Prosperity or Predicament?

Decoding Certification Challenges in Malaysia's Palm Oil Industry

By: Serina Rahman, Lee Poh Onn

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Paperback | 20 June 2024

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Oil palm was brought to Malaysia from West Africa as part of British colonial agricultural development initiatives, but the refining of crude palm oil only began in the 1970s as part of the move by the Malaysian government to industrialize the country's agrarian economy. Malaysia is the world's second-largest producer of palm oil, after Indonesia. Both countries account for about 85 per cent of total exports. Incidentally, smallholders produce about 40 per cent of the total output of palm oil in Malaysia. The palm oil industry is mired in controversy. Global campaigns originating in Europe and the US have branded the crop the biggest cause of deforestation, with proposed bans to follow in December 2024. Certification has been proposed as the solution to address gaps in sustainability. Sabah is used as an illustrative case study of an effective approach for statewide certification using both the Malaysian Sustainable Palm Oil (MSPO) and Roundtable for Sustainable Palm Oil (RSPO) schemes.

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