Oil Palm Bulletin 71 (November 2015) p.

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Malaysian Sustainable Palm Oil

Ainie Kuntom*; Ahmad Kushairi* and Choo, Y M*

Abstract digunakan untuk pengeluar besar, sederhana dan

kecil, dan juga kelompok pekebun kecil. Panduan
The Malaysian Standard (MS) for the production untuk mematuhi prinsip, kriteria dan petunjuk,
of the Malaysian Sustainable Palm Oil (MSPO) seperti yang digabungkan dalam standard
is applicable to the processes along the whole MSPO terdapat dalam empat dokumen spesifik,
supply chain commencing from plantations and yang merupakan sebahagian daripada sistem
smallholders to mills, the main gateway; and pensijilan, khususnya, pengeluaran minyak sawit
followed by kernel crushing, refining, storage and mampan yang disahkan (CSPO) pada peringkat
transportation. It can be applied to either the whole kilang. Sistem ini juga membolehkan pensijilan
supply chain, parts of the supply chain or a single kemampanan produk/output individu selepas
product/process in the supply chain. The MS applies operasi pengilangan selesai dan juga kemudahan
to all types of palm oil production irrespective of yang perlu sebelum penghantaran.
the source of raw material, geographical location, Keywords: Malaysian Standard (MS), Malaysian
technology and end user. It is applicable to big, Sustainable Palm Oil (MSPO), smallholders,
medium and small producers as well as clusters plantations, mills.
of smallholders. Guidance to comply with the
principles, criteria and indicators, as incorporated in
the standard on MSPO, is provided in four specific Introduction
documents, which are part of the certification system
covering, in particular, production of certified The idea of sustainability was introduced over two
sustainable palm oil (CSPO) at the milling stage. decades ago at the world summit in Rio de Janeiro,
The system also allows for individual sustainability Brazil in 1992 and it became popular in 2005
certification of products/outputs of post-milling when many initiatives were taken to capture the
operations as well as essential facilities prior to concept despite its lack of scientifically accepted
shipping. and universally adopted guidelines. Sustainability
is currently a necessity in the development and
Abstrak management of any industry. In the light of this
requirement, products produced by any country
Standard Malaysia (MS) untuk pengeluaran have to be sustainably produced for it to be
Minyak Sawit Lestari Malaysia (MSPO) sesuai acceptable globally. Oil palm, the main agricultural
digunakan untuk keseluruhan rantaian proses commodity of Malaysia, has to be produced in a
bekalan bermula dari ladang dan pekebun kecil sustainable manner in order for the oil produced to
ke pintu masuk utama kilang, dan diikuti oleh be acceptable in the world market. In view of this,
pelumatan isirong, penapisan, penyimpanan dan the oil palm industry has to develop a standard
pengangkutan. MS boleh digunakan sama ada which addresses all aspects of sustainability.
dalam keseluruhan/sebahagian rantaian bekalan,
atau produk/proses tunggal dalam rantaian bekalan. The sustainability concept, built on the 3Ps
MS terpakai untuk semua jenis pengeluaran minyak of people, planet and profit, encompasses four
sawit tanpa mengira sumber bahan mentah, lokasi footprints - the ecological footprint (EF), which
geografi, teknologi dan pengguna akhir. Ia juga boleh was introduced in 1990; followed by the carbon
footprint (CF) and the water footprint (WF) in the
2000s; and now the nitrogen footprint (NF), which
* Malaysian Palm Oil Board, emerged in 2012. All four footprints measure,
6 Persiaran Institusi, Bandar Baru Bangi, in different ways, human appropriation of the
43000 Kajang, Selangor, Malaysia. planet’s natural resources and its carrying capacity.
E-mail: [email protected]

