ASA Adjudication on Malaysia Palm Oil Council

Ad

A magazine ad, for Malaysian Palm Oil. The headline stated: "Palm Oil: The Green Answer". Under this was the text: "Palm oil is the only product able to sustainably and efficiently meet a large portion of the world's increasing demand for oil crop-based consumer goods, foodstuffs and biofuel … Malaysia's forest cover is certain to be maintained." Further text stated "With the increased attention paid to oil crops, and oil palm in particular, a number of criticisms have been levelled at Malaysia's palm oil industry, from accusations of rampant deforestation and unsound environmental practices to unfair treatment of farmers and indigenous people. These allegations - protectionist agendas hidden under a thin veneer of environmental concern - are based neither on scientific evidence, nor, for that matter, on fact. … The industry's practices are held to high environmental standards, and the Malaysian Palm Oil Association (MPOA), is a founding party to the Roundtable on Sustainable Palm Oil (RSPO), which defines standards and monitoring criteria for the sustainable production and use of palm oil … In addition to its green credentials, Malaysia's palm oil industry also plays an important role in the industrialisation of the country and the alleviation of poverty, especially amongst rural populations."

Issue

Friends of the Earth and two complainants challenged whether:

1. the claim "Palm Oil: The Green Answer [...] Palm oil is the only product able to sustainably and efficiently meet a large portion of the world's increasing demand for oil crop-based consumer goods, foodstuffs and biofuels" was misleading and could be substantiated;

2. the claim "a number of criticisms have been levelled at Malaysia's palm oil industry, from accusations of rampant deforestation and unsound environmental practices to unfair treatment of farmers and indigenous people.  These allegations - protectionist agendas hidden under a thin veneer of environmental concern - are based neither on scientific evidence, nor, for that matter, on fact" could be substantiated.

3.  Friends of the Earth challenged whether the claim "The industrys practices are held to high environmental standards, and the Malaysian Palm Oil Association (MPOA), is a founding party to the Roundtable on Sustainable Palm Oil (RSPO), which defines standards and monitoring criteria for the sustainable production and use of palm oil" misleadingly implied that all Malaysian palm oil adhered to the RSPO standard.

4.  Friends of the Earth also challenged whether the claim "In addition to its green credentials, Malaysias palm oil industry also plays an important role in the industrialisation of the country and the alleviation of poverty, especially amongst rural populations" could be substantiated.

CAP Code (Edition 11)

Response

1.  Malaysia Palm Oil Council (MPOC) argued that the ad did not state that MPOC was sustainable but rather that members of the organisation Malaysian Palm Oil Association (MPOA) were seeking certification. They said some large companies within Malaysia had received that.  They contended that the ad did not claim that all Malaysian palm oil had RSPO certification or that it was sustainable and pointed out that the claim was phrased conditionally and stated palm oil was "able" to produce oil in an efficient and sustainable manner. They believed this was a statement of capability rather than an absolute fact.  

MPOC stated that palm oil was able to meet the growing demand for oil in an efficient manner. Palm oil required 0.26 hectares if land to produce one tonne of oil whilst soybean, a similar product, required 2.49 hectares.  Furthermore, MPOC argued that the cultivation process for palm oil required less fertilizer and energy and it was this reduced input which they considered made palm oil a sustainable product.  MPOC said palm oil could be produced sustainably and was an effective crop for planting in land which is already cleared or degraded.  

2. MPOC clarified that the reference to "protectionist agendas", "thin veneer[s] of environmentalism" and restricted trade were primarily levelled toward the European Unions (EU's) proposed Directive on the promotion of the use of energy from renewable sources.  They believed this criticism of the Directive was shared by countries such as Brazil, Indonesia and Argentina who felt the proposals would restrict imports resulting in a detrimental impact on their industry that they believed was discriminatory and protectionist.  MPOC said, if the Directive was adopted they would, along with other countries, raise their concerns with the World Trade Organisation because they believed it breached the General Agreement on Tariffs and Trade, which specified that imported products should be treated equally to domestic products.

MPOC argued that accusations that the production of palm oil would cause "rampant deforestation" or be actioned using "unsound environmental practices" were not justified by scientific fact and, again, were a veneer for protectionism.  They cited the websites of Non-governmental organisations including Friends of the Earth (FoE) who made these allegations.  MPOC stated that 63% of Malaysia was forested and  national law stipulated that palm oil could only be planted in 19% of the country  designated for agricultural production.  MPOC said the ad did not state that the production of palm oil did not use environmentally detrimental practices or cause deforestation, but rather that the allegations themselves were unfounded.  

3.  MPOC argued that the ad did not claim that all palm oil in Malaysia adhered to the RSPO standard but rather stated that the industry were held to high environmental standards and that the body which represented the industry, the MPOA, was a member of the RSPO.  

