KOTA KINABALU: Malaysian banks and government-mandated institutions that invest in growth sectors must commit to play a role in improving social and environmental standards in the palm oil industry.
The Malaysian Palm Oil NGO Coalition (MPONGOC) said maximising shareholder profit was a valid goal at the individual company level, but often did not translate into the best goal of the entire industry for society at large. The coalition said oil palm plantations represent the second largest land-use in Malaysia after forests and the palm oil sector, as a whole, should pay equal attention to people, planet and profit.
MPONGOC named Maybank, CIMB Bank, Public Bank and RHB Bank as some of the banks that together represent well over half of Malaysia’s banking sector by asset size and market capitalisation.
“A commitment by these large banks and other institutions such as the Employees Provident Fund can go a long way in hastening and cementing genuine sustainability in Malaysia’s palm oil industry,” the coalition said in a statement.
MPONGOC is heartened by the commitment made in December last year by Wilmar, a major palm oil grower and trader, to ‘no deforestation, no development on peat and no exploitation of people and communities,’ with a refusal to buy palm oil from suppliers who do not adhere to these standards after December 2015.
“If other growers and traders adopt the same policy, both the commitment and the image of the entire industry in Malaysia to treat people, planet and profit equally would be greatly strengthened.
“This should serve to promote global market access for Malaysian palm oil products. And, one way to push this forward is for Malaysian banks and institutions to adopt the Wilmar standards when assessing new proposals from oil palm growers and when deciding to invest in the sector,” the statement said.
MPONGOC said it advocated for support of the Roundtable on Sustainable Palm Oil (RSPO), where the three pillars of sustainability are embedded in its principles and criteria, and have been developed and accepted globally.
The coalition believed that there was a good business case for Malaysia to whole-heartedly endorse and aspire to RSPO standards, adding that there was growing demand from customers for sustainable certified palm oil.
“MPONGOC’s view is that buyers of palm oil, and products containing palm oil globally, will increasingly demand evidence of high social and environmental standards.
“This view is not just acceding to extreme Western demands, but realisation that the boundaries between Western and Asian markets will become less sharp, and that people globally will want to see more equal emphasis given to social, environmental and economic elements of all commodity production,” MPONGOC said. — Bernama