In our second part of the editorial series from the interview with the Netherland’s Ambassador to Malaysia The Honourable Jacques Werner, we expand our topic of discussions to the European Union.
As a Member State, the Netherlands helps develop EU legislation. The country is also closely involved in developments within the Union, such as economic reforms and the accession of new member states, being an important member of the EU, we had some important areas that needed to be addressed which Malaysia is finding hard to break through.
Among the biggest area that Malaysia has been in contention with the European block is on the new policy passed by the council on deforestation, under the regulations, palm oil-based fuels can no longer be considered as renewable transport fuel and are to be phased out by 2030, as the EU has determined that palm oil cultivation leads to excessive deforestation. In order to be able to export to the EU, the palm based products require stringent certification to proof they were not cultivated in the expense of destroying forests or habitats.
Being the second largest exporter of palm oil in the world, the EUDR can have a big impact on Malaysia and many of its planters including small farmers.
BusinessToday highlighted the significance of the regulations and delved further with the ambassador on the matter.
According to Werner, the Government of Malaysia, the Government of the Netherlands, and the Government of the United Kingdom will jointly collaborate on the National Initiatives for Sustainable and Climate Smart Oil Palm Smallholders 2 (NI-SCOPS 2) for the next five years, to foster better understanding and formalise cooperation between the three countries on the sustainable production and consumption of palm oil.
NL and UK will invest RM43 million into this project. What is NI-SCOPS (NI-SCOPS 1)? The National Initiatives for Sustainable and Climate-Smart Oil Palm Smallholders (NI-SCOPS) is a Dutch government supported, public private partnership programme, initiated in 2019 and focused on Indonesia, Malaysia, Nigeria and Ghana. It works in close collaboration with those countries’ governments, through jointly negotiated, government to government agreements. With the aim to demonstrate that the palm oil sector can contribute to the SDGs and Paris Agreement climate ambitions, while improving the livelihoods of smallholder farmers and workers.
The ambassador said the NI-SCOPS focuses on landscapes with large numbers of independent smallholders and mills, which are unlikely to be able to get certified. The aim is that these palm oil-producing areas, or landscapes, will become more economically robust and socially just, while protecting and restoring valuable natural resources, leading to a reduction of greenhouse gas (GHG) emissions from agriculture and land-use change.
NI-SCOPS works with these smallholders and mills, strengthening existing partnerships, and building new ones, with the close support of national and subnational governments, reporting transparently on progress in each country.
The EU has since accepted a single nationally definition for deforestation-free oil palm smallholding in July 2021. So far, 11,297 producers have been trained in climate resilient & sustainable production and income diversification at field level.
And 728 smallholders have been surveyed in comprehensive baseline study in 2022 in Johor, Perak, Sabah, and Sarawak- covering production practices, labour, yield gaps, livelihood vulnerability, awareness of climate change and certification.
A Deforestation Task Force was also initiated in 2022, to develop the deforestation monitoring system by benchmarking existing state and federal mechanisms.
As we move away from palm oil, the other elephant in the room that needed to be brought up was the long on hold Free Trade Agreement with EU which Malaysia has been putting-off. However as of writing, Prime Minister Datuk Seri Anwar Ibrahim who just returned from his official working visit to Germany has informed that Malaysia will revisit the FTA and will likely to proceed.
Werner during the interview said since the Netherlands and Malaysia are already serving as regional gateways, an FTA would give a great boost to trade relation. He noted that most countries in the region already have an FTA, like Vietnam, Singapore. Other countries in the region are in negotiation; Philippines and Thailand. Without an FTA Malaysia will lose out comparatively to its neighbouring countries
Geopolitical and China
The EU has been cozying up with China to the chagrin of United States, would this play up into a different dynamics in coming years?
To this the ambassador added that the geopolitical and geo-economic balance of power is shifting rapidly. The importance of the Indo-Pacific region is growing. To adequately promote Dutch and other European economic and political interests there – the world’s primary growth region – the Netherlands and the EU need to step up their efforts in the Indo-Pacific and develop a distinctive Dutch and EU vision of the region.
A good example he said was how NL works together on this with MAL is the semicon sector.
The Netherlands and the EU will benefit from closer cooperation – both bilaterally and through the EU – with the countries in the region, and especially with like-minded democracies and countries with open market economies. Like the Netherlands, these countries are committed to effective multilateralism and recognise that a properly functioning international legal order is in their interests.
But will the Trump change perceptions of USA? Werner says “NL, EU and the US are strong allies. We work together intensively in terms of international cooperation, security, and trade. NL will remain to work together closely with the US, regardless of who is in the White House“
The EU itself is also facing tasks this year, with elections for the European Parliament in 6-9 June 2024, there will also be the adoption of a new EU strategic agenda 2024-2029 (adoption expected June 2024) that tackles topics such as green and digital transitions, energy and global engagement. As trading nations, Malaysia need to look our for the new policies which is to be expected probably in 2025.
