A Review of Key Sustainability Issues in Malaysian Palm Oil Industry

Abstract

The palm oil industry has contributed enormously to the economic growth of developing countries in the tropics, including Malaysia. Despite the industry being a development tool for emerging economies, the oil palm crop is inundated with allegations of its unsustainable plantation practices and viewed as environmentally detrimental and socially adverse. These negative perceptions are amplified through anti-palm oil campaigns and protectionist trade regulations in developed countries, particularly in the European Union (EU). This situation, if further exacerbated, could potentially affect the export of palm oil and the industry as a whole. As such, this article provides a critical review of the key sustainability issues faced by the Malaysian palm oil industry as the second biggest exporter of palm oil to the global market. The various insights and the interpretations of sustainability are contested according to the contexts and the interests of the countries involved. Hence, palm oil is constantly exposed to bias masked by non-tariff barriers from consumer countries to protect their domestically produced vegetable oils. This could constrain the commodity competitiveness in the international market. As issues on palm oil sustainability continue to evolve, policymakers at key stakeholder agencies need to devise strategies to manage global disruption in the palm oil trade.

1. Introduction

The rapid growth in the world population and the increase in demand for renewable energy, particularly towards mitigating greenhouse gas (GHG) emissions, have resulted in the rise in demand for oilseeds. This situation has contributed towards the expansion of oilseed cultivation, especially oil palm, in the tropical producing countries. As one of the major exporters of palm oil, Malaysia’s oil palm plantation area reached 5.87 million hectares, which supplied 34.3% of the total palm oil trade and constituted 18.3% (17.37 million tonnes) of the global oils and fats industry last year [1]. With the anticipated increase in the global population to nine billion by 2050, the demand for oils and fats is expected to reach 35 million tonnes annually [2]. In addition to food, new uses of palm oil, such as for industrial applications and biodiesel, have further strengthened the demand to cultivate more oil palm.

However, as the total land area available is fixed it means that more crops have to be produced within the same area. In order to fully optimize land usage for oil palm crops, palm oil research has been focused on sustainable plantation and development. Despite various efforts made in research advancements and sustainable practices, oil palm cultivation has been exposed to increasing controversy and scrutiny over the years. The oilseed crop has been associated with environmental degradation, such as peatland conversion, tropical rainforest deforestation, loss of biodiversity, reduced carbon sink source, flood regulator, and the carbon footprint [3,4,5,6,7]. The industry has also been plagued with social issues, such as the violation of human rights, the rise in crime, the influx of foreign labor, conflicts over land rights, labor management, and the displacement of local and indigenous communities [8,9,10]. Moreover, concerns over the safety and the quality of palm oil contaminants, such as 3-monochloropropane-1,2-diol (3-MCPD) and glycidyl esters (GE) in the food sector have continued to be present over the past decade [11,12].

These negative perceptions have created concerns about the sustainability of the commodity, especially in the developed economies such as the European market. The European Union (EU) established certified and sustainable palm oil standards as part of its importation requirements, which started in 2015, for a completely sustainable palm oil supply chain in Europe by 2020 [13]. Furthermore, the European Parliament agreed that the main criteria for biodiesel are set for no deforestation and voted to ban biodiesels from palm oil beginning in 2021 and to completely phase them out by 2030 in adherence to the EU Renewable Energy Directive (RED) II [14,15]. In addition to the restriction of palm oil-based biodiesel, the European Commission (EC) implemented the maximum limits on 3-monochloropropane-1,2-diol esters (3-MCPDE) and GE in edible oils and fats in January 2021 and March 2018, respectively [16]. Apart from these interventions, non-governmental organizations (NGOs) and consumers advocate boycotting palm oil through palm oil-free campaigns, while private companies promote the use of certified and sustainably produced palm oil through labels on their products [17,18]. The imposed restrictions and the increase in public awareness could suppress the utilization of palm oil in the transportation and food sectors in Europe. It may jeopardize the market share of Malaysian palm oil in the European oils and fats sector if palm oil is continuously viewed as unsustainably produced.

