* EU bill on biofuels puts palm oil on backfoot
* Industry fears court of public opinion in West
* Malaysia hires powerful U.S. lobbyists
* Use plight of poor farmers to turn blame on West-documents
By A. Ananthalakshmi and Emily Chow
KUALA LUMPUR, Aug 21 (Reuters) - On the morning of Feb. 26,
executives from a Washington consultancy presented a strategy
paper to some of the most powerful officials in the Malaysian
palm oil industry.
The message: Don't allow environmental activists and Western
governments to tarnish palm oil to the extent that it ends up a
pariah product, like tobacco.
The $60 billion palm oil trade has been vilified by
environmentalists because of the vast areas of tropical
rainforest they say have been cleared to grow the commodity that
is consumed by billions of people.
Malaysia and Indonesia, which together produce about 85% of
the world's palm, had been largely passive in response,
comfortable in relying on the sustainability of demand for an
oil used for cooking and in items like soaps and shampoos, snack
foods, pizza, bread and biodiesel. Food accounts for nearly 70%
of global consumption of palm oil.
But last year, Malaysia launched a global public relations
and lobbying offensive to protect the reputation of its key
export, particularly in Europe. Reuters has pieced together a
picture of the sweeping effort from internal public relations
strategy documents as well as interviews with dozens of palm oil
industry participants.
The European Union passed an act earlier this year to phase
out palm oil from renewable fuel by 2030 due to deforestation
concerns. While demand for palm oil used in EU biodiesel
accounts for a fraction of global supply, palm oil producers in
Malaysia and Indonesia worry the law could spur calls for
regulation in its usage in food.
Malaysia has led the PR offensive since the EU began working
on the law, as it is far more reliant on exports than larger
rival Indonesia, and ships about 85% of its total palm oil
production overseas annually.
Malaysian Prime Minister Mahathir Mohamad has said the EU
law was "grossly unfair" and was an attempt to protect
alternative oils that Europe produced itself. The publicity campaign aimed at critics of palm oil has been
coordinated by the Malaysian Palm Oil Council (MPOC), a state
agency responsible for promoting palm oil and looking for trade
opportunities for the product.
The agency is funded at least partly by a fee paid by
plantation companies based on palm oil production. MPOC's board
includes representatives from plantation companies, including
Sime Darby Plantation Bhd SIPL.KL , the world's biggest oil
palm planter by land, and IOI Corp IOIB.KL .
The representatives of the two companies did not respond to
requests for comment.
Its campaign is centred around small holder farmers, carried
out by platforms that say they represent farmers but are created
or run by PR firms hired by the MPOC, the strategy documents
dated Aug 6, 2018 and Feb 26, 2019, show.
MPOC has also approved funding news sites, researchers,
op-eds and former politicians to speak up for palm oil and
undermine the EU law, the documents show.
None of the groups or individuals identified in the
proposals have been transparent about their funding and have
often claimed to be independent voices.
At least three PR firms hired by the MPOC are running these
campaigns, copies of their proposals seen by Reuters show. The
MPOC approved all their proposals, according to two sources with
direct knowledge of the matter.
LOBBYIST FOR TOBACCO, OIL
The main company involved in the strategy is the DCI Group,
a Washington-based public relations firm that has previously
developed campaigns for tobacco and oil multinationals. Its
clients have included Altria (NYSE:MO) MO.N and the former Burmese
military junta, according to U.S. public records and DCI itself.
Asked by Reuters for comment on its strategy, DCI said it
was engaged in the Malaysian campaign but did not give details.
"We are proud to work with Malaysia's palm oil industry in
its fight to defend the jobs and livelihoods of small farmers
against unfair trade and environmental policies which perpetuate
global poverty," said Justin Peterson, managing partner at DCI
Group, in an e-mail.
The MPOC has not spoken publicly about the campaign. It told
Reuters that it uses various methods, including engagement of
PR agencies and advisory firms, to pursue its objectives, but
for competitive and client confidentiality reasons, it would not
disclose details.
"Industries and governments across the world engage in an
array of efforts to defend their national interests. In MPOC's
case, however, we ensure that all such activities are above
board and are in accord with local rules and regulations
governing such engagements," the MPOC said.
The Malaysian ministry in charge of palm oil declined
comment.
The other two firms running PR campaigns are: Kuala
Lumpur-based Invoke, run by Rafizi Ramli, a former Malaysian
lawmaker; and Unitas Communications, a PR firm with offices in
London and Jeddah.
Invoke runs its campaign through the 'Planters United'
platform, which describes itself as a non-governmental
organisation made up of smallholder farmers, according to a Feb.
