Indonesia to Fight Back Against EU Over Palm Oil Ban

Plantation workers prepare to unload freshly harvested oil palm fruit bunches at a collection point - Photo by EP Research Service

JAKARTA (TheInsiderStories)—Indonesia’s governments threatened to fight back against EU in palm oil ban by cutting imports from the region.

The European Parliament voted earlier this year to prohibit sales of biofuels made from the palm oils by 2021 in order to prevent deforestation and meet their ambitious climate goals.

Indonesia previously decides a defensive strategy to solve this issue by explaining the eco-friendly condition of palm oil plantation in this country. The government denied all the EU’ accuses in the palm plantation such as deforestation, unhealthy, human right violation, etc.

But now, the world’s biggest palm oil producer decides to use an offensive strategy to handle this issue. The Minister of Trade Enggartiasto Lukita said the offensive policy to handle this issue already approved by the Vice President Jusuf Kalla.

“If this [the ban on palm oil] continues, we are in a position to stop [imports of goods from Europe] too,” he explained on Monday (09/09), as quoted by Bisnis Indonesia.

For Norwegia, the government will stop fish import from the country. In addition, Indonesia will also cut the Airbus and Boeing procurement from Europe.

Furthermore, Indonesia will consolidate with the Malaysia’s Governments to take a step against palm oil ban by EU. The government will delegate the ambassador for Malaysia to discuss this issue further.

The palm oil ban potentially harm Indonesia and Malaysia’s economy since the both are the biggest palm oil exporters in the world. For the both countries, the EU is the second biggest palm oil importer after India.

Indonesia last year exported a total of 28 million tonnes of crude palm oil, valued US$23 billion. Crude palm oil contributed to 12 per cent of the Indonesia’s export. While Malaysia produced around 19.5 million tonnes last year with an export value of US$25 billion.

The Foreign Affairs Minister Retno LP Marsudi earlier said the oil palm ban is discriminative for Indonesia. She explained country already have the Indonesia Sustainable Palm Oil (ISPO) policy since 2009. This policy reflects the government commitment to reduce greenhouse gases and pay attention to the environmental issues. it ensure all of the plam oil companies meet the environmental standard.

In addition, Marsudi added, the palm oil plantation had helped helped millions of people escape from the poverty.

Meanwhile, the Malaysia’s government already take an offensive reaction on this issue. Plantation Industry and Commodities Minister Datuk Seri Mah Siew Keong last March said the ban will disturb the EU-Malaysia free trade agreement negotiation.

“Malaysia can only sign on a free trade agreement with the EU, if the deal is mutually beneficial. As long as the EU continue to discriminate against palm oil, it violates the essence of free trade,” Mah said, as quoted by The New Strait Times.

The Malaysia’s government viewed the palm oil ban as a discrimination against the poor people in Malaysia and Indonesia. He explained palm oil ban will hit the livelihoods of more than 650,000 smallholders living in rural Malaysia.