INDONESIA – EUROPEAN UNION RELATIONS: INDONESIAN SUSTAINABLE PALM OIL (ISPO)

Source: https://money.kompas.com/

Writer: Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung

Palm oil products are a national strategic product that has contributed greatly to Indonesia’s trade balance and economy amid the COVID-19 pandemic and domestic economic recession conditions.

Oil palm is one of the leading commodities that form the backbone of the national economy. This is because palm oil contributed greatly to the country’s foreign exchange, reaching the US $ 23 billion, or around IDR 320 trillion in 2019. From 1990 to the present, oil palm production is a source of annual income for rural farmers who are scattered throughout Indonesia.

Until the end of 2020, unfortunately, discrimination against the Indonesian oil palm plantation industry and its derivative products was still carried out by a number of anti-palm oil supporters, especially those from European Union countries.

Indonesian Foreign Minister Retno L.P Marsudi stated clearly that the discriminatory actions of the European Union are very contrary to the principles of partnership and collaboration that Indonesia has upheld so far.

Indonesia has always put forward cooperation and emphasized collaboration with various partner countries, but when it comes to national interests, the Indonesian government must be firm. Moreover when it comes to the principles and mutual understanding have been previously agreed with the European Union.

Simply, what Indonesia wants is only one, just treat us fairly.

For Jakarta, the European Union has long been a strategic partner network related to sustainable bilateral trade, where there are common views, many international issues with the European Union. Indonesia always opens communication dialogues openly and intensely. Previously, for some years, Indonesia actually already has a close partnership with the European Union.

In 2019, amidst the onslaught of the negative palm oil campaign in Norway, palm oil turned out to play an important role in achieving the targets of the Sustainable Development Goals in Indonesia. In addition, palm oil is a strategic industry for the Indonesian economy. The collective efforts of the government, business circles, and communities are considered successful in maintaining the sustainability of peat and oil palm lands.

In 2017 Norwegian Parliament issued a resolution to reduce the use of palm oil in biodiesel products circulating in Norway. On the other hand, Indonesia continues to strive for the quality of sustainable palm oil, one of which is through the biodiesel program. Indonesia is also developing technology to convert palm oil into bio-hydrocarbon fuel to produce green diesel, green gasoline, and green aviator.

Rainforest Foundation Norway, an NGO that is critical of environmental policies in Indonesia, actually appreciates the success of environmental conservation in the country recently. This achievement needs to be appreciated; however, a long-term national policy is also needed to maintain good trends in environmental conservation in Indonesia.

Over the past 6 years (2014-2020), Indonesia has succeeded in reducing forest fire hotspots. Indonesia is building a peatland monitoring system technology called the peatland restoration information and monitoring system, which is integrated, scalable, and accessible online.

Most oil palm trees are not a direct cause of deforestation of tropical rainforests in Indonesia. The drastic loss of tropical rainforests was caused by transmigration policies in the 1960s, issuance of Forest Concession Rights in the 1970s, and massive forest fires. Initially, the transmigration commodity was not oil palm, but coffee, cocoa, candlenut, pepper, and other plantation products. However, people tend to compare between past and present, but forget about the historical sequence. In fact, oil palm trees were planted and contributed to the reforestation of deforested forests in the 1980s.

Energy Company ST1 Norway claims that at least 40% of the total biofuel is used in the Nordic region. Unfortunately, deforestation has resulted in palm oil being seriously rejected in Norway. This was confirmed by Nestle Norway, which became the target of Greenpeace’s environmental campaign in 2010. Since then, Nestle has become a member of the Roundtable on Sustainable Palm Oil (RSPO) and targets to use 100% certified palm products by 2020.

In fact, Indonesian oil palm farmers can meet sustainability standards based on ISPO, related to the fertilization system and the use of natural pest killers according to ISPO which has succeeded in increasing production and incomes of farmers. These oil palm farmers consider that ISPO has helped alleviate poverty, such as through assistance efforts to increase the capacity of farmers and eliminate middlemen in the sale of palm oil crops.

Further, talking about palm oil certification, it must come from the country of origin due to representative of the interests of local farmers and industry. The issuance of Indonesian Sustainable Palm Oil (ISPO) palm certification has continued to increase from 2013 to 2018.

The negative campaign attacks were evenly distributed across countries in Europe. The perception of palm oil that continues to deteriorate in Europe is used by a number of companies as a marketing strategy. It is suspected that these companies are only taking advantage of negative palm oil campaigns to pursue profits alone, but do not contribute to biodiversity and sustainability.

The EU also encourages farmers to be more involved in the Indonesian sustainable palm oil (ISPO) scheme, due to the importance of Indonesian oil palm plantations as part of the people’s daily economy.

Indonesia has made a lot of progress in managing sustainable palm oil production, and this progress needs to be sustained in the coming decades.

Furthermore, the discrimination and double standards imposed by the EU are justified by one of the leading members of the European Parliament, Dr. Werner Langen, who is also the head of the Delegation for relations with the countries of Southeast Asia and ASEAN. In his open letter, he expressed his view that palm oil that is produced sustainably should not be categorized as high risk to the environment (Indirect Land Use Change / ILUC high risk), and that the European Commission’s Delegated Act policy was pure protectionist and hypocritical (Indonesian Ministry of Foreign Affairs, March 27, 2019).

The Delegated Act is formulated by the European Commission and brought to the European Union Parliament for a decision. The Delegated Act is considered to be detrimental to Indonesia because it prohibits CPO from being used for fuel or biofuel. In addition, CPO is included in a high-risk commodity.

Basically, the EU does not prohibit palm oil from entering the EU market. It’s just that to meet the Renewable Energy 2030 target, the EU is committed to reducing the use of biofuels that are not environmentally friendly. Thus, to bridge this, the EU is ready for dialogue with Indonesia and other palm oil-producing countries. The statement was conveyed by David Daly from the European External Action Service (EEAS), EU Commission.

A win-win solution is needed in resolving the issue of discrimination by the EU against palm oil which will have negative implications for at least 17 million people involved in the domestic palm oil industry.

Indonesia has a commitment and consistency to continue to increase various efforts to produce sustainable palm oil and will never allow its green land to be destroyed for palm oil. Therefore, Indonesia objects to the EU’s policy through the Delegated Act which categorizes its palm oil products as a commodity that damages the surrounding environment and causes deforestation.

Indonesia and the European Union actually need each other. The investment development of both parties mutually benefits Indonesia and the European Union. In order to solve the problem of Indonesian palm oil, it is clear that relevant standards, credibility, and transparency are needed by Indonesia and the European Union.

Therefore, the issue of Indonesian crude palm oil (CPO) should not interfere with the partnership between Indonesia and the European Union which has been going well over the last 20 years.

In conclusion, Indonesia and the EU should be discussed more intensely joint efforts to improve ISPO, so that ISPO can be accepted by all EU countries that are seriously interested in buying palm oil from Indonesia.

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4 thoughts on “INDONESIA – EUROPEAN UNION RELATIONS: INDONESIAN SUSTAINABLE PALM OIL (ISPO)

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