MSPO Meets the EUDR Challenge
On 30th December 2024, the European Union’s EU Deforestation Regulation (EUDR) will take effect.
The EUDR is a non-tariff barrier that impacts products primarily grown and produced in the developing world: Asia, Latin America and Africa.
The EUDR:
Imposes burdens, especially on low-to-middle-income markets
Ignores objections and impact on sustainable development
Increases compliance costs
Creates problems for exporters
Restricts small farmers’ participation
European stakeholders have even expressed their concerns with the regulation.
Malaysia is Ready to Meet the Challenge
In the face of these calls for delay, including those by the Malaysian government, Malaysia is ready to meet the EUDR challenge if the European Commission is ready to play its part with a key trading partner. Malaysia has:
1
A history of robust laws and regulations to ensure sustainable palm oil production
A mandatory national certification – Malaysian Sustainable Palm Oil (MSPO) – that is in conformance with international best practices and standards. The MSPO is a clear solution for compliance with the EUDR.
2
No certification scheme is perfect.
And MSPO is continuously improving. The question is: will the EU accept that they have written an imperfect Regulation that no stakeholder can meet, and advance the cause of sustainability, or will they stubbornly demand implementation regardless of consequences?
These are Big Questions for Brussels.
Independent Assessment of MSPO Compliance with EUDR
MPOC commissioned the renowned European certification auditor and sustainability expert, Pierre Bois d’Enghien, to author a comprehensive assessment of MSPO’s alignment with EUDR rules. The key findings from the assessment are as follows:
MEETS EU DUE DILIGENCE RULES
MSPO provides adequate information for the EUDR’s due diligence statement, such as product description, country of production, supplier identification, verification of deforestation-free status and legal compliance, and geolocation data.
MEETS EUDR FOREST RULES
MSPO prohibits the conversion of natural forest, protected areas and high conservation value areas after 31 December 2019. Bois d’Enghien emphasised that “the MSPO requirement meets and goes beyond the EUDR standard.”
MEETS EUDR LEGALITY RULES
MSPO ensures compliance with local, national and international laws and regulations, including those related to land use rights, environmental protection, labour rights, human rights and the principle of free, prior and informed consent. Bois d’Enghien particularly noted the “MSPO contains additional criteria for: rights to use land; and native customary rights.”
EUDR Needs More Work
There are significant areas in which the EU needs to work with Malaysia to find the necessary common ground. The uncertainty from the EU around EUDR and other rules, is not helpful for MSPO or Malaysian exporters:
- The EUDR’s final rules are still unclear and yet to be completely defined, which makes the final compliance uncertain;
- The accuracy and reliability of the EU’s global forest cover map is uncertain, and the EU is promoting it as a tool for importers, despite these uncertainties;
- The traceability and risk assessment of products throughout complex palm oil supply chains will remain problematic, even if there is a guarantee of zero deforestation;
- The exclusion of smallholders is likely to remain a risk, as companies will take the ‘easiest path’ to compliance.