Fearing tobacco's fate, palm oil industry fights back

FE Team | Published: August 22, 2019 19:19:44

KUALA LUMPUR, Aug 21 (Reuters): On the morning of Feb. 26, executives from a Washington consultancy presented a strategy paper to some of the most powerful officials in the Malaysian palm oil industry.
The message: Don't allow environmental activists and Western governments to tarnish palm oil to the extent that it ends up a pariah product, like tobacco.
The $60 billion palm oil trade has been vilified by environmentalists because of the vast areas of tropical rainforest they say have been cleared to grow the commodity that is consumed by billions of people.
Malaysia and Indonesia, which together produce about 85 per cent of the world's palm, had been largely passive in response, comfortable in relying on the sustainability of demand for an oil used for cooking and in items like soaps and shampoos, snack foods, pizza, bread and biodiesel. Food accounts for nearly 70 per cent of global consumption of palm oil.
But last year, Malaysia launched a global public relations and lobbying offensive to protect the reputation of its key export, particularly in Europe. Reuters has pieced together a picture of the sweeping effort from internal public relations strategy documents as well as interviews with dozens of palm oil industry participants.
The European Union (EU) passed an act earlier this year to phase out palm oil from renewable fuel by 2030 due to deforestation concerns. While demand for palm oil used in EU biodiesel accounts for a fraction of global supply, palm oil producers in Malaysia and Indonesia worry the law could spur calls for regulation in its usage in food.
Malaysia has led the PR offensive since the EU began working on the law, as it is far more reliant on exports than larger rival Indonesia, and ships about 85 per cent of its total palm oil production overseas annually.
Malaysian Prime Minister Mahathir Mohamad has said the EU law was "grossly unfair" and was an attempt to protect alternative oils that Europe produced itself.
The publicity campaign aimed at critics of palm oil has been coordinated by the Malaysian Palm Oil Council (MPOC), a state agency responsible for promoting palm oil and looking for trade opportunities for the product.
The agency is funded at least partly by a fee paid by plantation companies based on palm oil production. MPOC's board includes representatives from plantation companies, including Sime Darby Plantation Bhd, the world's biggest oil palm planter by land, and IOI Corp.
The representatives of the two companies did not respond to requests for comment.
Its campaign is centered around small holder farmers, carried out by platforms that say they represent farmers but are created or run by PR firms hired by the MPOC, the strategy documents dated Aug 6, 2018 and Feb 26, 2019, show.
MPOC has also approved funding news sites, researchers, op-eds and former politicians to speak up for palm oil and undermine the EU law, the documents show.
None of the groups or individuals identified in the proposals have been transparent about their funding and have often claimed to be independent voices.
At least three PR firms hired by the MPOC are running these campaigns, copies of their proposals seen by Reuters show. The MPOC approved all their proposals, according to two sources with direct knowledge of the matter.
The main company involved in the strategy is the DCI Group, a Washington-based public relations firm that has previously developed campaigns for tobacco and oil multinationals. Its clients have included Altria and the former Burmese military junta, according to US public records and DCI itself.
Asked by Reuters for comment on its strategy, DCI said it was engaged in the Malaysian campaign but did not give details.
"We are proud to work with Malaysia's palm oil industry in its fight to defend the jobs and livelihoods of small farmers against unfair trade and environmental policies which perpetuate global poverty," said Justin Peterson, managing partner at DCI Group, in an e-mail.