The demand for sustainable products was created a few decades ago on concerns over deforestation and forest degradation. The push was initially for FSC certified timber products.

Soon after, the initiative became a platform to drive sustainability concerns about other commodity products. This led to the world’s first multi-stakeholder sustainability roundtable in the early 2000s on palm oil (RSPO), over similar concerns plus issues on biodiversity loss, forest fires, environmental pollution, haze and lack of FPIC before oil palm development.

Issues with compliance to regulatory requirements became louder too as the certification systems in place did not fully cover the European energy markets as major users of palm oil. As a result, EU legally compliant certification systems were developed for Germany (ISCC DE) and expanded further to cover the wider EU countries and commodities (ISCC EU & ISCC Plus).

As the EU based certification systems were deemed as potential market barriers to palm oil trade, major producers Indonesia and Malaysia also started national certification schemes as a fall- back situation in case the EU demands became too stringent and less business friendly.

Although these national schemes were often seen as less stringent, nevertheless the potential impact on the ground is much greater being backed by the respective governments to cover the entire industry unlike the voluntary market driven systems.

For Malaysia, the MSPO certification scheme introduced in 2013, was made mandatory on 1st January 2020 and all industry players including smallholders are required to obtain the MSPO certification as a requirement to renew their business operation licenses. As the smallholders need more time, resources and technical support to meet the certification requirements, the timeline for compliance has been extended to the following year i.e. 2021.