JAKARTA Oct 14 A new palm oil producer grouping
being set up by Indonesia and Malaysia would replace "no
deforestation" pledges made by major palm companies in favour of
a joint set of standards proposed by the two countries, an
Indonesian minister said late Tuesday.
Indonesia wants big palm oil companies to row back on the
historic pledges made at a climate change summit last year,
arguing that they are hurting smallholder producers who cannot
afford to adopt sustainable forestry practices.
Indonesia is the world's biggest producer and exporter of
palm oil producer, a key driver of economic growth, and legions
of smallholders account for about 40 percent of its palm output.
"Indonesia and Malaysia have agreed to harmonize and combine
our two standards," Indonesia's chief natural resources minister
Rizal Ramli told parliament.
"This is an example of how to fight for our sovereignty. We
are the biggest palm oil producer. Why (should) the consumers
from the developed countries set the standard for us as they
Indonesia and Malaysia, which account for 85 percent of the
world's palm output, have since late August been discussing the
plan to set up an intergovernmental organisation called Council
of Palm Oil Producer Countries.
The move comes after major palm oil firms, including Cargill
, Golden Agri-Resources and Wilmar
International, signed the Indonesian Palm Oil Pledge
(IPOP) following pressure to adopt better practices.
Indonesia, which is home to the world's third-largest
tropical forests, has been criticised by green activists and
other Southeast Asian nations on forestry policy and for failing
to stop the region's annual "haze" problem from forest-burning.
Ramli said IPOP protected the interests of developed
countries' vegetable oil markets, and the new council would set
a standard that would also consider the welfare of smallholders.
Top palm buyers India and China would be lobbied to accept
the new standard, he said.
IPOP officials could not be reached for comment on
Wednesday, a national holiday in Indonesia, but have previously
said they are working with smallholder suppliers to help them
meet the pledges.
The new Council would also look to promote the image of palm
oil, stabilise prices, improve cooperation between top
producers, and coordinate on production, stocks, biodiesel
mandates and re-planting schemes, industry groups have said.
Further details are expected to be announced from late
October. Previous attempts to develop better palm relations
between the two countries have had limited success.
"It really depends on the will power of both governments,
and I suspect they will come together more when prices are low
than when prices are high," said Ivy Ng, analyst at CIMB
(Additional reporting and writing by Michael Taylor; reporting
by Agustinus Beo Da Costa; Editing by Richard Pullin)