When Malaysia announced an aggressive goal of certifying 100% of its palm oil as sustainable by the end of 2019, some may have thought it to be insurmountable. While Malaysian oil palm plantations have traditionally followed sustainability practices for hundreds of years, the Malaysian Sustainable Palm Oil (MSPO) certification process is stringent and very thorough. 

Yet as of October 31, 2019, 60% of total oil palm planted areas had been certified. That number includes more than 82,676 hectares operated by independent family farmers (smallholders) and more than 3.3 million hectares operated by plantations and organized smallholders. A total of 328 of the 448 mills operating in Malaysia have been certified. To keep the momentum going, the government has announced plans to revoke oil licenses of oil palm growers above 100 acres, if they are not in compliance with MSPO beginning in 2020. 

MSPO has two types of certifications: Oil Palm Management Certification and Supply Chain Certification

  • Oil Palm Management Certification: This is a process that sets the standards for responsible management of palm oil plantations, smallholdings and palm oil processing facilities. The certification process is run by an accredited third party certification body to assess and verify that the oil palm management is in compliance with the standards’ requirements as prescribed in the MSPO standards.
  • Supply Chain Certification: Supply chain certification applies to parties (mainly companies) who process, trade or manufacture palm oil from certified oil palm management units. It shows the link of the palm oil (product) from the mill to the final product, keeping certified palm oil product separated from its uncertified counterpart, thus ensuring the value of certification right through the value chain to the customer.

MSPO certification addresses the environmental, social and economic aspects of palm oil production. It also documents the importance of balancing these aspects for the good of all involved. Its standards cover seven areas: 

  1. Management commitment and responsibility
  2. Transparency
  3. Compliance to legal requirements
  4. Social responsibility, safety and employment conditions
  5. Environment, natural resources, biodiversity and ecosystem services
  6. Best practices
  7. Development of new plantings

The multi-step procedure for MSPO certification includes both audits and peer reviews. These assure that best practices are consistently being followed. MSPO is administered through the independent Malaysian Palm Oil Certification Council.

Additionally, the Malaysian palm oil industry is governed by more than 60 national laws and regulations including the stringent licensing requirements by Malaysian Palm Oil Board’s licensing categories throughout the palm oil industry’s supply chain.