Required Report - public distribution

**Date:** 7/15/2005

**GAIN Report Number:** MY5029

MY5029

**Malaysia**

**Biotechnology**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Jonathan Gressel

U.S. Embassy, Kuala Lumpur

**Prepared by:**

Raymond Hoh

**Report Highlights:**

Malaysia is an important agricultural market, especially for bulk grains
and oilseeds from the U.S. Malaysia currently places no restrictions on
the importation of biotech food or feed. The Biosafety Bill is under
another review and likely will not be passed until the end of the year.
On April 28, 2005, the Prime Minister launched the new National
Biotechnology Policy, followed with the creation of the Malaysian
Biotechnology Corporation, a one-stop agency to promote development of
the biotechnology sector. However, Malaysia still faces the challenge of
adopting unified, transparent and science-based legislation and
regulations that will allow the free trade and commercialization of
biotech products.

On June 22, 2005, Malaysia and U.S. exchanged letters to embark on an
exchange program for scientists from both sides to do agricultural
research including biotechnology.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Kuala Lumpur \[MY1\]

\[MY\]

Table of Contents

[Section I. Executive Summary 3](#section-i.-executive-summary)

[Section II. Biotechnology Trade and Production
4](#section-ii.-biotechnology-production-and-trade)

[Section III. Biotechnology Policy
5](#section-iii.-biotechnology-policy)

[Section IV. Marketing Issues 6](#section-iv.-marketing-issues)

[Section V: Capacity Building & Outreach
8](#section-v-capacity-building-outreach)

[Section VI: Reference Material 10](#section-vi-reference-material)

# Section I. Executive Summary

Malaysia is the 26th largest agricultural export market for the U.S. In
2004, the U.S. exported \$419 million of agriculture, fish and forestry
products to Malaysia, mainly bulk grains and oilseeds, feedstuffs,
temperate fresh fruits, temperate hardwood lumber, and other high valued
consumer products. Almost all of the imported US soybean and corn
shipments, valued at \$64 million in 2004, are produced through modern
agricultural biotechnology. The other primary sources of soybeans and
corn are Argentina, Brazil and China. Having access to this important
market is vital to the exports of US biotechnology-related products.

Malaysia has an influential voice among the developing countries as well
as in the Islamic world. With its ambition to becoming a global player
in the biotechnology industry, Malaysia could be a strong partner with
the U.S. in the development of agricultural biotechnology and be a
powerful, vocal advocate of biotechnology in the international arena.
Malaysia's leadership on 'Halal' issues is also recognized in the
Organization of Islam Conferences.

On April 28, 2005, the Prime Minister of Malaysia launched the new
National Biotechnology Policy to give impetus to developing the
biotechnology sector into a new economic engine to enhance prosperity
and wellness of the nation by 2020. The Malaysian Biotechnology
Corporation (MBC) was created as a one-stop agency to spearhead the
development of the sector, including coordination of regulatory policy
among different agencies. Unfortunately, the Ministry of Natural
Resources and Environment (MONRE) is taking positions that could have
serious negative impacts on biotechnology-related trade at the
Convention on Biodiversity's COP/MOP 2 meeting (held May 30 -- June 2005
in Montreal).

Malaysia currently places no restrictions on the import of biotech food
or feed, although it does have pending legislation that would regulate
imports and labeling of biotech food. After numerous revisions and
delays, the Biosafety Bill is now under responsibility of the MONRE.
Officials at the MONRE are working on the final draft before submitting
to the Malaysian Parliament hopefully before the end of 2005. Once the
Biosafety Act is in place, the Ministry of Health will amend the Food
Regulations of 1985 to require all biotech foods be labeled (labeling
would be required for products containing over 3% biotech content).

On June 22 2005, the Malaysian Minister of Science, Technology and
Innovation, Dr. Jamaludin Jarjis and the USDA's Undersecretary Joseph
Jen exchanged letters to embark on an exchange program involving 4
scientists from each country every year to do agricultural research
including biotechnology.

# Section II. Biotechnology Production and Trade 

Production

While Malaysia has not yet produced a biotechnology crop commercially,
several genetically modified crops containing traits of value have been
produced at the experimental stage. At the Malaysian Agricultural
Research and Development Institute (MARDI), rice has been successfully
modified to resist the tungro virus and papaya manipulated to resist
ring-spot virus infection and to have a prolonged shelf life. Other crop
plants such as pineapples are manipulated to resist \"black heart\",
bananas and papaya for delayed ripening and chili for virus resistance.

Malaysia is also developing genetically engineered oil palm, with a
focus on increasing value-added products from the palms, such as high
oleate and high stearate oil, nutraceuticals (vitamin A and E),
bio-diesel and bio‑plastics.

