Indonesia’s critical stance toward EUDR
Indonesia’s criticism against the EU Deforestation Regulations is reflected in President Joko “Jokowi” Widodo’s statement as relayed by Foreign Minister Retno Marsudi.
President Jokowi has rightly accused the EU of “coercion,” and according to Retno Marsudi the president has expressed his concern on European Union policies that are discriminatory in nature and hamper Indonesia’s commodity exports. The new policy that the president spotlighted is the Deforestation Regulation.
If we look further afield, it is obvious that apart from being discriminatory, the Deforestation Regulation also contains elements that are damaging and disrespectful toward the efforts that are being and will be made by Indonesia concerning deforestation and forest degradation. The categorization of countries based on vague criteria is also decided unilaterally. There is no transparency about which countries are considered high, standard or low risk.
There is also no doubt that the regulation is unacceptable because it requires traceability and geotagging of plantations which require costly investment and technological capacity that smallholder farmers will struggle to meet. In addition, it requires full segregation which is almost impossible for farmers to fulfil. The regulation aims to create new sustainability standards and does not consider the sustainability schemes that are already being practiced by the palm oil industry today such as the Indonesian Sustainable Palm Oil (ISPO), Malaysian Sustainable Palm Oil (MSPO), Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability and Carbon Certification (ISCC). EU’s unilateral new sustainability standard will of course increase production costs which in turn will reduce the competitiveness of the palm oil industry.
As a result, approximately 4 million oil palm smallholder farmers in Indonesia who depend oil palm cultivation for their livelihood will not be able to access the EU market. This is not just a theoretical argument. Unilever introduced similar requirements to its commodity supply chain in 2013 which led to 80 percent of farmers cut off from its supply chain, not because they are destroying the forests but because they are unable to meet the requirements imposed on them.
Some EU representatives claim that because the regulation targets many commodities, there is no discrimination. The burning question then is why rapeseed and sunflower oil are not included despite their production being more inefficient, requiring more land and has lower productivity compared to oil palm. Products included in this regulation are generally produced by developing countries in Asia, Africa and Latin America. In this context, the deforestation regulation can be deemed as EU’s engaging in trade protectionism.