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Over the past few decades, the palm oil sector has been confronted by multiple false claims about the environmental impacts of palm oil. Some of these claims have even gone so far as to result in boycotts of palm oil; this was the case recently with Iceland supermarket in the U.K.

This case is worth analysing, because it highlights some underlying issues for all those involved in the palm oil sector. Most prominently, the industry should never assume a business-as-usual scenario. Anti-palm oil campaigners are dogged and have found allies in the business world in Europe. This isn’t surprising as campaigners and competitors all have a stake in the oils and fats business.

The palm oil sector must be realistic and accept that there will continue to be many more such disruptions in future; after all some say disruption is the new normal.

A USDA article dated November 3, 2016, provides a good summary of agricultural risk where it states that risk is an important aspect of the farming business in any country. The uncertainties inherent in weather, yields, prices, government policies, global markets, and other factors that impact farming can cause large swings in farm income. Five general types of risk are described: production risk, price or market risk, financial risk, institutional risk, and human or personal risk. I will add an additional risk, the risk of issues management – or rather, the risk of not properly instituting an issues-management strategy.

Issues management is a process that helps organisations to respond appropriately when under fire. It is critical in the modern, social media-driven world; a negative story can impact stakeholder perception and have real-world consequences within hours of being posted. This impact is often still felt even if the negative story is false or inaccurate.

The 18th Century writer Jonathan Swift was the originator of the famous phrase that “A lie can travel halfway around the world, before the truth has even pulled its boots on”. So, in this age of instant mass-communication, the challenge for the palm oil sector is: how quickly can we pull on our boots?

According to Elizabeth Dougal of the Institute of Public Relations (IPR), issues are commonly described as having a lifecycle comprising five stages–early, emerging, current, crisis and dormant. In simple terms, as the issue moves through the first four stages, it attracts more attention and becomes less manageable from the organization’s point of view.

In other words, she says that if the organization’s issues-management process detects an issue in the earliest stage, more response choices are available to decision-makers.

As the issue matures, the number of engaged stakeholders, publics and other influencers expands, positions on the issue become more entrenched and the strategic choices available to the organization shrink. If and when the issue becomes a crisis for the organization, the only available responses are reactive and are sometimes imposed by external parties, such as government agencies.

This naturally leads to two necessary paths for issues-management, one short-term and one long-term. In the short-term, the ability to respond to an issue, challenge or attack in the shortest possible time and in the most effective manner can make or break the reputation of an industry. In the long-term, the ability to manage ongoing public policy issues is crucial to assist the ongoing success of the sector. It is not always about outright victory: it is about stability, and keeping the show on the road. In the end, issues-management and communication are simply servants that allow the business units to keep doing what they do best: in this case, producing and selling high-quality palm oil to a global marketplace.

The announcement by Iceland, a UK supermarket, that it would cease using all palm oil in its own-branded products was one such short-term challenge. The announcement was accompanied by a video where palm oil farmers were accused of a wide range of environmental and social ills. This activity was reported in the UK media and naturally got attention here in Malaysia and other palm oil producing countries.

The Iceland video made waves in Malaysia for two reasons: a) it represented a personal attack against 650,000 small farmers who cultivate oil palm and do so sustainably in order to feed their families; and b) the video was factually inaccurate on multiple counts. Let’s look at those in turn.

First, the hit job from Iceland. The video, left a bad taste for many small famers in Malaysia as this was a direct attack on their jobs and income.  Many voiced their frustration that those who live miles away from countries that plant oil palm have failed to understand or appreciate this important commodity and sector which has helped to lift the poor and landless small farmers out of poverty and provide them a decent income to have a better life for them and their children.

For farmers, their hard work means they are able to put food on the table and send their children to school so that they too have excess to education and a better life in future. This is a common dream of a farmer and has become a reality for many small famers in Malaysia.

Farming is after all, not the most attractive job. Many young people shy away from jobs in this sector as it involves long hours under the hot tropical weather and the income earned can be unpredictable. It can be rather challenging and daunting for a farmer who is a single-income earner to provide for his family of almost five people.

The second question, on the factual inaccuracies of Iceland’s video, led to a response from Malaysia. It was important that Malaysia set the record straight on claims made by Iceland supermarket. If there had been no response, then the falsehoods stand alone and would never be challenged. From a long-term perspective that would be a strategic mistake.

The President of NASH released a statement outlining the factual errors in the Iceland video.  Dato’ Haji Aliasak Bin Haji Ambia, President, National Association of Small Holders (NASH), made the following statement:

“Iceland through this action longs for the dark days of Britain’s Colonial past where they tell us what to do from Britain, while at the same time taking away our incomes and our ability to feed our families. This announcement is disrespectful and without any basis in fact.  Malaysian Palm Oil is sustainable, unlike the rapeseed and sunflower oil they will now be using. Iceland should be ashamed that their new policy will take food off the plates of our communities.”

