Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Hansard source

I rise to speak on the Competition and Consumer Amendment (Truth in Labelling—Palm Oil) Bill 2017. Palm oil is an edible vegetable oil derived from the pulp of oil palm fruits. Oil can also be derived from the kernel of the same fruit, but this is usually referred to as palm kernel oil. Palm oil is around half saturated fats, which is uncommon for vegetable fats. It is semisolid at room temperature. It's a common cooking ingredient in the tropical belt. Palm oil is also used extensively in the commercial processed food industry as it is cheaper than competitors like canola oil. It also yields more oil per hectare than any other vegetable oil. Palm oil's semi-solid state at room temperature also makes it suitable as a cheap substitute for butter or other shortening in baking. Interestingly, during the industrial revolution, palm oil became sought after by British traders in Asia and Africa for use as an industrial lubricant for machinery. It can also form the basis of soap products. It's part of the derivative behind the Palmolive soap brand—the other, of course, being olive oil.

The bulk of the world's palm oil is produced in Indonesia and Malaysia. Eighty five per cent of global production comes from these two countries. Indonesia produces 50 million tonnes per year while Malaysia produces 20 million tonnes. People in both countries have benefited significantly from economic development achieved through expanded palm oil agriculture and export. Of course, there has been criticism of the way that palm oil plantations have spread in South-East Asia over recent decades. Specifically, the concerns are around deforestation of rainforests and jungle to plant the palm oil monoculture.

There are two environmental concerns in relation to deforestation. Aside from general concerns around the loss of biodiversity, the native forests of Indonesia and Malaysia are the habitats of the Sumatran and Bornean orangutans. Along with illegal logging, clearing of rainforests for oil palm plantations has been blamed for orangutan habitat loss in South-East Asia. This is a particular concern because of the highly endangered status of these animals. There's also concern around carbon emissions. As we know, forests absorb carbon from our atmosphere and lock it up as trees grow. The deforestation process to clear for oil palm plantations is often done by burning. This, essentially, unlocks centuries of carbon absorbed by the forests and releases it into the atmosphere.

These concerns have led to campaigns against palm oil in developed countries like Australia. These campaigns have, in part, advocated an ethical consumption ethos, whereby consumers refrain from purchasing goods that they know contain palm oil. In Australia there are currently no legal requirements to list palm oil specifically as an ingredient. It is usually listed as 'vegetable oil' without a specific indication of which type of vegetable oil it is.

This bill, introduced by Senator Xenophon, seeks to oblige the minister to ensure that palm oil is labelled as such when used as an ingredient in consumer goods, including foods. The bill seeks to enable ethical consumption campaigns so that consumers who want to help save orangutan habitats know which products contain palm oil and can avoid purchasing them. Labor shares Senator Xenophon's concern about the deforestation in South-East Asia not only because of its impact on endangered primate populations but also because of a broader concern about the impacts on our climate. Labor also notes that Senator Xenophon has form in relation to labelling products that contained palm oil. Last time Senator Xenophon attempted to pass a change to the Food Standards Australia New Zealand Act as his vehicle for achieving the purpose he now purports to achieve through this bill. It's worth reminding ourselves of that history because it is instructive to this debate.

In government, Labor recognised that there was significant consumer and industry interest in food labelling, including in the area of environmental food labelling, so we worked through COAG and the Australia and New Zealand Food Regulation Ministerial Council to commission a comprehensive food-labelling review. This was undertaken by an independent expert panel headed up by Dr Neal Blewett, who was, of course, Minister for Health from 1983 to 1987, and who oversaw the implementation of Medicare. On 28 January 2011, the Gillard government officially released the report Labelling logic. It was the final report of the review of food labelling law and policy. Recommendation 12 of the review referred to labelling of added palm oils to food and it recommended:

That where sugars, fats or vegetable oils are added as separate ingredients in a food, the terms 'added sugars' and 'added fats' and/or 'added vegetable oils' be used in the ingredient list as the generic term, followed by a bracketed list (e.g., added sugars (fructose, glucose, syrup, honey), added fats (palm oil, milk fat) or added vegetable oils (sunflower oil, palm oil)).

In December 2011, the Australia and New Zealand Ministerial Forum on Food Regulation agreed on a response to the recommendations contained in the review. As part of that response, the forum asked the food regulator, Food Standards Australia New Zealand, to work on a number of recommendations, including recommendation 12. Food Standards Australia New Zealand provided that advice in June 2016. In response to their meeting in November 2016, ministers noted that the Food Standards Australia New Zealand technical evaluation identified that labelling of sugars, fats and vegetable oils is a very complex issue. It also identified a number of developments in food labelling and dietary advice since the initial labelling review was undertaken.

