THE Plantation Industries and Commodities Ministry (MPIC) has initiated legal action against the European Union (EU) and its member states France and Lithuania following their anti-palm oil measures.
With the cooperation of the Attorney General’s Chambers and the International Trade and Industry Ministry, MPIC filed a request for consultations under the World Trade Organisation’s (WTO) Dispute Settlement Mechanism (DSM).
“This legal action demonstrates the Government’s seriousness in safeguarding the country’s palm oil industry against the policy implemented by the EU.
“Malaysia hopes that the WTO, through its Dispute Settlement Body, would study and consider Malaysia’s arguments and explanation in a fair and equitable manner in accordance with the WTO’s legal principles,” MPIC minister Datuk Dr Mohd Khairuddin Aman Razali said in a statement.
He said the legal action resulted from measures taken by the EU and its member states in relation to the implementation of the Delegated Regulation of the EU Renewable Energy Directive II (RED II) which was impacting the country’s palm oil industry.
According to him, Malaysia has undertaken various measures, including organising economic and technical missions to Europe and providing feedback on the EU RED II’s implementation.
Nonetheless, the EU continued the implementation of EU RED II without taking into consideration Malaysia’s commitment and views, he said.
The delegated regulation, among others, explained the criteria or methodology used to decide whether the sources in the manufacturing of biofuel can lead to a high or low indirect land use change (ILUC) rate, as well as its effects on greenhouse emissions.
“This will cause the usage of palm oil for biofuels in the EU to be excluded from the renewable energy target and thus create an unreasonable trade barrier against the country’s palm oil industry.
“The EU’s action also goes against the free trade practice principles outlined by the WTO,” he said.
Smallholders at risk
Talks of Malaysia fighting back against the policies under EU RED II goes back to mid-2020, as such a move would gravely affect the livelihoods of Malaysian palm oil smallholders.
“This discrimination by the EU will have a negative impact on more than three million Malaysians involved in the palm oil industry, as well as over half a million oil palm smallholders,” Mohd Khairuddin said in a statement.
“It is also seen as being one-sided when only palm oil is categorised as having a high ILUC rate risk among vegetable oils in terms of biofuel sources,” he added. – Jan 16, 2021