26 copy of its proposal seen by Reuters.
Unitas, Rafizi and Invoke did not respond to calls and
emails for comment.
EU lawmakers declined to talk about lobbying by the palm oil
industry but environmental group Greenpeace said the lobbying by
Malaysia had resulted in the EU law relating to biodiesel being
diluted.
Officials at the European parliament were not available for
comment and Reuters was unable to independently confirm this.
REASONING WON'T WORK
According to documents reviewed by Reuters, DCI's campaign
pitch to the MPOC this year sought a budget of over $1 million.
The MPOC approved the budget after negotiating the price
slightly down, the two sources said.
MPOC also approved a 2019 budget of around $120,000 for
Invoke and $200,000 for Unitas, the sources said.
MPOC and the three PR companies did not comment on the
amounts and whether it was approved.
Reuters has seen a copy of an eight-page public affairs
proposal distributed by DCI at the February 26 meeting with at
least a dozen officials from MPOC, the Malaysian ministry of
primary industries and palm oil companies. The proposal said:
"The eco-colonialists have turned to a scorched earth approach
of junk science and faulty logic: they label palm oil as the new
tobacco."
"Attempting to reason with these opponents, through dialogue
or scientific research will not stop their attacks and will not
advance Malaysia's position."
The document did not name the "eco-colonialists" but in
previous paragraphs it refers to the EU.
Farmers should be the "primary messengers" globally of the
campaign against critics of palm oil, DCI said in a previous
proposal to MPOC, in August, 2018.
"Small farmers are Malaysia's most powerful weapon against
Europe and the NGOs," it said.
DCI has been running or coordinating grassroots campaigns
through front groups such as Farmers Unite, DCI's campaign
proposals from August 2018 and February 2019 show.
Farmers Unite says on its website it is a global coalition
of oil palm small farmer associations and other supporting
organisations, and that it speaks for more than 7 million oil
palm smallholders across the world.
It did not respond to requests for comment.
Farmers Unite took out full page advertisements last
December in the UK against British retailer Iceland when the
company said it would stop selling in-house products containing
palm oil. Iceland says it has ended the use of palm oil in such
products by the end of 2018.
Iceland declined to comment on the Farmers Unite campaign.
In August 2018, DCI pitched to the MPOC the creation of an
African platform with the help of Nigerian think tank, the
Initiative for Public Policy Analysis (IPPA), saying "recruiting
support from African allies is necessary to put maximum pressure
on your opponents."
"These are weak spots for EU NGOs and politicians – they
fear accusations of neo-colonialism and discrimination," the
proposal said.
In its next presentation in February, 2019, DCI asked for a
budget of $10,000 per month for Farmers Unite, which it
described as a project of IPPA. IPPA has previously opposed
tougher legislation against tobacco products in Nigeria, citing
the negative impact on farmers and investment.
IPPA said "where we raise our money and get support is
immaterial."
In its August 2018 proposal, DCI also set out a strategy to
use a group called Faces of Palm Oil, which says it represents
650,000 farmers in Malaysia, in the campaign.
"Faces of Palm Oil will once again serve as the campaign
hub; and small farmers should be the primary messengers in
Malaysia, European and international media," DCI said in the
proposal.
Faces of Palm Oil has been the most vocal farmers' group on
social media, criticising NGOs, EU lawmakers and journalists,
based on its social media feed and environmental groups tracking
palm oil. It says on its website it is a joint project of three
major farmers' groups and other bodies.
Faces of Palm Oil did not respond to a request for comment.
MPOC did not comment on the funding of the farmers' groups.
PAID OP-EDS
DCI has also sought to influence opinion through paying for
news articles, columns and research, according to the documents
seen by Reuters.
This year, for example, DCI asked the MPOC to provide a
budget of $11,000 a month to a newsletter called Palm Oil
Monitor, according to the February proposal. The newsletter has
been publishing news stories and behind-the-scenes information
on the negotiations of the EU law, scooping mainstream media on
the contents of Mahathir's strongly-worded letters to European
leaders. The plan was accepted, the two sources said.
Khalil Hegarty, one of the two authors of Palm Oil Monitor,
told Reuters in an emailed statement that the newsletter
"benefited from support from various sources (including industry
sources)." He declined to provide specifics.
Hegarty said "we don't lobby, and any insinuation that Palm
Oil Monitor is a part of some grand lobbying effort would be
inaccurate."
Malaysia and Indonesia key palm oil statistics png https://tmsnrt.rs/2MKroCk
Malaysia and Indonesia key palm oil statistics interactive https://tmsnrt.rs/2MLoX28
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>