4. MPOC stated that the palm oil industry employed one million people, which amounted to 9.3% of jobs in Malaysia, and that the production of the crop helped the country develop from its dependence on rubber and tin mining.  MPOS believed that, in developing rural communities, poverty was concentrated amongst those without land and the Malaysian resettlement agency (FELDA) sought to alleviate this by giving rural farmers land to grow crops such as cocoa, rubber and oil as a form of subsistence.  The FELDA scheme created livelihoods for 112,000 families which MPOC believed would have otherwise remained poor and offered a tangible benefit to Malaysia.

Assessment

1.  Upheld

The ASA noted the ad stated "Palm Oil: The Green Answer ... Palm oil is the only product able to sustainably and efficiently meet a large portion of the world's increasing demand for oil".  Whilst we acknowledged MPOCs argument that the claim only affirmed that palm oil was "able" to be produced sustainably and was not intended to be an absolute claim, we noted that the ad went on to state palm oil was "the most efficient and sustainable" means of production.   We considered that, in conjunction with claims such as "puts minimal strain on the environment", readers would infer from the claim that palm oil was sustainable and would not have an adverse effect on the environment.  

Although we acknowledged that some Malaysian palm oil companies had sought certification from the RSPO, we understood that the scheme and the certification of biofuels in general was still the subject of debate.  We acknowledged FoEs and the public complainants concern that palm oil production resulted in green house gas emissions and deforestation and that the effects on the environment were contentious and, as yet, difficult to measure.  We noted a previous ASA investigation into a similar claim made by MPOC concluded that "palm oil production in Malaysia was subject to public and scientific debate and ... the claim 'sustainable' was likely to mislead"; we also noted the Department for Environment, Food and Rural Affairs Green Claims Code stated the term "sustainable" should be avoided. We were concerned that MPOC had repeated the claim "sustainable" and concluded that, because there remained concerns about the indirect effects of biofuels and MPOC could not substantiate that palm oil could be wholly sustainable, the claim was likely to mislead.

On this point the ad breached 3.1 and 3.2 (Substantiation), 7.1 (Truthfulness) and 49.1, 49.2 and 49.3 (Environmental claims).

2. Upheld

We understood that MPOC were referring to the proposed EU Directive on the promotion of the use of energy from renewable sources, which they believed included policies that were protectionist.  We also noted that, since the ads publication, the Directive had come into force.  We considered that readers were likely to interpret the claim that criticisms levelled against MPOC were "based neither on scientific evidence, nor, for that matter, on fact" as implying that all criticisms were without a valid or scientific basis.  We considered the refutation of these criticisms would also, conversely, be interpreted by readers as a statement that production of palm oil would not result in deforestation or be conducted using practices detrimental to the environment, which MPOC were not able to substantiate.  We noted MPOCs assertion that Malaysian national law stipulated that only 19% of land for agricultural production could be used to product palm oil;  nevertheless, FoE contended that despite its illegality, deforestation and the open burning of peat, which was in their view an unsound environmental practice, was still occurring. We understood there was a significant division of informed opinion about the impact of biofuel production and concluded that, because MPOC did not make clear which particular criticisms it was disputing and did not provide robust substantiation to support the claim, it was likely to mislead.

On this point the ad breached 3.1 and 3.2 (Substantiation) and 7.1 (Truthfulness).

3. Upheld

We considered that, in conjunction with the claim "the Malaysian Palm Oil Association (MPOA), is a founding party to the Roundtable on Sustainable Palm Oil (RSPO), which defines standards and monitoring criteria for the sustainable production and use of palm oil" and in the absence of sufficient qualification, readers were likely to infer that all palm oil was produced to the RSPO standard when that was not the case.  We concluded that the claim was likely to mislead.

On this point the ad breached 3.1 and 3.2 (Substantiation), 7.1 (Truthfulness) and 49.1, 49.2 and 49.3 (Environmental claims).

4. Upheld

We understood that palm oil had played a role in the development of the Malaysian economy in its shift from reliance on rubber and tin mining and acknowledged MPOCs assertion that this created one million jobs.  We also understood that the FELDA scheme encouraged farmers to grow crops, including palm oil, which MPOC believed would have a pronounced effect amongst rural communities.  However, FoE contended that palm oil also created a number of adverse social impacts, in particular to displaced peoples and indigenous communities, who they believed were affected by deforestation and changes in land use.  They also claimed that issues such as housing and land rights, low wages and poor treatment compromised MPOCs claim that palm oil had a societal benefit.

We noted that the Gallagher Review considered the production of biofuels could also have adverse social effects including a rise in food prices. The report stated "Shorter-term effects on the poor are likely to be significantly greater and require interventions by governments to alleviate effects upon the most vulnerable."  We understood that there was not a consensus on the economic impact of palm oil on local communities and, because the ad claimed that palm oil contributed to the alleviation of poverty in broad, generic terms which could not be substantiated, the claim was likely to mislead.  

On this point the ad breached 3.1 and 3.2 (Substantiation) and 7.1 (Truthfulness).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)