In the letter, NASH has alleged that the livelihood of 1 million Malaysians is threatened by the Truth in Labeling - Palm Oil Bill 2010, which is aimed at making consumers aware of palm oil as an ingredient.
Originally proposed by independent Senator Nick Xenophon, the bill is based on environmental concerns citing deforestation in Indonesia and Malaysia for palm oil production.
The bill was passed by the Senate at the end of June and will next go to the House of Representatives, where if passed, it would become law.
In a strongly worded letter, NASH said that it was “deeply disappointed” that a small minority continues to run a campaign to support a legislation that is “based on unjust claims on the health and environmental sustainability of palm oil”.
“The proponents of the proposed bill arrogantly failed to fully and objectively analyze the palm oil industry in its proper socio-economic perspective, and accept the truth," the letter said.
“But instead, unjustifiably linked it to environmental issues, which the industry, on the contrary, has demonstrated an unfailing commitment to protect and preserve,” it said.
NASH said in the letter that the palm oil industry in Malaysia is vital to the socio-economic progress of the country as it contributes around US$20bn to the country's export revenue.
The industry also supports over half a million workers, 240,000 of whom are smallholders each owning and toiling on small plots of land ranging between two to four hectares, the organization said.
“Should the proposed Bill become law, negative impacts and implications on trade on the commodity, and consequently the welfare of smallholders and their dependents will be at stake,” the letter said.
NASH contended that contrary to claims by the proponents of the Bill, the palm oil industry is environmentally friendly and sustainable.
“Growth strategies formulated by the Malaysian Palm Oil Board towards the generation of higher income, zero waste and value-addition led to compliance of international standards in agricultural production,” the letter said.
“Malaysian producers are leaders in the Roundtable On Sustainable Palm Oil and smallholders under the FELDA scheme are also leaders having been certified under the German ISCC scheme,” it said.
NASH also said that contrary to some claims, the Malaysian palm oil industry adopts environmentally friendly practices and supports biodiversity including sanctuaries for orangutans.
The palm oil bill is a heated issue in the Australian food industry currently with several other bodies in Australia and New Zealand having come out in opposition to it previously.
The Australian Food and Grocery Council (AFGC) also criticised the bill, saying that the cost of changing a single label would be between AU$10,000 to AU$19,000, which equated to hundreds of millions of dollars in extra costs as there are up to 60,000 products on supermarket shelves.
The New Zealand Food and Grocery Council supported the AFGC in its condemnation of the bill, saying increased costs of labelling would hit New Zealand families.