Therefore, there is growing pressure on exporting countries such as Malaysia to meet the sustainable production and development standards in the palm oil supply chain in order to trade in the European market. The formation of the Roundtable of Sustainable Palm Oil (RSPO) in 2004 as a reliable global standard for certified and sustainable palm oil (CSPO) enabled the palm oil industry players to demonstrate commitment towards sustainable development [19]. In 2015, the Malaysian Sustainable Palm Oil (MSPO) was developed as a national standard to monitor the development of the sustainable palm oil sector, and compliance to the standard was made compulsory by 31 December 2019 [20]. These certification standards indicate the importance of responsible practices from the environmental, social, and safety perspectives. The principles and criteria in the standards require involvement from multi-stakeholder agencies to discuss sustainability issues from a policy formulation perspective in order to stay competitive internationally.

Hence, the purpose of this article is to provide a critical review of the numerous academic articles that have been written about sustainability issues in the palm oil industry. By elucidating the discourse on palm oil concerning key sustainability issues, this paper aims to bridge the gap between the issues of the misconceptions, the allegations, and the realities of palm oil. The critical review also intends to contribute intelligibility and coherently to the existing body of knowledge in the palm oil sector. This is important as policymakers could use the information at governmental agencies to develop effective sustainable palm oil strategies, and academicians and researchers could use it for further studies in the field.

The article is structured based on environmental, social, economic, and health sustainability themes. The sub-section on environmental sustainability examines the environmental challenges to Malaysia’s palm oil industry and the actions taken by the Malaysian authorities to counter them. The social sustainability sub-section highlights how the palm oil industry has contributed to the social wellbeing of the local people and how the negative campaigning by international agencies is harming the industry and the people. In the economic sustainability sub-section, the article shows the palm oil industry’s contribution to Malaysia’s economy and the actions taken to reduce the carbon footprint and meet the high standards of the global market. In the health sustainability sub-section, issues such as the health problems resulting from the haze, forest fires, and slash-and-burn farming techniques are addressed. It also discusses issues related to nutritional value and the association with diseases. In the Section 4, the authors discuss the international dynamics that hamper the palm oil industry and the issues surrounding Sustainable Development Goals (SDGs). The Section 5 summarizes the findings and provides recommendations to policymakers.

2. Materials and Methods

This review article investigates the sustainability issues of the palm oil industry in Malaysia. By using a macro-approach to examine the sustainability of the commodity, the article discusses the development of the palm oil industry at the international and national levels. The article consists of critically reviewed sources ranging from academic books, scholarly journals, proceeding papers, and reports from the leading researchers and academicians in oil palm studies. The data reviewed in this article was obtained from the international and national agencies involved in palm oil sustainability in order to present the most current developments. Among the data sources are the Amsterdam Declaration from the EU, the Report on the Status of Production Expansion from the European Commission, and background information from the RSPO, as well as oil palm statistics and development from the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Council (MPOC). Collectively, the literature reviewed provides the insight to explore the complexity inherent in the palm oil sector with the aim of achieving sustainable development.

As a measure to discuss the latest progress in the industry, this article examines the literature published in the past two decades, between the years 2000 and 2021. The searching process was conducted in the Scopus database using five main keywords: palm oil, sustainability, trade, European Union, and stakeholder agencies. From the literature review, four main themes in palm oil sustainability are identified for review. The themes are based on the environmental, social, economic, and health perspectives. With the exclusion of health, the other themes are in conformance with the three pillars of sustainable development by the United Nations’ SDGs.

Throughout the article, priority has been given to the findings and discussions from scholarly literature to ensure the reliability and validity of this review. However, news articles were reviewed to obtain information on the latest governmental policies and actions that have yet to be academically investigated. Careful consideration was taken to ensure the accuracy of these news articles by counterchecking with other related media releases.

3. Results

As a highly contested oilseed crop, palm oil dominates the discussion on sustainability compared to other vegetables in the oils and fats sector. The exchange of information on this commodity has been prevalent among palm oil-producing countries, palm oil-consuming countries, NGOs, traders, manufacturers, growers, processing and milling facilities, associations, consumers, and policymakers in the past decades. The findings of these discourses can potentially affect the supply chain and the trade in palm oil and its products as they may influence the policymaking processes made by stakeholder agencies. The complexity of palm oil poses a challenge to policymakers to increase the yield produced in each hectare of agricultural land to optimize its socio-economic benefits while reducing the detrimental impacts on the environment. Hence, policy formulation that underpins sustainable development of the palm oil industry needs to balance between environmental, social, and economic stances [21].

