Malaysian officials have formally registered opposition to a proposal in the Australian parliament calling for new labels on food products containing palm oil to identify the ingredient and carry a certification attesting to environmentally sustainable practices followed in the production of the agricultural commodity.

At a Senate committee public hearing on the policy proposal Monday, Dr Yusof Basiron, chief executive officer of the Malaysian Palm Oil Council, said the bill singles out palm oil, currently Malaysia's top agricultural export.

Palm oil is the only product to be subjected to mandatory labels in Australia for reasons other than health or nutrition, said Dr Yusof, who also represented Malaysia's Ministry of Plantation and Commodities at the hearing held by the Senate Community Affairs Legislation Committee.

The bill takes into account concerns from environmentalists about the impact of the production of palm oil, which is described as high in saturated fat, on wildlife, specifically on alleged deforestation that has affected orang-utan and elephant populations.

Independent Senator Nick Xenophon, one of the bill's key proponents in the Senate, has called for labels on foods containing palm oil to reflect that ingredient rather than "vegetable oil" that current laws allow.

Dr Yusof told the committee that the bill seeks to classify palm oil as a single generic product based on the environmental impact of production methods without differentiating between country of origin, adding that the move is "extremely misleading."

The proposed policy measure can lead to a loss of jobs and livelihoods of some 570,000 Malaysians, hindering the government's moves to use palm oil as "a means for alleviating poverty in our country," Dr Yusof said.

He said that "truth in labelling should be driven by health issues, not political expediency, which is behind some of the campaigns revolving around this bill."

Other Malaysian officials present at the hearing were High Commissioner Salman Ahmad, Carl Bek-Nielsen from United Plantations, and Vasco Sabat Singkang of the Sarawak Land Consolidation and Rehabilitation Authority.

Also raising objections to the proposed mandatory labeling, the Australian Food and Grocery Council told the committee that such a system would dilute the effect of health messages on food packaging.

Tony Mahar, the group's director for sustainable development, said the proposed rule could result in the amount of information on each label "so large and so confusing that there is a high potential for the more critical information relating to health and safety (to) be compromised."

The Senate committee is scheduled to report back to the parliament on June 16.