Oil palm plantation companies already certified by the Roundtable on Sustainable Palm Oil (RSPO) will have to comply with Malaysia’s own Malaysian Sustainable Palm Oil (MSPO) scheme by 31 December 2018.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong set out the deadline on 22 February.

He said compliance with the scheme would be implemented in stages. Along with the 31 December 2018 deadline for plantation players that were already RSPO-certified, those without RSPO certification would need to comply by 30 June 2019 and all smallholders by 31 December 2019.

"We will be getting the financial incentives ready by June to help the industry for certification,” Bernama news agency reported him saying.

The MSPO scheme was launched at the PIPOC International Palm Oil 2013 Conference with an original implementation date of January 2015.

It was developed as an alternative to certification schemes at the time and sets out auditable standards on sustainability principles, criteria and indicators for independent smallholders, plantations and organised smallholders, and palm oil mills.

The MSPO scheme contains principles covering management commitment and responsibility; transparency; compliance with legal requirements; environment, natural resources, biodiversity and ecosystem; best practices; and development of new plantings.

“The inclusion of smallholders in the MSPO standard is especially significant because smallholders contribute up to 40% of the total area under oil palm in Malaysia,” MSPO said.

Malaysia is the second largest producer of palm oil after Indonesia, with the two countries accounting for 80% of global production.

World palm oil production is projected to rise 11% to 65M tonnes this year from 58.3M tonnes a year ago, thanks to good weather and ample rains.

Indonesia is expected to produce 34.8M tonnes of crude palm oil (CPO) this year, and Malaysia 20M tonnes, against 17.3M tonnes in 2016.

The palm oil industry contributes 5-6% of Malaysian GDP and is a major source of export earnings.