The following four sub-sections highlight the issues of palm oil sustainability based on the environmental, social, economic, and health perspectives.

3.1. Environmental Sustainability

The categorization of palm oil-based biodiesel as a renewable energy source has strengthened palm oil exports to Europe. Since 2000, the EU countries have increased their total use of palm oil by 63% and by the year 2017, 87% of palm oil imports were used to produce biodiesel [20,22]. As the third-biggest importer of palm oil after India and China, Malaysian palm oil exports to the EU increased by 9.5% from 1.91 million tonnes in 2018 to 2.09 million tonnes in 2019 [23,24]. The imported palm oil is used as a substitute for soybean oil as the main feedstock for biodiesel production [17]. Although the EU uses the term biofuel to describe the blending of renewable resources with fossil fuel, palm oil is exported as a feedstock to produce biodiesel due to its compatibility with diesel.

Amid countries expanding their oil palm plantations to meet growing market demands, the EU implemented RED-2009/28/EC, which mandates a binding target of a 10% share of biofuel as a transport fuel by 2020 [25]. The inclusion of biofuel in the regional bloc energy mix aims to reduce GHG emissions, improve energy security and protect domestic farmers’ revenue. As stated in Article 17, biofuel products must be environmentally friendly and sustainable to decrease GHG emissions by at least 35% compared to fossil fuels [26]. Nevertheless, the biofuel policy as stipulated in RED has generated criticism from member states since its inception [27].

As a measure to increase the sustainability criteria to take into account member-state grievances, the resolution to eliminate palm oil in biofuel starting in the year 2021 was made a part of the EU RED II renewed policy framework. Palm oil has been classified as a high Indirect Land Use Change (ILUC) risk biofuel, whereby an increase in the demand for palm oil will lead to the indirect conversion of forest into land for biodiesel feedstock to meet the raw materials required for the European market and hence will be phased out by 2030 [17]. Moreover, the risk in ILUC needs to be assuaged as the GHG savings are set at 65% and would impact the GHG balance of biofuels, if unaddressed [28]. Classifying palm oil for biofuel as unsustainable will not be factored into the EU renewable energy target as it is not considered green fuel. Therefore, it is evident that palm oil is specifically targeted due to its high ILUC risk.

The regulation serves the dual purpose of protecting the industry players of domestically produced vegetable oil by using regulatory barriers towards palm oil while adhering to the euro-centric notion of sustainable development. The plan “… to take measures to phase out the use of vegetable oil that drive deforestation, including palm oil, as a component of biofuel, preferably by 2020”, and the plan that “… recommends finding and promoting more sustainable alternatives for biofuel uses, such as European oil produced from domestically cultivated rape and sunflower seeds” reveal that palm oil is specifically mentioned in the resolution [29] (p. 9). The unwarranted attention has translated into discriminatory action that could impede the export of palm oil into the EU market and has tainted the reputation and acceptance of palm oil and its products internationally. Moreover, there is contention regarding ILUC as defining the criteria for land conversion as it reflects the European perspective rather than an internationally accepted view on environmental issues [30]. The debate on sustainable palm oil is also perceived as an enforcement of Western environmental values on producing countries that are dominated by Asian culture [31].

Recognizing that palm oil is a highly productive oilseed crop, replacing palm oil with other vegetable oils would create a need for more land for cultivation. Hence, it serves as an indicator that the potential replacement by other oils would not be suitable. Even as studies indicate that beef and soy imported into the EU created more deforestation as compared to that of the imported palm oil, the regulation emphasized palm oil only and referred to it as a forest-risk commodity [29,32]. The requirement for establishing a uniform and compulsory certification standard for imported palm oil, detailed product labels, such as palm oil-free and certified palm oil, and campaigns to enhance customer awareness and acceptance have distinguished palm oil from other vegetable oils. These actions can be deemed an unwarranted reinforcement of the misconception that palm oil is harmful to the environment. Notwithstanding the resolution of a shared global responsibility and the need for a global solution on palm oil issues, there exists reasonable doubt as to whether palm oil-producing countries have been engaged in the resolution itself [29].