Ministers agreed that consideration of the recommendations should continue as two separate pieces of work. One is for the food regulation standing committee to lead policy work on the next steps in relation to naming resources of fats and oils in order to support consumers to make informed choice consistent with the Australian and New Zealand dietary guidelines. In April this year ministers decided to extend the scope of the committee's work to develop regulatory and non-regulatory options for identifying fats and oils on food labels. Labor looks forward to these proposals for comprehensive labelling reform. The government may wish to use this debate to update the parliament on the progress of that work. I say all of that by way of background, but I return to Senator Xenophon's bill.

Senator Xenophon's bill falls short for a few reasons. The first is that the bill amends schedule 2 of the Competition and Consumer Act, which is commonly referred to as the Australian Consumer Law, yet the Australian Consumer Law is not just a Commonwealth act. It was created in consultation with, and is enforced in concert with, states and territories and their respective consumer protection regulators. While I've no doubt as to Senator Xenophon's good intentions, seeking to change the Australian Consumer Law without consulting states and territories is, at best, discourteous and, at worst, undermines the settled agreement between the Commonwealth and the states and territories that underpins our national consumer protection regime.

The second is that the bill singles out palm oil labelling as requiring an explicit reference in the ACL, despite the fact that product labelling reform in Australia continues to be worked out far more broadly. Senator Xenophon seems to be unconcerned, for example, that the government is considering removing the requirement for product measurement markings—the weight or volume of a product—to be marked on the front of a package. They're doing this so as to remove the requirement for European cosmetic companies to relabel their imported make-up, but it can only lead to mums and dads having to spend more time in the supermarket aisle trying to figure out how much product is actually in the packet.

Senator Xenophon also seems to be unconcerned with enshrining the specification of other types of oils or fats—canola oil, for example—in legislation. More generally, the level of specificity that the bill proposes to insert in one section of the Australian Consumer Law is not in keeping with the structure of the rest of schedule 2 of the Competition and Consumer Act. It undermines its structural integrity, fairness and consistency. Like many parts of public policy, product labelling is actually far more nuanced than many realise. Labor is committed to improving Australia's product-labelling requirements, as I've described, but not like this. Labelling reform should be done in the best interests of consumers, it should be done in consultation with relevant stakeholders and it should be done in accordance with the law as well as government agreements.

The third concern Labor has about this bill's inadequacy is that its intent is to prevent deforestation overseas. Notwithstanding our doubts about using Australian consumer law as an instrument of foreign policy, Labor notes that the Department of Foreign Affairs and Trade said in their submission to Senator Xenophon's 2011 bill:

There is no evidence to suggest that labelling products which use palm oil would be an effective means to address … concerns of deforestation in South East Asia.

DFAT went on to explain that they believe that the Australian government's $300 million investment in projects to directly address deforestation and illegal logging in South-East Asia would deliver inherent benefits for the region's biodiversity, including orangutan habitats. Also, in its inquiry into Senator Xenophon's previous bill—the Food Standards Amendment (Truth in Labelling—Palm Oil) Bill 2011—the House of Representatives Standing Committee on Economics could find no evidence that palm oil labelling arrested deforestation and concluded:

The committee is of the view that the Bill would not affect deforestation of orangutan habitats because it will not act on the factors driving deforestation. Deforestation is occurring because Indonesia and Malaysia wish to improve their living standards, and one of the most effective means of doing so is through agriculture. Further, one of the most commercially successful crops in the tropics is palm oil.

Indeed, since Senator Xenophon's last private senator's bill on deforestation in South-East Asia, Australia has not been idle and our national agencies have continued to work directly with the governments of Indonesia and Malaysia on deforestation issues.

The fourth concern is that it won't work. Under section 134 of schedule 2 of the Competition and Consumer Act 2010—the act this bill seeks to amend—the minister already has the power to make the information standards that Senator Xenophon's bill prescribes. That section clearly says:

134 Making information standards for goods and services

  (1) The Commonwealth Minister may, by written notice published on the internet, make an information standard for one or both of the following:

     (a) goods of a particular kind;

     (b) services of a particular kind.

  (2) Without limiting subsection (1), an information standard for goods or services of a particular kind may:

     (a) make provision in relation to the content of information about goods or services of that kind; or

      (b) require the provision of specified information about goods or services of that kind; or

     (c) provide for the manner or form in which such information is to be provided; or

     (d) provide that such information is not to be provided in a specified manner or form; or

     (e) provide that information of a specified kind is not to be provided about goods or services of that kind; or

     (f) assign a meaning to specified information about goods or services.

Notwithstanding the current long white cloud hanging over the eligibility of Deputy Prime Minister Joyce to sit as a member of the House of Representatives, under current legislation this bill will only become law if the government agrees to it. But if the government is agreeable to implementing an information standard about palm oil or, indeed, about specifying all fats and oils in a product, the bill is redundant because the minister already has the power to do so. Labor respects the work that Senator Xenophon is doing to highlight this important environmental issue. We're ready to work with all comers on the issues around palm oil and the best way to address them. Indeed, Labor is methodically continuing to pursue improvements to Australia's product labelling arrangements in the interests of Australian consumers and will continue to do so.