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Oil Palm Bulletin 71

The EF measures the use of bio-productive space sustainable principles and criteria for the
in hectares; the CF measures the greenhouse gas production of sustainable palm oil.
(GHG) emissions expressed in carbon dioxide
equivalents per unit of time or product; the WF Sustainability Standards
measures the consumption and contamination of
freshwater resources in cubic metres per year; and There are a few standards on sustainability
the NF measures the amount of nitrogen released available for palm oil. The main one is the
into the environment in relation to consumption. Roundtable on Sustainable Palm Oil (RSPO),
A common characteristic of all the four footprints which was established by the oil palm business
is that they can be related to specific activities, fraternity and non-governmental organisations.
products and consumption patterns. Most Other sustainability standards - specific for biofuel
importantly, traceability and quantified input and are the International Sustainability and Carbon
output in a life cycle approach over the whole Certification (ISCC) and the Roundtable for
supply chain, assume paramount importance. Sustainable Biomaterials (RSB). Most members of
the industry have difficulties complying with the
Sustainable agriculture requirements of RSPO due to periodic ‘changing
of goal posts’ with respect to certification criteria.
With the need to implement sustainability in A major point of contention has been that the
the oil palm premises, it is important to look at interests of small and medium producers were not
the United Nations Global Compact Sustainable taken into account during the drafting of the RSPO
Agriculture Business Principles (White Paper, July standard since these groups were not invited for
2013) which was circulated to seek feedback from meetings. On account of this, the ministry has given
the stakeholders on the principles of sustainable the task to MPOB to draft a standard which is to
agriculture and in 2014, the Food and Agriculture be submitted to SIRIM for gazetting as an MS. This
Business Principles was launched. The six MS has been named as the Malaysian Sustainable
principles are as shown below: Palm Oil.

Principle 1: Aim for food security, health and The draft standard was first discussed at the
nutrition; Standard Writing Organisation’s meetings. The
oil palm industry representatives requested that
Principle 2: Be environmentally responsible; the draft be circulated to the whole industry for
comments. The comments subsequently obtained
Principle 3: Ensure economic viability and share from the industry were compiled and the draft was
value; revised based on their comments; and a second
draft of the standard was prepared based on the
Principle 4: Respect human rights, create decent national interpretation of RSPO. A meeting between
work and help communities to thrive; MPOB and the industry was held on the 17 March
2011. At the meeting, two committees were set up.
Principle 5: Encourage good governance and The first was the National Committee (NC) on
accountability; and MSPO which comprised all sectors of the oil palm
industry organisations, related agencies, NGO and
Principle 6: Promote access and transfer of MPOB, while the second was the Technical Working
knowledge, skills and technology. Committee (TWC) which consisted only of the oil
palm industry organisations, MPOB members, and
A sustainability standard for oil palm must agencies related to oil palm industry. The task of the
encompass these six principles in order to ensure NC is to endorse the MSPO documents developed
global acceptance. As a consequence, the Malaysian and the policy-makers for the standard. The task
oil palm industry has to make a paradigm shift of the TWC was to develop and improve the draft
from ‘business as usual’ to a more continuous standards.
improvement approach. This paradigm shift
towards sustainable agriculture may involve a Malaysian Sustainable Palm Oil
radical change in the oil palm industry outlook (MSPO)
on human, social, economic and environmental
responsibility. Profitability is important for the Both the NC and the TWC met regularly since April
development of business but it has to be balanced 2011 to complete the Draft MSPO. The completed
with other responsibilities such as the protection Draft MSPO was submitted to SIRIM and was put
of the environment and enhancing the welfare up on the SIRIM website for public comments. The
of the workers. Therefore, the industry had to Draft MSPO was divided into four parts to address
move rapidly to develop a standard containing the general principles involved and the specific