However, studies on the impact of oil palm plantations on global natural resources indicate environmental consequences in the producing countries. These impacts have caused severe and widespread pressure on the environment as more landscapes are cleared to meet the growing global demand for affordable and versatile vegetable oil [3]. Among the adverse impacts on the ecological systems are deforestation and degradation of tropical forests, which cause destruction of biodiversity, soil erosion, water pollution, and deterioration of the water and air quality [33,34,35]. Moreover, using slash-and-burn techniques for forest and land clearing leads to forest fires and releases carbon dioxide into the atmosphere, which results in global warming and induces climate change [36,37]. These detrimental impacts on natural resources and ecosystems have positioned the palm oil industry badly, especially among EU member states, as palm oil products are alleged as being imported deforestation [38].

Nonetheless, the Malaysian oil palm plantations can be categorized as systematically organized as they have succeeded from the organized rubber plantations, which span more than a century and are mostly owned by the large plantation companies. Hence, several standard practices adopted to reduce environmental degradation were taken throughout the years. Some of the good agricultural practices are the usage of organic fertilizers to recycle nutrients through the placement of cut fronds, empty fruit bunches and chipped old palm trunks; the planting of cover crops; the construction of terraces and silt pits; the correct placement of cut fronds; the mulching with empty fruit bunches; the practice of precision agriculture; and the utilization of Integrated Pest Management (IPM) to reduce the use of pesticides by using livestock to control weeds and using predators to control pests [1,23,39]. Moreover, the compulsory zero-burning practice for all oil palm replanting returns organic material into the soil to increase fertility as well as minimizing GHG emissions and accidental forest fires [40]. Mature oil palm trees also serve as a green canopy and a carbon sink that captures carbon from the atmosphere [41,42].

In addition to extracting crude palm oil, the mill produces large quantities of organic waste in the form of Palm Oil Mill Effluent (POME), which is used as a potential source of renewable energy [43]. Methane captured from POME is used as biogas in mills to produce electricity and thus reduces the usage of fossil fuels and GHG emissions by 30% [44]. The biogas trapping in palm oil mills can reduce climate change impact, maximize available resources, and fulfil sustainability requirements while enhancing the image of palm oil as an environmentally friendly product. Moreover, POME can be used as an organic fertilizer as it restores soil fertility and provides nutrients to oil palm trees while reducing chemical fertilizer usage and cost. Although POME is a highly polluting waste and may have profound environmental implications if untreated, it has been converted to an economically useful and environmentally friendly by-product. By achieving zero-waste standards, the oil palm industry rebuts negative allegations of environmental impacts through cleaner production and greater sustainability.

Contrary to EU perceptions, the Malaysian palm oil industry is highly governed and regulated. There are currently more than 15 laws and regulations that the industry must conform with, such as the Land Conservation Act 1960; the Environmental Quality Act 1974; the Environmental Quality (Clean Air Regulations) 1978; the Pesticides Act 1974 (Pesticides Registration Rules); the Occupational Safety and Health Act (1977); the Protection of Wildlife Act 1972; and the National Park Act 1984 [45]. The industry also has to comply with the Hazard & Critical Control Points (HACCP) and the Environmental Impact Assessment (EIA) requirements in addition to the MPOB’s Codes of Practices (CoP) certification scheme as a guide to retain food safety, quality, and sustainability throughout the palm oil supply chain [46].

Apart from domestic regulations, Malaysia is also a signatory to the Convention on Biological Diversity (CBD), the Charter of the Indigenous Tribal Peoples of the Tropical Forests, and the Cartagena Protocol on Biosafety. In 2006 the Malaysian Palm Oil Council (MPOC) launched the Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF) to financially fund wildlife conservation activities and studies by academicians, government officials, and NGOs on the overall impact of the palm oil industry on wildlife, biodiversity and the environment [47]. The commitments towards national and international laws demonstrate Malaysia’s responsibility and transparency in ensuring conservation of the environment and protecting wildlife impacted in the palm oil sector.

