The European Union is not using environmental non-government organisations as a “fifth column” to help it achieve its Renewable Energy Directive (RED) which places palm oil for biofuel at a disadvantage, says Trade Commissioner Karel de Gucht.
“RED is a result of a legislative decision between the council and parliament. We’re advancing sustainability in palm oil especially biofuel but it is not restricted to palm oil only.
“We’re not supporting NGOs for doing that (attacking the palm oil industry) but we’re also not restricting them. Of course, they try to influence what is happening in the European Parliament but they are entitled to do so on their own behalf,” he said.
He was speaking in an interview with the Business Times during his two-day stopover in a visit to Malaysia, Australia, New Zealand and Papua New Guinea last week.
He was asked to comment on recent allegations and comments by government officials and think tanks and claims that the EU has been running afoul of the World Trade Organisation (WTO) guidelines.
Many felt that Western edible oil producers were resorting to environmental NGOs since they cannot use trade protectionist measures.
He said he was not aware of a proposed joint action by both the Malaysian and Indonesian authorities to the WTO against the 27-member EU for the way it has formulated the RED as well as reports of it funding up to 70 per cent of the operating budgets of environmental NGOs.
The palm oil industries of both major producers, worth over US$50 billion (RM152 billion) annually, and commanding a 60 per cent market share of the world’s 17 oils and fats market, are finding themselves hapless against this European strategy.
De Gucht did not want to respond to British Member of European Parliament Roger Helmer’s allegation, saying it was the position and view of an individual MEP out of a total of 750. (Helmer claimed in Kuala Lumpur last month that the European Commission alone had provided more than euro60 million [RM356.8 million] to these pressure groups through a programme called LIFE+). Such funding implicates the EU for creating barriers to trade for agricultural products from developing countries.
“We’re not putting restrictions on the exports of palm oil to the European market - we’re simply giving advantage to palm oil that is produced in a sustainable manner.
“RED applies to biofuel and not other applications for palm oil in the food industry or cosmetics,” he argued, adding that recent market trends showed that less palm oil was finding its way to biofuel.
For 2010, Malaysia and the EU conducted trade totalling RM122.8 billion, of which palm oil came in a far second to the exports after electrical and electronics (E&E), commanding a 7.6 per cent share of exports, totalling RM5.25 billion.
On the ongoing bilateral free trade agreement (FTA) talks between Malaysia and the EU, de Gucht said there will be a sustainability chapter which will address the import of palm oil into the region.
The part on labour will be done with reference to the International Labour Organisation while the aspect on environment will be based on the environment conventions of the United Nations, he explained.
“The way it is implemented may vary from one FTA with another, and so it will be a subject of discussion between both countries.”
Malaysia is also engaged with the EU on the FLEGT ( Forest Law Enforcement, Governance and Trade) Voluntary Partnership Agreement for trade in timber products.
“We’re negotiating with Malaysia and we are confident that it will come into play in a short notice. The delay is on the Malaysian side, and we hope the government will be able to work it out.”
Would environment play a stumbling block in furthering exports to the EU?
“We expect countries to respect our requirements. Malaysian companies are doing so. For example, fish exporters adopted a self-imposed ban to ensure that their long term reputation on the EU market remained intact.”
In the long run, trade between both the EU and Malaysia will be served by high environment standards, he added.
