Sat. Sep 23rd, 2023
    Indonesia and Malaysia Start Negotiations with EU on Palm Oil Regulation

    Negotiations have begun between Indonesia, Malaysia, and the European Union (EU) to address concerns related to a new deforestation law that would make it more challenging for palm oil to enter European markets. As the world’s top two palm oil producers, Indonesia and Malaysia account for 85% of global palm oil exports, and they would be heavily affected by the EU Deforestation-Free Regulation (EUDR), which restricts imports into the EU of commodities sourced from deforested areas.

    During the first meeting of the joint task force, delegates discussed the risk classification given to producer countries by the EUDR, as well as the role of sustainability certification schemes such as the Roundtable on Sustainable Palm Oil (RSPO) in meeting the regulation’s requirements. Indonesian officials expressed their concerns that the EUDR discriminates against small farmers who manage a significant portion of the country’s plantations and would have difficulty complying with the strict requirements of the regulation.

    The establishment of the palm oil task force aims to address these concerns and find solutions that satisfy all parties involved. The discussions also focused on the need for the EU to recognize existing certification schemes like RSPO and Indonesia’s own ISPO (Indonesian Sustainable Palm Oil) in order to avoid the need for new compliance standards.

    The Indonesian government highlighted the importance of ensuring that palm oil exports to the EU meet the latter’s standards while emphasizing the traceability of palm oil to the plantation level. The EU delegation showed a positive attitude toward Indonesia’s proposals during the meeting, indicating a potential for successful negotiations.

    The EUDR prohibits the import of commodities sourced from deforestation and illegal sources, requiring buyers to trace the origin of the commodities, including precise geographical coordinates. Critics of the regulation argue that small farmers would struggle to meet the strict criteria set by the EU, effectively excluding them from the global supply chain. Indonesia, with its significant number of small farmers managing palm oil plantations, would be particularly affected.

    The joint task force will not only address the issue of smallholders’ inclusivity but also work on relevant national certification schemes, traceability, scientific data on deforestation, and data protection. The task force aims to conclude its work by the end of 2024, with the possibility of an extension.

    Indonesia has already made efforts to reduce deforestation and improve the sustainability of its plantation industry. However, the government views the EUDR as an opportunity to further enhance governance in the industry. The Indonesian government previously raised concerns about the regulation in various platforms, emphasizing the potential negative impact on trade and small farmers.

    – European Union Deforestation-Free Regulation (EUDR)
    – Roundtable on Sustainable Palm Oil (RSPO)
    – Indonesian Sustainable Palm Oil (ISPO)