3.2. Social Sustainability

As the engine of growth for an emerging nation, the palm oil industry has contributed directly towards poverty eradication through employment opportunities. Land development schemes such as FELDA provided land to 112,635 families for oil palm plantations to create livelihoods and generate income [48]. The organized plantations spurred economic development and promoted social advancements, especially in the early years after independence. New job openings were created in the agricultural sector, which comprises the planting and harvesting of oil palm trees. These new downstream sectors include processing facilities and palm oil-related industries, research and innovation for high-quality planting materials, technology advancement, and new end-products. Further to employment opportunities at oil palm plantations, the palm oil industry has enabled job openings and positions in other spin-off auxiliary services, such as transportation, trading/brokering houses, bulking installations, financial services, and other related supporting industries. As the country ventures into the development of by-products in the palm oil sector, the utilization of biomass through new technology is expected to create an additional 66,000 new jobs and had generated MYR 30 billion by 2020 as stipulated in the National Biomass Strategy 2020 [49].

In spite of the benefits in alleviating the socio-economic status of the society, the industry has been inundated with social issues related to oil palm plantations. Social issues, such as the violation of human rights, the rise in crime, the influx of foreign labor, conflicts over land rights, labor management, and the displacement of local and indigenous communities are some of the pertinent concerns in the industry [8,9,10]. The conflicts over land rights and forest resources negatively impact the surrounding communities, plantation companies, and governments while working conditions unconducive to safety in the oil palm plantations further expose workers to health and safety risks and ergonomic injuries [50,51]. As development in the oil palm sector continues to progress, studies have found that the diminishing human interaction with nature could lead to a sense of disaffection towards the environment [52].

The recent ban on palm oil import by multinational consumer goods manufacturers in the United States (US) due to allegations of forced labor has also garnered the attention of the industry. Companies such as Nestle, General Mills and Unilever’s restriction on the purchase of palm oil was made to exclude the commodity from their global supply chain. Major oil palm growers, such as FGV Holding and Sime Darby Plantation, were accused of exploitative practices of workers, with the latter company being recognized as the world’s largest producer of CSPO by RSPO [53]. The US Customs and Border Protection claimed to possess evidence of sexual and physical violence, retaining salary, and restrictions on movement among workers in the plantation. However, there are uncertainties as to whether these contentions were systematically and academically researched to ensure the validity and reliability of the findings.

Moreover, palm oil mills are regulated by the authorities through laws that protect workers’ welfare, such as the Occupational Safety and Health Act (OSHA) 1994; the Employment Act 1990; the Passport Act 1966; the Factories and Machinery Act (FMA) 1989; and the Children and Young Persons (Employment) Act 1966 [46]. The implementation of these acts through regulations and policies demonstrates social sustainability in the areas of human rights and labor rights as well as corporate governance. Hence, there exist reasonable doubts that the allegations hurled against the industry are substantiated.

3.3. Economic Sustainability

Many countries, especially those rich in natural resources, are dependent on the agricultural sector as an important mainstay of the economy. Agrarian sectors have an important role in food security and employment in many nations and have historical significance. Economic development studies frequently argue that agricultural productivity is usually followed by rapid industrialization and thus has become a source of long-term sustainable economic growth [54,55,56]. However, other scholars contend that the natural resource-rich countries grow at a slower rate than the resource-poor countries, and the countries tend to exhibit an inferior institutional quality. This phenomenon is known as the ‘resource curse, the staple trap, or the paradox of plenty’ [57]. The revenues generated by the commodity sector may have a positive impact on manufacturing. However, this dependence on natural resources may translate into low economic diversification and greater deindustrialization. Nonetheless, studies suggest that while agricultural exports contribute to the shrinkage of the manufacturing sector, the agricultural sector with strong links with the domestic economy may increase the prospects of industrialization [57,58]. This is true with the case of Malaysia; the palm oil industry has spurred downstream manufacturing activities.

