Sustainability governance of Malaysian palm oil in the European union: the strategic role of key stakeholder agencies

Abstract

This research unravels the underlying complex interplay on Malaysian palm oil sustainability governance in the European Union (EU). While Malaysian key stakeholder agencies have formulated numerous measures to assert influence and strengthen palm oil market share in the regional bloc, there seems to be a strategic disconnect between implemented policies and EU responses. A total of three research objectives were examined, namely (i) historical development of the national palm oil industry and strategic role of key stakeholder agencies in view of growing pressure for sustainable development from EU policymakers, (ii) factors contributing to the present Malaysian palm oil conundrum in the EU region and (iii) adequacy of existing strategic measures undertaken by key stakeholder agencies to ensure the commodity’s competitiveness in the EU market. This qualitative study uses primary data from interviews with key informants in Malaysia and the EU with experience in the government, international, non-profit, academia and business sector; observation sessions at oil palm plantations and review of official statistics and documents. The study is also supported by secondary data obtained in journal articles and industry publications. The data collected were analysed using thematic analysis approach to interpret current developments. The study employs the theory of institutionalism to investigate the intricacies of sustainable palm oil policy frameworks in evolving trade dynamics between the trading partners. This research reveals three main findings, (i) there exists coherence in sustainability governance through coordinated responsibilities and systemic changes to institutional framework, aligned with global sustainability goals (ii) social, economic, environmental, political, technological and legal factors within and outside Malaysia shapes the nation’s sustainable palm oil trajectory amidst extra-territorial effects of EU policies and (iii) the policy interventions are inadequate to mount any effective pressure on EU’s regulatory framework. Nevertheless, progress and achievement made in sustainable palm oil development provides potential to influence the EU’s policymaking process. Therefore, concrete efforts and continuous initiatives on policy recalibration should be undertaken to expediate sustainability compliance given that palm oil is the nation’s strategic commodity. This thesis contributes to the discourse on institutionalism by exploring the nexus of sustainability governance and trade landscape within Malaysia-EU relations.