, the effect from the US' move to ban FGV Holdings Bhd's palm oil and palm oil products on the industry's reputation is of concern to Malaysia.

Malaysian Palm Oil Association (MPOA) chief executive officer Datuk Nageeb Wahab said the ban has affected some of the local companies, especially FGV.

"What we are more concerned about is the damage to the country's and the company's reputation.

"We view America and North America as a big potential market for expansion, that is why we are concerned about with what is happening today," he said on TV3's Money Matters talk show yesterday.

Last month, the US Customs and Border Protection (CBP) issued a Withhold Release Order against palm oil and palm oil products made by FGV and its subsidiaries and joint ventures, effective Sept 30, at all US ports of entry.

The CBP's Office of Trade directed the issuance of the order based on information it had received which allegedly raised concerns about allegations that the company had used forced labour in its production process.

Subsequently, FGV issued a statement to express its disappointment with the decision, saying that the company was fully committed to respecting human rights and to upholding labour standards, in line with the Sustainable Development Goals and to the United Nations Guiding Principles on Business and Human Rights.

Nageeb said the source of the allegations was some non-governmental organisations that had a negative perception about the industry.

"They have not provided the evidence. But we are engaging with them and we are trying to engage with the CBP and I think the affected party is in talks with them too.

"We are also engaging with the US embassy to find out what the best form of engagement is and how we can resolve this matter as soon as possible," he said.

During the half-an-hour talk show, the plantation veteran said the MPOA was also meeting and discussing the issue with the Foreign Ministry and the Plantation Industries and Commodities Ministry.

He added that a couple of months ago, glove maker company Top Glove Corp Bhd was also affected by a similar ban, but the situation was resolved.

MPOA has a total of 122 members, including FGV, representing 40% of the Malaysian palm oil industry.

The industry produces about 20 million tonnes of palm oil annually — accounting for 28% of the world's supply of palm oil — and consistently contributes about 5% to the country's gross domestic product.

The industry is also the second-biggest employer after the government, employing about 750,000 people.

In 2019, its revenue stood at RM65 billion.

The United States was Malaysia's eighth-biggest palm oil export destination last year with 542,161 tonnes in total.