Strong economic growth and trade liberalization in the international economy over the past few decades have led to an increase in the export of palm oil and its related products. The total export of oil palm and palm oil products in 2020 was recorded at 26.59 million tonnes with a revenue of MYR 73.25 billion compared to MYR 67.55 billion in 2019 [1].

Table 1. Export of oil palm and palm oil products for 2019 and 2020.

	Volume (Million Tonnes)			Value (MYR Million)
	2020	2019	Difference (%)	2020	2019	Difference (%)
Palm oil	16.22	17.43	(7.0)	45,656	39,128	16.7
Palm kernel oil	1.14	1.01	13.3	4151	3306	25.6
Palm-based oleochemicals	4.41	5.46	(19.4)	16,415	18,121	(9.4)
Biodiesel	0.33	0.72	(53.7)	1194	1994	(40.1)
Other palm-based products	1.96	1.84	6.8	4542	3951	15.0
Palm kernel cake	2.53	2.58	(2.1)	1295	1045	23.9
Total	26.59	29.04	(8.5)	73,253	67,546	8.4

Source: MPOB (2021) [1].

provides data on the export volume and value of oil palm and its products for 2019 and 2020. Based on the table, this review supports the idea that the income generated from the agricultural commodity exports relates to the production sector output [57]. As an integral agricultural sector, the industry mitigates the food security risks in many countries [54,55]. Moreover, economic modernization in this sector induced technological improvement that reduced dependence on the unskilled workforce [58].

The export competitiveness of palm oil is attributed to several factors. Oil palm is a highly productive oil crop as it produces up a yield up to ten times higher than other oilseed crops, such as soybean, sunflower and rapeseed, and has a productive life span of over 20 years [23,59]. As such, oil palm plantations record the highest land productivity. With the growth in population and the surge in renewable energy, palm oil can address those demands by increasing the yield from the existing plantation areas. Oil palm growers can maximize the Oil Extraction Rate (OER) through breeding and cloning highly efficient plants. In addition, the innovation and development of scientific research in planting materials can increase palm oil productivity while ensuring sustainable practices.

By virtue of its high productivity, the cost competitiveness of palm oil makes it the most affordable vegetable oil in price-sensitive markets in emerging countries, such as India and China. As a cost-effective solution, palm oil is a suitable replacement for animal fats. The versatility of the crop is evident as it has been used as an ingredient in the food and non-food industries due to its strong stability and ease of conversion [20,60,61]. In addition, the biomass from the palm mesocarp fiber, palm kernel shell, and empty fruit bunches is a source of a renewable energy which is used to generate heat in plantation mills as a cost-saving measure, while palm oil-based biodiesel has been identified as an alternative fuel due to its price competitiveness [62,63,64]. The utilization of palm oil in various sectors is attributed to technological innovations, quality enhancements, and scientific advancement.

In addition to reducing the carbon footprint, POME can potentially securitize energy supply while generating additional revenue from the sale of surplus energy. Using POME as an alternative energy source not only saves on the costs of mill operation and waste treatment but mill operators can earn up to MYR 3.8 million per year through the generation of electricity [65]. The ability to generate income from POME has changed the perception of the by-product from waste to be treated to a resource that could generate earnings. Unused electricity can be connected to the national grid under the Feed in Tariff (FIT) scheme introduced in the National Renewable Energy Act 2011. This supports the Fifth Fuel Policy target of achieving 5% of national grid-connected electricity generated from renewable sources [66].

The stringent observations of quality and regulatory control and the capacity of domestic processing facilities are instrumental for the industry to meet the high standards of the global market. These factors have enabled Malaysia to consolidate its position as the second leading producer of palm oil in the international trade of oils and fats. The development brought about by palm oil has led the commodity crop to be referred to as the development engine [30] and the driver of development [67].

However, the rise of palm oil from the 1960s onwards has created disruptions in the global market dominated by other vegetable oils, notably the soybean oil and the rapeseed oil industries. Hence, countries, especially member states in the EU, sought to protect their domestic oil industries by introducing tariff barriers and disguising non-tariff barriers, such as safety, societal and environmental concerns. Furthermore, negative information was disseminated through the anti-palm oil campaigns as part of the politics to defend locally produced vegetable oil in order to win back its market share. The backlash against palm oil is attributed to the competitiveness of palm oil in comparison with soybean oil and rapeseed oil as feedstock for biodiesel production. These barriers are discriminatory as they inhibit producing countries from exporting palm oil on the global market. The restriction could limit the use of palm oil-based biodiesel in importing countries and hence contradicts free trade practice principles regulated by the World Trade Organization (WTO).

