MALAYSIA INITIATES LEGAL ACTION AGAINST THE EUROPEAN
UNION OVER THE ANTI-PALM OIL CAMPAIGN
1. In line with the decision made by Cabinet Meeting held on 1st July 2020, the Ministry of Plantation Industries and Commodities (MPIC) with the cooperation of the Attorney General's Chambers and the Ministry of International Trade and Industries on 15 January 2021, has initiated a legal action against the European Union (EU) and its member states France and Lithuania following their anti-palm oil campaign. Malaysia has filed a request for consultations under the World Trade Organisation's (WTO) Dispute Settlement Mechanism (DSM).
2. This legal action is the result 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 (EU RED II) which was impacting Malaysia’s palm oil industry. Malaysia has taken various steps which included Economic and Technical Missions to Europe apart from giving feedback on the implementation of EU RED II. However, the EU has taken the decision to implement the EU RED II without considering Malaysia’s views and commitment for sustainable oil palm measures.
3. The implementation of EU RED II has classified palm oil as a product that brings about high rate of indirect Land Use Change (ILUC). As a result, the usage of palm oil as feedstock for biofuel in the EU is not accounted for in the renewable energy target, thus creating an unreasonable trade barrier against Malaysia’s palm oil industry. The action taken by the EU is against the very principle of free trade practice outlined by the WTO.
4. Malaysia’s 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. Malaysia will give its full commitment and cooperation in this process especially in the consultative session and ensuing discussions with WTO Panel to be
established in the near future.
5. At the same time, Malaysia will remain as the third party observer for the legal action filed by Indonesia (Case Number DS 593: European Union – Certain measures concerning palm oil and oil palm crop-based biofuels) through the DSM in the WTO. Malaysia’s involvement is crucial as a sign of support and solidarity towards oil palm producing countries.
6. The Malaysian Government through MPIC will continue to give highest commitment in safeguarding the importance of its palm oil industry which has contributed much to the national socio-economic development.
YB DATO’ DR MOHD KHAIRUDDIN AMAN RAZALI
Minister of Plantation Industries and Commodities
15 January 2021