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Malaysian palm oil has long been a key pillar of the country’s economy, contributing to GDP and employment. However, its production has been associated with deforestation, biodiversity loss, and environmental concerns, leading to increased scrutiny from global regulators. The European Union Deforestation Regulation (EUDR), implemented in 2023, introduced stringent sustainability requirements, mandating deforestation-free supply chains for agricultural commodities, including palm oil.

This teaching case study examines the implications of the EUDR on Malaysian palm oil, analysing the challenges the industry faces in adapting to new regulatory demands while maintaining market competitiveness. In addition, it explores Malaysian stakeholders’ responses to the EUDR and highlights the necessity for enhanced supply chain transparency, compliance with traceability requirements, and strategic adjustments to production processes.

Simulation-Based Learning Structure for the Malaysian Palm Oil Trade Dispute
This simulation-based learning (SBL) experience follows a structured approach, incorporating preparation, role-play, active learning, and debriefing to help students engage critically, collaborate, and apply theoretical frameworks to real-world trade and sustainability challenges.

1. Preparation Phase (Pre-Simulation) – 20 Minutes
 

Instructor’s Role:
 

• Provide students with background materials (case study, trade policies, environmental concerns, industry data).
• Introduce key concepts and frameworks:
  - Triple Bottom Line (Profit, People, Planet)
  - Sustainable Value Framework
  - Data-Driven Agricultural Supply Chain
• Assign students to stakeholder groups (Malaysian palm oil producers, EU policymakers, environmental NGOs, Malaysian government, EU Trade Commission).
• Give each group a role brief outlining their objectives, key challenges, and potential strategies.
   

Students’ Role:

• Review materials and discuss stakeholder perspectives within their assigned groups.
• Identify key arguments, negotiation tactics, and trade-offs they may need to consider.
• Develop a preliminary position statement to present in the negotiation phase.
   

2. Simulation Phase (Active Learning) – 50 Minutes
This phase consists of three rounds of interactive engagement.

Round 1: Stakeholder Presentations (15 Minutes)

• Each group delivers a 2–3 minute opening statement, outlining their stance, key priorities, and initial demands.
• The EU Trade Commission moderates, ensuring clarity and setting the tone for negotiation.
   

Round 2: Negotiation & Debate (30 Minutes)
 

• Stakeholders engage in structured discussions to address key issues:
  - Trade barriers and economic impact
  - Sustainability concerns and deforestation policies
  - Fair market access and competition
  - The role of smallholder farmers
• Groups counter-argue, seek alliances and propose trade-offs to reach a mutually acceptable agreement.
• The EU Trade Commission facilitates discussions, ensuring all perspectives are heard.
• If needed, breakout discussions are allowed for behind-the-scenes negotiations.
   

Round 3: Resolution & Agreement (5 Minutes)

• The EU Trade Commission proposes a final trade resolution based on the negotiation outcomes.
• Stakeholders vote on the agreement, deciding whether to accept or request revisions.
   

3. Reflection & Debrief (Post-Simulation) – 20 Minutes

Instructor’s Role:

• Facilitate a group reflection on the simulation experience.
• Guide students in analysing:
  - Challenges in international trade negotiations
  - How economic, environmental, and political interests intersect
  - Real-world policy implications
• Highlight how different theoretical frameworks shaped decision-making.
   

Students’ Role:

• Share insights on their decision-making process, challenges faced, and strategies used.
• Reflect on how they balanced economic growth, sustainability, and regulatory concerns.
• Discuss what could be done differently in real-world policymaking.
   

Assessment & Learning Outcomes

1. Critical Thinking & Argumentation – How well did students defend their positions using data and theories?
2. Collaboration & Negotiation – Did students engage constructively with other groups and seek solutions?
3. Application of Theory – How effectively were sustainability and trade frameworks incorporated?
4. Decision-Making & Problem-Solving – Were students able to arrive at practical, balanced trade solutions?
    

This simulation-based learning approach immerses students in real-world decision-making, enhancing their ability to think strategically, negotiate effectively, and apply business and policy frameworks. By stepping into the roles of policymakers, business leaders, and activists, students experience the complexities of global trade firsthand, preparing them for real-world problem-solving in sustainability, management, and international business.

Dr Geetha Nadarajan
ºìÐÓÊÓƵ Business School
@email