Therefore, this review posits that the protectionism policy has evolved from traditional trade barriers such as import tariffs, quota restrictions, and import bans to contemporary issues such as health, workers’ protection, and the environment. These current concerns are multifaceted and are interlinked with international trade. Moreover, preventing the conversion of forest land to cultivate commodity crops would hamper developing countries such as Malaysia from using palm oil as a development tool. Denying the growth of developing economies by enforcing natural-resource conservation might be seen as prejudice because established nations in the West have abused their environment for economic advancement for millennia.

3.4. Health Sustainability

Constant clearing of land for oil palm plantation and expansion using the slash-and-burn technique has led to accidental fires. The fires resulted in the recurring haze that has increased the occurrences of ill health among the people in Southeast Asia [68]. In spite of national laws and the plantation companies’ practice of restricting the use of fire to clear forests, transboundary haze continues to be an annual air pollution problem that affects people’s livelihood and health. Moreover, oil palm trees which are planted on peatlands are highly susceptible to the fires that lead to the transboundary haze. The transboundary haze issue is intricate, and politically motivated interventions are ineffective as the system is safeguarded by patron-client relationships [69].

Another health-related issue concerning palm oil relates to its perceived nutritional value and association with diseases. One prominent incident regarding the health standard of palm oil occurred in the 1980s in the US [70]. National campaigns were undertaken to convince the public that tropical oils such as palm oil and coconut oil in food products contributed to coronary heart disease due to their higher saturated fat. Interest groups successfully compelled food manufacturers to replace tropical oils with hydrogenated soybean oil. The substitution was successful initially as “almost all of the nearly 2 billion pounds of tropical oils removed from annual use in the US food supply in the late 1980s was replaced, pound for pound, by hydrogenated oil…” [71] (p. 236). However, it backfired as the partially hydrogenated oil in food products produces trans fatty acid, which is harmful to cardiovascular health as it increases total cholesterol. This has led to a surge in palm oil exports to the US as the solid-fat component makes it an ideal substitute to eliminate trans-fatty acid in hydrogenated vegetable oils.

In spite of the assertion that the consumption of a high amount of saturated fats from palm oil is linked with cardiovascular diseases, studies revealed that there is no concrete evidence associating palm oil intake with the risk of heart disease or the negative impact on children’s health [72,73]. Furthermore, the link between the dietary intake of palm oil and obesity, in comparison with other vegetable oils, is not supported by adequate evidence [74,75,76]. There is also no scientific proof to validate the association between palm oil intake and the incidence of cancer [77]. In fact, the nutraceuticals and phytonutrients from palm oil reduce cholesterol and diabetic levels in adults [78,79]. Research on the effects of palm oil tocotrienol as an antioxidant in the prevention and treatment of bone-related illness was conducted [80]. In addition, the anti-inflammatory effect of oil palm phenolics may prevent the formation of neurodegenerative diseases such as Alzheimer’s and Parkinson’s [81,82]. The findings by these scholars have strengthened the neutral and positive effects of palm oil intake in the context of obesity and non-communicable diseases in humans.

Thus, this review postulates that the nutritional content of palm oil has contributed significantly to improving the health of the global population. Existing literature and studies conducted on the health aspects of palm oil indicate that there are potential benefits that require further scientific investigation. As palm oil is essential in developing good human health, this review suggests the need for more research to gather concrete evidence to support the industry and invalidate adverse claims regarding palm oil safety and quality. The most pertinent question is the relationship between the type and quantity of oils and fats with health, while taking into consideration other nutrients in the dietary intake as well as lifestyle habits.