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principles for smallholders, estates and the mills. parts consist of seven principles, while the fourth
Table 1 shows the sequence of events leading to the part for the mills only contains six principles. The
gazetting of MSPO as the Malaysian Standard. governing principles contain in the four parts are
as follows:
Contents of MSPO
Principle 1: Management commitment and
The four parts of MSPO (Malaysian Standard, responsibilities. A policy is necessary to provide
2013a,b,c,d) are as follows: incentives for the adoption of sustainable
practices. The policy indicates the commitment
a. Malaysian Sustainable Palm Oil (MSPO) Part 1: of the management to implement MSPO. Regular
Guidelines for Malaysian Sustainable Palm Oil. monitoring of the execution of MSPO requirements
under internal audit and management review
b. Malaysian Sustainable Palm Oil (MSPO) is important to detect the weakness in the
Part 2: General principles for independent implementation. New technologies based on
smallholders. research and developments are to be adopted to
ensure efficiency of the operations and better yield.
c. Malaysian Sustainable Palm Oil (MSPO) Part 3:
General principles for oil palm plantations and Principle 2: Transparency. Premises shall provide
organised smallholders. relevant information required under this MSPO
principle in a transparent manner and shall also
d. Malaysian Sustainable Palm Oil (MSPO) Part 4: have transparency during communication and
General principles for palm oil mills. consultation. Traceability is to ensure that the
product can be traced to sustainable raw materials.
The four parts cover the general requirements Records related to business activities and any
of sustainability principles and criteria for the transactions conducted must be updated for
production of certified sustainable palm oil; and are examination by auditors. Records are part of the
applicable to the three sectors in the supply chain, sustainability trail monitored by the auditors.
where most of the best practices are carried out.
The requirements included the development and Principle 3: Compliance to legal requirement.
operation of the three sectors, where the first three The oil palm industry is a highly regulated agro-

Table 1. Timeline of the development of THE Malaysian sustainable palm oil (MSPO)

No. Activities Dates

1. Public comments for the Malaysian Sustainable Palm Oil (MSPO) Part 1: 1 October - 30 November
Guidelines for Malaysian Sustainable Palm Oil 2012
2. Public comments for the Malaysian Sustainable Palm Oil (MSPO) Part 2: 1 February - 31 March 2013
General principles for independent smallholders, Malaysian Sustainable Palm
Oil (MSPO) Part 3: General principles for oil palm plantations and organised
smallholders, and Malaysian Sustainable Palm Oil (MSPO) Part 4: General
principles for palm oil mills

3. Discussion of the public comments on the four parts received and the drafts 2 April 2013
amended based on the comments. The drafts were sent back to SIRIM to be
processed into the Malaysian Standard
4. Meeting ISC U on the Malaysian Standard MSPO. The committee evaluate 13 June 2013
the Draft MSPO and agreed to accept it as the Malaysian Standard with
amendments
5. Draft MSPO was endorsed by the Malaysian Minister of Science, Technology 5 September 2013
and Innovation
6. The Standard, MS2530:2013, was launched during the PIPOC International 19 November 2013
Palm Oil Conference by the Deputy Prime Minister of Malaysia
7. The Minister of Plantation Industries and Commodities (MPIC) announced November 2014
the implementation of MSPO Certification Scheme by the oil palm industry.
With the announcement, the oil palm industry is expected to be certified
sustainably so that palm oil exported from Malaysia is sustainable
8. Several oil palm premises were awarded MSPO certificates -

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Oil Palm Bulletin 71

industry in Malaysia. Premises subscribing to the Malaysian government also introduced several
third Principle of MSPO requirement shall comply land development schemes which provide the poor
with all regulatory requirements, legal land use population with land to grow economic crops.
rights and customary rights.
Principle 5: Environment, natural resources,
Principle 4: Social responsibility, health, safety biodiversity and ecosystem. Environmentalists
and employment condition. One of the elements always consider environment as the most
of sustainability is on social equity and there important element of sustainability. A damaged
should be a positive social impact on people and environment will not help the agriculture crop to
community. Under the United Nations Global thrive, resulting in low yield and thus making
Compact for Sustainable Agriculture, respect for agriculture less profitable. The organisation
human rights is the most important factor when should conscientiously remember the importance
establishing an agribusiness. The producers should of preserving the environment by implementing
respect the rights of the indigenous people and the environmental management programme, efficiency
community surrounding the premises. of energy use and use of renewal energy, waste
management and disposal, reduction of pollution
As such, the organisation should conduct and and emission, natural water resources, status
address social impact assessment, complaints of rare, threatened or endangered species, high
and grievances. The organisation should show biodiversity value area and zero burning practices.
commitment to contribute to local sustainable Under this principle, two issues that concern
developments, ensure employee’s health and safety most of the industry are greenhouse gas and zero
(Figure 1), fair employment conditions and training burning. Haze occurs regularly in the middle of the
to enhance competency of the workers. year due to burning and this is one of the causes of
GHG emissions.
The oil palm industry in Malaysia has actually
played a major role in poverty eradication by Principle 6: Best practices. Profitability is one of the
providing employment and job opportunities elements of sustainability and to ensure continuity
to the surrounding community especially the of the business, the company must implement best
poor population or those with low income. The practices at the premises. Each organisation must
develop best practices to obtain the optimum yield
from their crop harvest. Some of the features of
best practices include site management, economic
and financial viability plan, transparent and fair
pricing deals and also subcontracting of some of
the operations to others.