 Sir Jonathon Porritt, an environmentalist and writer posted a reply on April 27 rebutting comments by Iceland’s Managing Director, Richard Walker, who had claimed that there is no such thing as ‘sustainable’ palm oil available to retailers. According to Sir Jonathon Porritt, “What an ignorant, intellectually lazy position that is, belittling more than a decade’s worth of efforts by governments, academics, NGOs and the companies themselves to determine appropriate criteria for managing palm oil plantations in genuinely sustainable ways”.

 The Faces of Palm Oil website, with the support of Malaysian small famers, also released a video explaining the many factual errors in the video by Iceland supermarket.

Amongst the claims debunked in this video was that palm oil is a cause of deforestation.

According to NASA, rarely is there a single cause of deforestation. Most often, multiple processes work simultaneously or sequentially to cause deforestation. People have been deforesting the Earth for thousands of years, primarily to clear land for crops or livestock.  Europe, for example, has been deforesting for centuries: so much so that their forest is almost gone… only 11% is left in Richard Walker’s home country, the U.K.

So, let’s ask the question, is palm oil a cause of deforestation? A 2012 study on the impact of EU consumption on deforestation, reveals that livestock is the single biggest source of global deforestation. The data clearly states that palm oil is a very small contributor to global deforestation (2.5%) while beef and livestock are around 10 times larger (24%) and soy is more than double (5.4%) while maize is also larger at (3.3%).  A larger percentage, (48%) was due to other causes.

The authors of the study confirm the fact that due to oil palm’s high yields, it occupies the smallest area of the four major oil crops worldwide. Replacing palm oil with other oilseed crops would mean a much bigger footprint on land resources.

 Malaysia continues to maintain 54.9% of its land area under forest cover, which exceeds the country’s commitment of 50% at the Rio Earth Summit in 1992. A total of 5.8 million hectares are planted with oil palm in Malaysia.  This accounts for 17% of Malaysia’s land area and further equates to only 0.11% of the total agricultural global agricultural area.

So – palm oil produces more oil, on less land, is responsible for less deforestation, and Malaysia (a major palm oil producer) is protecting forest at world-leading levels. That is not all.

Malaysia has committed to make MSPO mandatory by 2019. Through MSPO, the government is taking the most critical step to ensure there is sufficient public awareness of any activity related to oil palm that could potentially cause harm to the environment and yet also create additional opportunities for small farmers to invest in more environmentally and socially responsible methods.

In addition, what the industry is doing is to provide a choice to buyers and consumers as they now have more options to choose for a certification scheme; RSPO, MSPO or ISPO. These certification schemes provide businesses a choice to choose a scheme that best meets their needs. The buyer is given an option.  It won’t be long before certification schemes will be tailor-made to meet the requirements of a customer.  It’s like a menu where you select the best ingredients to create a ‘winning’ dish.  It’s all a matter of choice.

So – Iceland is criticized as ‘ignorant and intellectually lazy’ by environmentalists; and is criticized as ‘colonial’ by small farmers.

What should Iceland be doing instead?

Instead of criticising palm oil, Iceland should applaud countries like Malaysia who have achieved the double benefit of social gains (through small farmer communities) and environmental gains (by taking concrete steps to ensure that the entire palm oil produced is certified).

Unlike Richard Walker, Malaysia is not stuck in the past. Rather the industry is looking to the future: using technology and innovation to guarantee Malaysia as the world-leader in sustainable palm oil, both from an environmental standpoint and a socio-economic standpoint.

As a result of investing and planting oil palm, the farmers are able to earn income that enables them to invest in new technologies and sound environmental practices. That means a better management of resources. This is a long-term choice they have made.  As the small farmers constitute 40% of the oil palm hectarage here in Malaysia, they have made a choice to adopt MSPO which allows them to embrace and comply to sustainable practices. We must support this choice.

Instead of boycotting palm oil, would it not be better for companies or countries to assist the industry by providing know-how and advice on what they require for their businesses. After all, Malaysia can meet any of the stringent certification systems in existence in the global market. Instead of boycotting palm oil, encourage sustainable practices by supporting the certification scheme that meets your needs.

The oil palm has had a good track record of 100 years in Malaysia. To survive the next 100 years, the sector must be vigilant to both short-term and long-term threats.  Issues-management is central to combating these current threats, and planning for future risk mitigation.

The producers too must not be too distracted by all the noise, we must remain united and continue supporting all Malaysian Palm Oil. It is extremely important for producing countries to take control of palm oil’s international image and reputation. The reality is, industries like palm oil have to accept that many decisions that are made against its interest could be political; to protect local industries in countries where palm oil competes with local oilseeds. The threats will remain, and so should our commitment to strong issues-management and robust counter-arguments to challenge claims.

 

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