In its latest move that is considered detrimental to the palm oil business in Indonesia, the world’s largest producer of the commodity, the European Parliament issued in April a resolution to phase out the use of biofuel, which it said has contributed to rampant deforestation.

Speaking at the 40th anniversary summit of the ASEAN-EU cooperation held in Manila on Tuesday, Jokowi tied palm oil production to Indonesia’s effort to abolish poverty, narrow the development gap and create inclusive economic growth in the country.

“The resolution of the European Parliament as well as several European countries on palm oil and deforestation, in addition to various [smear] campaigns [against palm oil products], has not only brought losses to the economy, but also ruined the image of producing countries,” Jokowi said during the meeting as quoted by a press statement.

Malaysian Prime Minister Najib Razak, whose country is the world’s second largest producer of palm oil, reportedly declared his full support of Jokowi’s statement.

Jokowi also pointed out that the livelihood of at least 17 million Indonesians depend both directly and indirectly on the palm oil industry, underlining that 42 percent of existing oil palm plantations are owned by smallholders.

Furthermore, Indonesia has also become more aware of the importance of sustainable palm oil production, giving the EU a reason to halt the its disadvantageous policies, the President said, citing the government-backed Indonesia Sustainable Palm Oil (ISPO) certification.

The certification scheme introduces improved environmental and production standards as proven by 77 different competencies.

As of August this year, 306 out of some 1,200 palm oil producers were already ISPO-certified.

Jokowi’s move follows a series of measures business players and officials have taken to help lift what they consider barriers hampering the trade of palm oil, an ingredients with a wide range applications, such as for food, cosmetics and fuel.

Earlier this year, the Indonesian Palm Oil Association (GAPKI) also pledged to promote sustainable palm oil practices during a forum hosted by the United Nations Development Program (UNDP).

Trade Minister Enggartiasto Lukita recently delivered a threat to the EU, declaring that if the union refused to immediately cease its negative campaign against biofuels, the Indonesian government would take strong action by disrupting import commodities from Europe.

Palm oil has been a crucial commodity for Indonesia, contributing 12.5 percent to the country’s total export earnings of US$18 billion in 2016.

Indonesia has faced recurrent trade issues with the EU over palm oil, which competes with other vegetable oils made in the bloc, such as rapeseed and sunflower oils.

In addition to the EU, the United States has also accused Indonesia of utilizing unfair trade practices, and recently imposed both preliminary anti-dumping and countervailing duties on palm oil products.

GAPKI executive director Fadhil Hasan applauded Jokowi’s statements at the summit, agreeing that the president was firm in expressing his stance over the palm oil dispute.

“This [the statement] is the most fitting one to come from the President,” Fadhil told The Jakarta Post by phone on Tuesday.

Nevertheless, said Fadhil, Jokowi’s statements was bound to trigger consequences, meaning that the administration will now have to follow up on what the President said, both externally and internally.

“With this move, all related ministers should work for more concrete results with European countries and the EU,” Fadhil added.

“The government should also further reinforce the implementation of ISPO [standards] among palm oil producers in the country, so they can keep up with Jokowi’s promises.”

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