4. Discussion

Based on the deliberation of sustainability issues in this paper, this review contends that there is a shift in the context of international attacks on the palm oil industry. The alleged health hazards of palm oil consumption, as claimed in the 1980s, have evolved to that of the abuse of worker human rights and the detrimental impact on the environment in current times. The reposition of bombardment towards palm oil indicates the tendency of importers and consumers in developed economies to continuously develop negative perceptions towards commodities that are in direct competition with their domestically produced vegetable oils. Despite the nature of oil palm as a perennial crop with a competitive edge, the continuous and damaging accusations on the oilseed crop can be surmised as unsubstantiated and politically motivated. Hence, this review premises that palm oil is constantly exposed to bias masked by non-tariff barriers on its cultivation and industrial application in the varying contexts of usage and consumer countries. Therefore, further research is required to mitigate the impact of the evolution these discriminatory measures. The findings of the research would be beneficial in protecting the interests of palm oil-producing countries such as Malaysia.

Through analysis of the literature, it is clear that environmental, social, economic, and health aspects form the basis of the sustainable development of the palm oil industry. These aspects are diverse and are intertwined with one another. Supporting the sustainable production of palm oil is a constructive approach compared to limiting palm oil development and shunning oil palm plantations. Due to its global impact, the palm oil sector supports multiple SDGs, such as the SDG 2 on ending hunger, SDG 3 by promoting good health, SDG 7 through the development of renewable energy and SDG 12 on sustainable consumption and production patterns. As such, the increase in accountable and responsible practices in the palm oil industry should be strategically and consistently encouraged. This would strengthen the industry’s ability to address multi-dimensional challenges while remaining sustainable in order to enhance its international reputation.

This review also establishes that the discourse on sustainability provides various insights. The interpretation of sustainability is contested according to the views and contexts of the stakeholders. There exist patterns of differing perspectives in the palm oil industry where palm oil-producing countries focus on the economic benefits while palm oil-consuming countries stress social, environmental, and safety concerns. Furthermore, although sustainability standards have been asserted regarding palm oil, other vegetable oils have been subjected to fewer requirements for compliance. This has led to the perception that the regulation on sustainability has been targeted at disqualifying palm oil, especially as the feedstock for biodiesel production. The regulation can be interpreted as a form of trade protectionism with a strong political clout that specifically targets palm oil. As such, issues on palm oil sustainability need to be addressed effectively through comprehensive policies to ensure its competitiveness and acceptance in the international market.

5. Conclusions

It is evident that the oil palm tree is a highly productive and versatile crop that produces competitively priced oil. The broad functionality of the oil seed crop, which is achieved through the chemical modification process, has widened the application of palm oil in diverse industries. As such, the production and trade of palm oil are of great concern due to their socio-economic significance in national development. Hence, the sustainability issues need to be addressed effectively for the industry to remain resilient in the future.

Based on the discussion, concerns about palm oil sustainability, such as commodity-driven deforestation, which results in a loss of biodiversity and induces climate change, continue to dominate the discourse on palm oil cultivation. The increase in the crime rate, the high employment of foreign labor, and the violation of indigenous community land rights are some of the social issues that further place the entire industry in a bad light. On the economic front, the commodity has faced immense scrutiny from the international community despite its price competitiveness and high productivity rate. Emerging issues concerning palm oil quality and nutritional value have been extensively researched compared to other vegetable oils by scientists around the world. These challenges that confront the palm oil industry are multi-dimensional and involve numerous stakeholders at the national and international levels. The way forward to enhance the image and increase the competitiveness of Malaysian palm oil in the global market is through compliance with sustainability certification. The adherence will assist in positioning Malaysia as the preferred global supplier of CSPO.

This review shows that the palm oil industry constantly faces pressure and challenges in conforming to sustainable production and development. This warrants further research using empirical data as issues on sustainability continue to evolve in the palm oil supply chain. Other emerging factors, such as advancement in the research, innovation, and development of new products and technologies and the requirements of importing countries can influence the criteria and principles of sustainability imposed on palm oil. Although this article provides an overall review of the palm oil sector, the study utilizes sources from the Scopus database only. Nevertheless, this research area on palm oil sustainability can provide valuable preliminary insights to policymakers in developing strategies to manage disruption in the global palm oil trade. These strategies serve to safeguard the country’s economic interest in the export market and protect the environment and ensure societal wellbeing.