HomeMMBIZ NewsSustainable Palm Oil in Myanmar Could Access Premium Markets

Sustainable Palm Oil in Myanmar Could Access Premium Markets

Adoption of sustainable palm oil production principles could provide Myanmar’s palm oil sector with direly needed capital, investment and technology, helping the industry gaining access to premium markets, stakeholders told a workshop.

The workshop, co-hosted by British nature conservation group Fauna & Flora International Myanmar and the Union of Myanmar Federation of Chambers of Commerce Industry (UMFCCI), discussed the sustainable development of Myanmar’s plantations with a focus on the burgeoning palm oil sector.

FFI Myanmar’s Director Frank Momberg said: “Plantation crops play a critical role in Myanmar’s national development strategy and are a potential source of significant benefits.

“However, the social and environmental impacts of the plantation sector, particularly palm oil, have drawn criticism throughout Southeast Asia.”

He said the introduction and promotion of sustainable practices in plantation development can help maximise economic, social and environmental benefits and secure future access to international markets and finance, which is increasingly linked to sound social and environmental practices. 

The workshop, funded by the European Union, included key stakeholders from plantation companies, government agencies, and civil society organisations, which worked together to introduce principles and best practices of sustainable palm oil production.

"Through this project, the EU intends to support Myanmar in protecting its most important biodiversity sites.

“The workshop provides the opportunity to further discuss ways of making business differently in Myanmar, and ensuring economic activities are developed in an environmentally sustainable and socially inclusive way,” Roland Kobia, European Union Ambassador to Myanmar, said.

Myanmar’s southern Tanintharyi Region is the only area where soil and climate conditions allow for growing oil palm in the country. To date, over 140,000 hectares of oil palm have been planted and 400,000 hectares allocated to 44 national companies.

Gary Paoli, an expert in sustainability from Daemeter Consulting, with experience in the Indonesian palm oil sector, said Myanmar is in the early stages of palm oil expansion and in the “very fortunate position” to learn from other countries to avoid their mistakes.

Darrel Webber, secretary general of the Roundtable on Sustainable Palm Oil (RSPO), in his keynote speech said sustainable palm oil is “legal, environmentally appropriate, socially acceptable and profitable.”

The RSPO is a global multi-stakeholder organisation and certification scheme and has members from around the world who voluntarily commit to transform the market to make sustainable palm oil the norm. Members are from the global supply chain of palm oil producers, processers, traders, retailers, manufacturers, banks, investors, and environmental and social NGOs.

The government’s motivation to promote the sector has been to meet domestic demand for cooking oil and reduce reliance on expensive palm oil imports.

However, as agro-climatic conditions in Tanintharyi are marginal, and Myanmar’s companies have difficulties accessing capital, know-how and technology, as well as having to rely on poor infrastructure, yields have been far below those of Malaysian or Indonesian growers.

The forests of Tanintharyi are one of Myanmar’s most important biodiversity areas with 2 million hectares of intact lowland rainforest, a unique forest type limited to the very south of Myanmar, and home to globally threatened animals such as tigers, leopards, elephants, tapir, and gurney’s pitta, which is a colourful ground-dwelling bird found nowhere else in the world.

It has been proposed to add both Tanintharyi National Parkand Lenya National Parkto Myanmar’s tentative list of World Heritage Sites due to their outstanding integrity and global biodiversity values.

[The map shows overlap between planned plantations in particular in Lenya proposed National Park, which is critical for biodiversity conservation, whereas areas suitable for oil palm is actually only the coastal zone with sufficient rainfall.]

“Land clearing for palm oil and rubber plantation has been the driving force of deforestation and loss of biodiversity in Tanintharyi,” Momberg said.

However, a land suitability study for palm oil presented by FFI during the workshop shows that there is “no need for a conflict between plantation development and biodiversity conservation,” since most bio-diverse forests are located inland along the Myanmar–Thailand border, an area marginal at best for growing palm oil because rain fall is lower and the dry season more pronounced than in the coastal region, he added.

Not only are the agro-climatic conditions better in the coastal zone, but there is road access along the Kawthoung–Myeik road, with plenty of degraded lands throughout the road corridor due to past logging operations.

“Since potential conflicts of interest are low, the Ministry of Environmental Conservation and Forestry and the Tanintharyi regional government can go ahead and designate Tanintharyi and Lenya proposed National Parks, creating a globally outstanding trans-boundary cluster of World Heritage Sites together with KaengKrachen National Park in Thailand,” Momberg said.

Stakeholders concluded that win–win solutions for conservation and plantation development can be found through active engagement of all key stakeholders, including private sector, government, and civil society organisations, to adopt the RSPO principles to foster environmental friendly land use planning, and move towards best practices in palm oil plantation management and expansion.

They agreed that RSPO certification could provide significant economic benefits and access to premium markets especially for certified kernel oil. The adoption of RSPO principles for sustainable palm oil, as required by most international banks and investors, could provide Myanmar’s palm oil sector with access to urgently needed financing and technology.

They also agreed to establish a sustainable palm oil “learning group” that would facilitate stakeholder dialogue, education and capacity building for sustainableproduction, and pilot the development of a sustainable oil palm plantation based on RSPO principles on a voluntary basis.

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