In general, food biotechnology is relatively new in Malaysia although
food and food ingredients produced by traditional biotechnology like
fermentation technology have brought to market products like soy sauce,
yogurt and 'tempeh'. Food biotechnology has also produced high quality,
clarified fruit juices. Current research focuses on using enzymes to
modify palm oil, sago starch and local fruit juices.

Several animal recombinant vaccines have been produced to assist the
development of animal husbandry. Marker assisted breeding strategies are
also being practiced to increase the efficiency of livestock breeding
programs. In order to reduce the high costs associated with imported
feed, research is also underway in Malaysia to generate cheaper domestic
livestock feed through biotechnology.

Malaysia has collaborated with the Massachusetts Institute of Technology
(MIT) since 1999 to discover nutraceuticals from two Malaysian natural
products, Eurycoma longifolia (Tongkat Ali) and Centalla asiatica
(Pegaga); and to produce bio-plastic through applying metabolic
engineering to oil palm.

Trade

Malaysia currently places no restrictions on the import of biotech food
or feed, although it does have pending legislation that would regulate
imports and labeling of biotech food. To date, the only biotech ag
product officially approved to be imported into Malaysia is 'roundup
ready' soybeans. Although the bulk of soybeans imported from the U.S. is
biotech, there is a niche non-biotech market since local soy product
exporters need to conform to the EU's biotech requirements when they
export processed soy-related food such as soy sauce, canned tuna in soy
oil and soy milk to the EU. While Malaysia has not officially approved
the imports of biotech corn, it has not restricted the importation of
biotech corn.

Malaysia is not a food aid recipient and is unlikely to become one in
the near future. Malaysia does not produce any biotechnology crops that
were developed outside the U.S. and have not passed through the U.S.
regulatory system.

# Section III. Biotechnology Policy

The draft biosafety regulations, initially released for comment in 2001,
caused some concern for the USG due to the broad scope combined with an
undefined adherence to the \"precautionary principle\" as well as
socio-economic, religious, and cultural \"norms\" that would be a part
of the decision making process. After numerous revisions and delays, the
bill is now under the responsibility of the Ministry of Natural
Resources and Environment (MONRE). Officials at the MONRE are working on
the final draft before submitting to the Malaysian Parliament hopefully
before the end of 2005.

Once the Biosafety Act is in place, the Ministry of Health will amend
the Food Regulations of 1985 to require all biotech foods be labeled
(labeling would be required for products containing over 3% biotech
content). In general, Malaysian officials closely monitor international
practice on biotech foods and labeling, and have used Codex Alimentarius
discussions as a benchmark in drafting their own regulations. The U.S.
has commented on Malaysia's WTO Notification (G/TBT/N/MYS3) on biotech
labeling in November 2002.

Malaysia ratified the Biosafety Protocol in Dec 02 2003. Malaysian
officials at the MONRE claimed that the pending Malaysian biosafety
regulations would meet Malaysia's commitments as a full Party to the
Protocol. The MONRE led the Malaysian delegation to the Convention on
Biodiversity's COP/MOPII meeting in Montreal (May 30 -- June 4 2005). At
the MOPII, Malaysia's interventions in the Working Group on Liability
and Redress (May 25 - 27) included a broader definition of "damage" to
cover damage to environment, cultural, spiritual and moral values. In
the meeting, Malaysia also promoted the application of a strict
liability regime for all biotechnology products and argued against
"permit defense" for biotech producers/operators, that limit liability
for an activity that has been permitted by the government. Malaysia also
took the very strong position that the Parties to the Protocol should
impose extensive obligations on non-Parties dealing with Parties
relating to liability and redress. At the MOPII, Malaysia supported the
NGOs and the African Group's call to change the "may contain LMO"
language to "does contain LMOs" on every shipping document for living
modified organisms (LMOs) for use as food, feed or for processing. While
still at the negotiation stage, these positions could have serious
implications on U.S. biotechnology related trade.

On April 28, 2005, the Prime Minister of Malaysia launched the new
National Biotechnology Policy to give impetus to developing the
biotechnology sector into a new economic engine to enhance prosperity
and wellness of the nation by 2020. The Policy recognized the need to
create a legislative and regulatory environment conducive to the
development of the biotechnology industry. Soon after the announcement,
the Malaysian Biotechnology Corporation (MBC) was created as a one-stop
agency under the Prime Minister to spearhead the development of the
sector, including coordination of regulatory policy among different
agencies. For further details on the new Policy, please refer to MY5019
dated 5/5/05.

