Najib threatens to retaliate EU's resolution on oil palm (Updated)

KUALA SELANGOR: Datuk Seri Najib Abdul Razak has threatened to retaliate if the European Union (EU) goes ahead with its proposed resolution to discontinue the use of palm oil-based biofuel by 2020.

The Prime Minister said he recently spoke with Indonesia President Joko Widodo at the Asean summit about sending delegates from their respective countries to the EU parliament in the coming weeks to explain and clarify matters.

Najib's statement came after the European parliament recently called for the EU to phase out by 2020 the use of vegetable oils, including palm oil, in biodiesel that has allegedly led to deforestation.

"We (Malaysia and Indonesia) will convince these countries that whatever claims they have said are baseless. We will also tell them that we are not without our own capabilities.

"We too buy products from them. So whoever boycotts oil palm products, they will face retaliation from us Malaysia and Indonesia," he said during the Malaysian Palm Oil Industry 100 Years celebration, here, today.

Najib, however, did not elaborate on the form of retaliation he was talking about.

Malaysia and Indonesia are the two largest producers of palm oil in the world, making up 85% of the total global production.

Najib, in his speech in front some 5,000 industry players, also announced an additional allocation of RM510 million for New Palm Planting and Palm Replanting for Small Farmers Scheme.

This is in addition to the RM1.75 billion that the government has allocated for the period 2010 to 2020 under the scheme.

He added that China has agreed to increase its import of palm oil from Malaysia following his visit there.

Later in a press conference, Plantation Industries and Commodities Minister Datuk Mah Siew Keong said Malaysia and Indonesia plan to invite other palm oil producers to join them for the meeting with EU.

He said the impact on Malaysia would be significant should EU cease importing oil palm products from the country, noting that they are the largest importers.

"If they have unfair practice against us, we too can retaliate. Let's not get into specifics. But we will try to solve the matter," he said.

Mah added that EU's claim that palm oil products are leading to deforestation is inaccurate, stressing that Malaysia has strict standards.

"Many years ago, they said orang utan will be extinct by 2010. Today, 12,000 orang utan are in Sabah and Sarawak. This is proof we don't destroy forests," he said.