As the new government of Prime Minister Keir Starmer has taken office in London, many policy decision remain unconfirmed from the previous administration – largely because of surprise ‘snap’ election called in July by former Prime Minister Rishi Sunak.

For palm oil producers and exporters, the details of implementation of the UK’s Due Diligence rules are an important outstanding question. Known as ‘Forest Risk Commodities’ (FRC) rules, they were determined under the Environment Act passed back in 2021.

The legislation imposed a ‘legality standard’ for due diligence of palm oil and other commodities. This ensures that illegal deforestation will be completely removed from UK supply chains – and that certification efforts of countries including Malaysia will be accepted by UK authorities. This represents a positive, cooperative approach to ensuring sustainable commodities without imposing burdensome red tape onto either Malaysia’s farmers or UK importers.

The Labour government has not yet published details of how this will be implemented. The most sensible approach would be to retain the legality standard, which has been praised by experts.

The UK’s Trade and Agriculture Commission (TAC), an expert body under the UK government’s Trade Ministry, thoroughly analysed Malaysia’s palm oil sector, concluding in an official report that “Malaysia operates a mandatory deforestation-free standard [MSPO]” and so â€œthere is a low risk that Malaysian palm oil exported to the UK would come from land that was deforested”.

Palm oil is one of the most-certified and most-regulated commodities anywhere in the world: this reality is outlined in another assessment published by the House of Commons’ Environmental Audit Committee (EAC), which examined issues related to global deforestation, and found Malaysian palm oil to be a leader in sustainable practices.

The EAC Report was authored by Members of Parliament from several different UK political parties, and concluded that â€œthere is an opportunity to learn from the experience of palm oil” because sustainability commitments â€œdo not extend to other commodities”.

Perhaps the most important question for the new government is how it can resist the temptation change the approach to FRCs. The experience of the EU Commission, just across the English Channel, offers a cautionary tale. The EU ignored the benefits of legality standards, and instead introduced a harsh non-tariff barrier under the EU Deforestation Regulation (EUDR).

The EUDR has proven controversial, and is considered by many governments, NGOs, businesses and experts to be unworkable:

MPOC’s CEO Belvinder Sron explains the unworkable nature of the current EUDR: “A single sales order of one product could involve multiple batches from refineries, mills and plantations resulting in millions of data points for a single shipment”.

The UK’s due diligence approach is, by contrast, a measured and achievable approach to stopping imports linked to deforestation.

The legality standard for FRCs represents a responsible and fact-based approach to assessing how palm oil should be regulated by importing countries. The UK example shows how Western nations can offer genuine support and partnership on sustainable production – rather than political grandstanding. In Brussels, that grandstanding has eroded relations between the EU and developing nations, and will push up prices for consumers and increased costs for businesses. All of these outcomes are negative for economic growth.

The UK government can avoid such pitfalls by committing to the existing legality standard and working with trading partners including Malaysia to ensure trade, investment and sustainable production can increase in the years ahead.