#  

# Section IV. Marketing Issues

The following is the profile of the Malaysian Consumers towards
agricultural biotechnology and biotech food according to a survey done 3
years ago by the International Service for the Acquisition of
Agri-biotech Applications (ISAAA):

> Moderately to very interested in biotechnology
>
> Moderately to very concerned about biotechnology issues
>
> Perceive the risks of biotechnology to be moderate
>
> Perceive the benefits of biotechnology to be between moderate to high

Have a high regard for research institutes (76%), university scientists
(67%)

and consumer groups/NGOs (62%) as being highly concerned about public

health and safety issues relating to biotechnology

Believe that regulatory bodies (86%), research institutes (84%) and
university

scientists (79%) have total responsibility for conducting risk
assessment and risk

management on biotechnology.

Have a very high regard for the role of science in the development of
agriculture

in Malaysia (89%)

Rate themselves as having a moderate understanding of biotechnology

Rate themselves as having a slightly low to moderate understanding of

biotechnology

Have moderate score on factual knowledge about biotechnology

Generally exhibit moderate attitudes toward biotechnology

*On banning biotech foods*. 64% would be in favor being actively
involved through

either time or money in banning GM foods. Only 14% are not in favor of
this

action.

*On labeling biotech foods*. 90% believe that GM food should be labeled.

*On benefits of biotechnology to small farmers*. 62% agree with the
proposition

that agricultural biotechnology will not benefit small farmers.

*On the benefits of biotechnology to Malaysia agriculture.* 65% believes
that

biotechnology is good for Malaysian agriculture.

*On the adequacy of biotechnology regulations in Malaysia.* 51% disagree
with

the statement that current biotechnology regulations in Malaysia are
sufficient.

Only 23% agree about current regulations sufficiency.

*On paying extra for the labeling of biotech foods.* 49% indicated that
are willing

to pay extra for the labeling of biotech foods, where as 29% are not
willing to pay

extra.

Average frequency of contact had with the media within a two-month
period is

extremely low, the tri-media sources 1.42 times, family and other
proximate

interpersonal sources practically less than once and books and pamphlets
less

than once also.

12% reported using experts and less than ten percent have claimed
accessing

websites on biotechnology. They have listened to NGOs. They have barely

talked to a religious group, regulators or a local politician about
biotechnology

nor have they attended seminars.

Are highly trusting of information that comes from University
scientists, science

magazines and private sector scientists at 67%, 59% and 48%
respectively.

31% feel that information they have received about biotechnology is
useful.

33% feel that it is only somewhat useful and 34%, the highest
percentage, feel

that it is not useful.

When asked if they perceive the information they receive about
biotechnology,

30% percent feel that the information is highly scientific, 45% feel
that the

received information is moderately scientific, and 24% thought the
information

was not at all scientific.

Types of issues/concerns they have heard or known about biotechnology
are as

follows: 60% have heard of moral/ethical issues, 32% have heard of
religious

issues/concerts, 20% about cultural and 19% about political
issues/concerts.

Think that moral/ethical issues (76%) will influence most their judgment

on biotechnology.

For full details, please refer to the publication entitled 'The Social
and Cultural Dimensions of Agricultural Biotechnology in Southeast Asia:
Public Understanding, Perceptions and Attitudes towards Agricultural
Biotechnology in Malaysia' by Napolean K. Juanillo.

# Section V: Capacity Building & Outreach

Past Activities

1\. Over the last 4 years, Post has sent 2 journalists, 3 government
officials, 3 science professors and one pro-biotech NGO to the U.S. to
participate in the Cochran-funded Biotech short-courses.

2\. EMO/USDA has fully funded 2 Malaysian officials each year to attend
the APEC High Level Policy Dialogue on Agricultural Biotechnology since
the first meeting was held in Mexico City in 2002.

3\. The Embassy's Public Affairs and USDA have sponsored eminent
American experts (including CS Prakash, Bruce Chassy, Shetty Kalidas and
Val Gaddings) to speak on biotechnology at conferences and seminars in
Malaysia over the last four years.

4\. The USG was the platinum sponsor of the 'BioMalaysia 2002:
Biotechnology Symposium, Exhibition, and Business Partnering' held in
Kuala Lumpur at the beginning of October 2002. With funding from
EMO/USDA and Public Affairs/State, the U.S. Embassy was able to fully
sponsored Dr. Autar Mattoo (Research Leader, Plant Molecular Biology
Laboratory, ARS Beltsville) as a speaker; as well as the international
travel expenses of three other distinguished American speakers (Prof.
Anthony Sinskey, MIT, Prof. C.C. Liew, Harvard and Dr. Hasnah Hamdan,
Quest Diagnostics Inc.). To support the organizer's efforts to make the
conference \"truly international\", Post sponsored six journalists and
scientists from Romania, Indonesia, the Czech Republic and the
Philippines, Vietnam and India. The numerous articles generated after
the event, supporting ag biotechnology, were well worth the effort of
identifying, sponsoring, and escorting this group throughout the
conference.

