Promoting Compliance with Sustainability Standards in Malaysian Palm Oil Industry through a Collection Centre Model

Abstract

This paper examines the development of a collection centre model for smallholders in the Malaysian palm oil industry. The model aims to ensure compliance with sustainability standards and improve the quality of palm oil production. The model involves several parties, including smallholders, contractors, collection centres, and mills. The requirements for compliance with the model are outlined, with an emphasis on labour regulations, traceability, and pre-grading of fresh fruit bunches. The Malaysian Palm Oil Board (MPOB) plays a crucial role in regulating the industry and issuing licenses for various activities. Several studies have been conducted on the environmental, financial, and innovative aspects of implementing no-deforestation, no-peat, and no-exploitation (NDPE) policies in the industry. The findings suggest that environmental performance and innovation are key drivers of economic value creation that promote NDPE policies. Attitude and awareness also play a significant role in supporting NDPE and engaging with ecopreneurial businesses. Increased awareness of sustainability has a positive effect on NDPE implementation but may also increase costs. Finally, the impact of palm oil on health, social and economic aspects, environment, and biodiversity has been reviewed in the Malaysian context. The collection centre model is a crucial step in ensuring compliance with sustainability standards and improving the quality of palm oil production. Further research is needed to explore the potential of this model for enhancing the sustainability of the palm oil industry.