Principle 7: Development of new plantings. Before

a plantation is conceived, the organisation should
observe the regulations related to land clearing
for new planting. A few assessments need to
be conducted such as environmental impact
assessment (EIA) and social impact assessment
(SIA). Areas which contain high conservation
values and wildlife pathways must be identified.
This is to prevent conflict between human and
wildlife.

Under this principle, issues pertaining to

native population well-being has to be taken into
consideration and addressed accordingly. Some
criteria under this principle include consideration
for areas with high biodiversity values, deep peat
land and planting on steep terrain (Figure 2) and/
or on marginal and fragile soils. The company,
after conducting social and environmental impact
assessments, shall ensure that the planting of
oil palm does not have a negative impact on the
Figure 1. Workers conducting chemical spraying must wear surrounding communities. Soil survey has to be
personal protective equipment (PPE). carried out, appropriate agronomic practices are to

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 Malaysian Sustainable Palm Oil

Application

Stage I Audit

Stakeholder Consultant

Stage II Audit

Draft Report
Figure 2. Avoid planting on steep slope.

MPOB Panel Review

be implemented by the plantation; and customary
land right must demonstrates prior and informed
consent from the stakeholders. Final Report

Each of these seven principles is supported by

criteria and indicators. The criteria and indicators CB Certification Panel
will direct the users on the actions to be taken by
the company to implement MSPO requirements. No
Besides the four parts of MSPO standards, a set of Approved?
guidance has been drawn up with the objective of
ensuring harmonious and credible auditing of the Yes
standard. Certificate Issuance

Certification System
MPOB and Public Notification
With the gazetting of the MS on sustainability, the
oil palm industry can implement the requirements
in the standard at their premises. The level or Annual Surveillance Audit
extend of the implementation needs to be measured
and one of the means to measure is through the
certification system. The premises must ensure that Re-certification (reiteration of steps 4-10)
the main gateway, where crude palm oil is produced
at the mill, has to conform and comply with the
Figure 3. Procedure for the Malaysian Sustainable Palm Oil
principles, criteria and indicators of the standard (MSPO) Certification System based on ISO 17021.
to produce certified sustainable palm oil (CSPO).
to qualify for overall sustainability certification,
based on traceability, as per requirements for that the stakeholder consultation is carried out and
international markets. The system also allows for the report is available during the auditing. This is
individual certification of post-milling operations an important step to prevent conflict between the
and facilities in relation to sustainability. management and the surrounding community.

Certification of the MSPO standard will be Application

conducted by independent certifying bodies
registered with Standard Malaysia which will The auditee is required to submit an application
be identified by MPOB. The certifying bodies to the MSPO Secretariat. The information
must comply with requirements of ISO 17021 submitted will be checked for its authenticity
or other system acceptable universally and before proceeding to the actual auditing. A risk
endorsed by Standard Malaysia. Approximate assessment of the premises will be conducted to
time from application to certification is 8-12 ensure full compliance with the standard MSPO.
months. The procedure for certification is shown
in Figure 3 and the time-frame in Figure 4. The Auditing Procedure
auditing process will be conducted by recognised
competent certification bodies and the companies Once the information in the application form
should follow the procedure in Figure 3 or similar has been authenticated, the MSPO coordinator will
recognised procedure. The auditor has to ensure identify the Certifying Body (CB) to conduct the

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Oil Palm Bulletin 71

Figure 4. Time-frame for the Malaysian Sustainable Palm Oil (MSPO) Certification scheme.

corrective actions undertaken, then the next step is

to do Phase 2 audit. The same steps in Phase 1 are
followed starting from informing the auditee on the
Phase 2 audit until the completion of the corrective
actions. Once the lead auditor is satisfied with the
corrective actions taken, then the draft report will
be submitted to the MPOB Panel Review.