5\. Malaysia has increasingly welcomed international conferences on
biotechnology and has shown a willingness to collaborate with the United
States to present biotech events. In December 2004, Malaysia co-hosted
the APEC "Building a Positive Environment for the Investment of
Agricultural Biotechnology" Seminar that was presented in response to
priorities identified at the U.S.-chaired APEC High Level Policy
Dialogue on Agricultural Biotechnology. Malaysian Minister of Science,
Technology and Innovation, Dr. Jamaludin Jarjis, opened the seminar that
explored the need for efficient and predictable regulatory environments
and development of intellectual property systems as a basis for
attracting investment. A list of goals that are necessary for building a
positive investment environment was formally presented to the 2005 APEC
High Level Policy Dialogue on Agricultural Biotechnology in Seoul, Korea
in March 2005.

6\. On June 22 2005, the Malaysian Minister of Science, Technology and
Innovation, Dr. Jamaludin Jarjis and the USDA's Undersecretary Joseph
Jen exchanged letters to embark on an exchange program involving 4
scientists from each country every year to do agricultural research
including biotechnology. The program among others may cover the areas of
genomics, crop yield forecasting and feasibility studies for agriculture
and agro-based projects.

# Section VI: Reference Material

Key Biotechnology Contacts in Malaysia:

Dato' Suriah Abdul Rahman

Secretary General

Ministry of Science, Technology & Innovation

Level 4, Block C5, Parcel C

Federal Government Administrative Centre

62662 Putrajaya

Tel: (60-3) 8885-8020/8021/8000

Fax: (60-3) 8889-9000

E-mail: suriah@mosti.gov.my

Datin Huzaimah Mohd. Yusoff

Under Secretary (Environment)

Ministry of Natural Resources & Environment

Level 5, Block C5, Parcel C

Federal Government Administrative Centre

62662 Putrajaya

Tel: (60-3) 8885-8033

Fax: (60-3) 8889-2973

E-mail: huzaimah@mosti.gov.my

huzaimah@nre.gov.my

Mr. Iskandar Mizal Mohmood

Malaysia Biotechnology Corporation Sdn. Bhd.

Chief Executive Officer

Level 23, Menara Naluri

161 Jalan Ampang

50450 Kuala Lumpur

Tel: (60-3) 2116-5588

Fax: (60-3) 2116-5577

E-mail: iskandar@biotechcorp.com.my

Tan Sri Datuk Dr. Ahmad Zaharuddin Idrus

Science Advisor

Prime Minister Department

Level 2, Perdana Putra Building (West Wing)

Federal Government Administrative Centre

62502 Putrajaya

Tel: (60-3) 8888-1800/ 1890/ 1801

Fax: (60-3) 8888-3801

E-mail: azops@might.org.my

Y. Bhg. Dato' Hajjah Khamsiah Muhammad

Director General of Agriculture

Department of Agriculture, HQ

Ministry of Agriculture & Agro-Based Industries

Wisma Tani

Lot 4G1, Presint 4

Federal Government Administrative Centre

62624 Putrajaya

Tel: (60-3) 8870-1000 (G/L)

Fax: (60-3) 8870-1467

E-mail: kham@doa.moa.my

Dato' Hawari Bin Hussain

Director General

Department of Veterinary Services

Ministry of Agriculture & Agro-Based Industries

Wisma Tani

Level 2, Lot 4G1, Presint 4

Federal Government Administrative Centre

62624 Putrajaya

Tel: (60-3) 8870-2001/2000

Fax: (60-3) 8888-8685

E-mail: hawari@jph.gov.my

Dato' Junaidi Bin Che Ayub

Director General

Department of Fishery (Jabatan Perikanan Malaysia)

Ministry of Agriculture & Agro-Based Industries

Wisma Tani

Level 1-6, Lot 4G2, Presint 4

Federal Government Administrative Centre

62628 Putrajaya

Tel: (60-3) 8870-4008/ 8870-4000

Fax: (60-3) 8889-2460

Dr. Michael Dosim Lunjew

Secretary General

Ministry of Plantation & Commodities

6-13^th^ Floor, Lot 2G4, Presint 2

Federal Government Administrative Centre

62654 Putrajaya

Tel: (60-3) 8880-3334

Fax: (60-3) 8880-3345

Dr. Hj. Mohd. Nasir Bin Mohd. Ahsraf

Secretary General

Ministry of Health

Level 12, Block E7, Parcel E

Federal Government Administrative Centre

62590 Putrajaya

Tel: (60-3) 8883-2539

Fax: (60-3) 8888-4758