Indonesia: Europe Do Outright Discrimination Against CPO

Indonesia government strongly opposes European Union (EU) decision to adopt the Draft Delegated Regulation, said government official on Monday (03/18) - Photo by CMEA Office

JAKARTA (TheInsiderStories) — Indonesia government strongly opposes European Union (EU) decision to adopt the Draft Delegated Regulation, said government official on Monday (03/18). The country labelled the regulation as an outright discrimination and a disguised protectionist measure against palm oil.

Moreover, Indonesia considers that EU classification on palm oil as unsustainable high-risk indirect land use change (ILUC) vegetable oil is based on a unilateral and arbitrary scientifically flawed standard.

“The lack of an impact assessment, including any examination of the land use or GHG impacts of allowing other vegetable oil crops while phasing out palm oil, which is 4 to 10 times more productive, is unacceptable,” said Coordinating Minister for Economy Darmin Nasution.

He continued, Indonesia will act to challenge the discriminatory measures of the EU within the World Trade Organization (WTO). While the organization ostensibly promotes the multilateral rule-based trade system, the double standards on palm oil are obvious and nefarious for which Indonesia may be left with no options but to take counter-measures, which will not exclude litigation. Moreover, Indonesia government will seek to encourage and intensify dialogues through promoting a platform on SDGs.

Indonesia President Joko Widodo has also expressed concern on the wider trade and investment relations with the EU should the discrimination against palm oil be confirmed. The Strategic Partnership between ASEAN-EU is on hold and Indonesia is examining bilateral relations with Member States that have been most supportive of the discriminatory actions proposed by the Commission.

Moreover, Indonesia will continue to collaborate closely with palm producing countries within the intergovernmental organization Council of Palm Oil Producers Countries (CPOPC), as well as the ASEAN frameworks, not only to promote sustainability but also to encourage a common front against the discriminatory actions of the EU.

A Working Group on Vegetable Oil is foreseen within the ASEAN-EU Framework and Indonesia will insist that discussions are focused on achieving SDGs especially on poverty alleviation. Especially, palm oil has a big contribution to Indonesian economy. The industry employs 17 million workers which include more than four million farmers.

Indonesia considers the delegated regulation will actually undermine sustainability in the vegetable oil sector. Nasution mentioned, productivity of palm oil at 3.8 MT per hectar per year compared to 0.6 MT for rapeseed and 0.5 MT for soya is the key to protect the global land mass of vegetable oils as demand continues to increase.

“In this context, the EU approach in addressing sustainability on vegetable oils does not bear close scrutiny, is lamentable and unacceptable,” he stressed.

But it does not mean that Indonesia is willing to sacrifice lands of high biodiversity for the lack of productivity elsewhere. On the contrary, Indonesia has applied a moratorium on forest clearance for expansion of new palm oil plantation while several initiatives are underway to improve further productivity levels to include replanting of high yielding oil palm trees on existing lands owned by smallholders.

Indonesia to Manage CPO Exports

Increasing the effectivity of palm oil export customs and excise, Finance Ministry release palm oil export regulation, including crude palm oil and its derivative products. The regulation number 22/PMK.04/2019 manages the flow that exporters must go through before submitting goods export notification, starting from this month.

“To increase data accuracy, services acceleration, and customs supervision of palm oil, CPO, and the derivative products, it is necessary to regulate provisions regarding exports in a separate regulation,” said an official statement.

The regulation stated, exporters must submit applications for export loading goods of CPO and derivative products in bulk. Then, the customs and excise official can do physical examination, covering amount and type of goods.

The checking can be implemented prior or after the loading report. Export loading goods will only be served after exporters fulfill their export duty and levies obligations.

Physical checking will be done at customs area in the loading place, temporary landfill, customs landfill, or bonded storage place. Physical inspection can also be carried out at the exporter’s warehouse or other places used by exporters to store the goods.

Authorized Economic Operator exporters are free from physical inspection, but they must stated laboratory test result from Directorate General of Customs and Excise or other officially registered labs.

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