MPOB Panel Review

The panel will evaluate the assessment reports

Figure 5. Auditors from the Certifying Board (CB) checking the based on the evidence submitted by the auditee.
Malaysian Sustainable Palm Oil (MSPO) documents during If the panel in reviewing that the premises
auditing. have complied with the MSPO requirement,
the document is passed to the CB with the
Phase 1 audit (Figure 5). The CB will identify the recommendation to certify the premises.
lead auditor and audit team, who will conduct risk
assessment of the auditee and subsequently initiate Certification Panel of CB
the auditing procedure. The lead auditor will draw
up the Phase 1 audit plan and inform the auditee on The committee will consider each assessment
a suitable date for the audit to take place. Once the report submitted for different premises and will
auditee agreed on the date, the audit plan will be make the final decision to certify the premises.
sent to the auditee and Phase 1 audit will take place
as agreed. All the audit findings will be reported Surveillance Audit
and if there are non-compliances observed, the
auditee has to take corrective action to ensure Annual surveillance will be conducted within
compliance. Once the lead auditor accepted the 12 months but not sooner than nine months.

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 Malaysian Sustainable Palm Oil

Re-certification Audit enable buyers of CSPO to make better purchase

decisions and invoke better appreciation and
The audit will be carried out in the fifth year of higher awareness among them with respect to
certification, i.e. six months before the expiry of the the stringent requirements laid out by MS and
certificate. the genuine efforts made by all contributors and
Traceability suppliers along the supply chain.

The MS provides guidance for quantifying, All these impacts will further strengthen and
communicating and verifying the sustainability entrench the competitive position of the Malaysian
criteria of MSPO. It requires a defined goal and palm oil in international markets as a sustainably-
scope from the auditee for producing MSPO or produced premium oil of the highest quality.
CSPO. The MSPO will provide transparently the
following benefits to companies, public bodies, Acknowledgement
consumers, industry and regulatory bodies with
the consistency, flexibility and accountability for We would like to thank Dr K Ramadasan for his
quantification and communication of the actual effort in editing this manuscript.
audits undertaken. The transparency requirement
throughout will enable the interested/involved ReferenceS
parties to perceive the relevance and applicability
of the MS for different sectors and geographical Malaysian Standard (2013a). MS2530 -
areas in compliance to the requirements. The 1:2013 - Malaysian Sustainable Palm Oil (MSPO) Part
different phases viz., 1, 2 and surveillance 1: Guidelines for Malaysian Sustainable Palm Oil.
facilitate the continuous monitoring of the
sustainable production of palm oil in reducing the Malaysian Standard (2013b). MS2530 -
environmental impact, including GHG emissions, 2:2013 - Malaysian Sustainable Palm Oil (MSPO) Part
thereby ensuring continuous improvement within 2: General principles for independent smallholders.
each sector. Tracking of MSPO certified oil will be
based on the traceability system comprising mass Malaysian Standard (2013c). MS2530 -
balance and segregation. Transparent performance 3:2013 - Malaysian Sustainable Palm Oil (MSPO)
tracking and progress performance reporting Part 3: General principles for oil palm plantations and
during the actual certification and surveillance organised smallholders.
period will enable an effective tracing of the sources
sustainable raw material, this also attest to the total Malaysian Standard (2013d). MS2530 -
credibility of MSPO. 4:2013 - Malaysian Sustainable Palm Oil (MSPO) Part
4: General principles for palm oil mills.
Conclusion
UNITED NATIONS (2013a). Global Compact
On implementation, the MS - the basis of Sustainable Agriculture Business Principles (White
MSPO - will eliminate confusion with respect to Paper, July 2013).
sustainability requirements. It will allow players
and contributors along the supply chain to use the UNITED NATIONS (2013b). Full Report of the Open
reference methodology in the MS to significantly Working Group of the General Assembly on Sustainable
reduce adverse environmental impacts. It will also Development Goals, Document A/68/970.