France promises Malaysia no palm oil 'discrimination'

France promises Malaysia no palm oil 'discrimination'

French PM Jean-Marc Ayrault (L) shakes hands with his Malaysian counterpart Najib Razak, in Putrajaya, on July 29, 2013

PUTRAJAYA , JUL 29 -

French Prime Minister Jean-Marc Ayrault on Monday assured Malaysia that European rules on declaring product ingredients would not "discriminate" against palm oil, the target of environmentalists over its ecological impact.

Malaysia is second only to Indonesia in the production of palm oil, which is blamed for the destruction of huge swathes of rainforest to make way for vast plantations of the palm trees from which the edible oil is derived.

The French Senate last year approved a quadrupling of the tax on palm oil despite protests from major producing nations Malaysia and the Ivory Coast, but the move was later rejected by France 's lower house.

"I know how important it is to Malaysia given the number of people who rely on palm oil production for a living, in particular small producers," Ayrault told a press conference with Malaysian Prime Minister Najib Razak after they held talks.

Ayrault said his government did not support the tax hike, but warned that under forthcoming European legislation it would soon be mandatory to list all the oils in products.

"But palm oil will not be treated any differently from other vegetable oils. There will therefore be no discrimination against it," said Ayrault, who is on a one-day visit to Malaysia.

The tax hike known as the "Nutella amendment", so-called because palm oil is a key ingredient in the chocolate-flavoured spread, was proposed by a French senator on grounds that palm oil harms the environment and fuels obesity due to its high saturated fat content.

Palm oil is found in many other snacks such as cookies, cakes and chips.

Palm oil producers have come under renewed criticism recently after an upsurge in smog blanketing Singapore and Malaysia.

The smog is blamed on slash-and-burn farming on palm oil and other plantations on neighbouring Indonesia's Sumatra island.