KL plans to file WTO case against EU over palm oil curbs

KUALA LUMPUR • Malaysia is planning to file a World Trade Organisation (WTO) case this year against the European Union over its restrictions on palm oil biofuel, Deputy Plantation Industries and Commodities Minister Willie Mongin said yesterday.

"Malaysia is adamant and steadfast in taking legal action against the EU on its discrimination towards Malaysian palm oil," he said during an online conference.

Malaysia is the world's second-largest palm oil producer and exporter.

The Malaysian Palm Oil Association (MPOA) said yesterday separately that it is losing up to 25 per cent of its potential palm oil yield due to a labour shortage that is expected to worsen in the coming months.

The group, which represents plantation firms, said the government's decision to freeze the recruitment of new foreign workers until December could lead to the "demise" of the industry.

"Pre-Covid, we were already short of 36,000 workers. This (shortage) has already resulted in us not realising our potential production by 10 to 25 per cent," MPOA chief executive officer Nageeb Wahab said in a conference.

Malaysia relies heavily on workers from countries such as Indonesia and Bangladesh as they account for 84 per cent of its plantation workforce.

Thousands have already left palm estates for home as borders closed amid the pandemic, and the group said it had not been able to replace those who had left.

A dearth of workers could delay palm fruit harvesting and curb oil output, especially ahead of the peak production season that starts around September.

Mr Nageeb said plantation companies were actively hiring locals in support of the government's policy, but locals were not interested in what they see as dirty, dangerous, difficult and demeaning work.

"If this (local recruitment effort) fails, we will need the government to help us," he added.

UNREALISED POTENTIAL

Pre-Covid, we were already short of 36,000 workers. This (shortage) has already resulted in us not realising our potential production by 10 to 25 per cent.

MR NAGEEB WAHAB, chief executive officer of the Malaysian Palm Oil Association, on the industry's labour woes.

Mr Willie said the ministry was in talks with industry groups to address the labour concerns.

"We will discuss and formulate a strategy to address labour shortage issue," he said during the conference.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 21, 2020, with the headline 'KL plans to file WTO case against EU over palm oil curbs'. Print Edition | Subscribe