T

he European Union’s decision to phase out its use of palm oil continues to be a major stumbling block in efforts to upgrade the EU’s dialogue status with ASEAN, as two of the commodity’s biggest producers, Indonesia and Malaysia, have objected to the EU’s “discriminatory policies” regrading palm oil.

At the 22nd Meeting of the ASEAN Foreign Ministers and EU in Brussels on Monday, Deputy Foreign Minister A.M. Fachir said palm oil contributed significantly to the country’s economy and to the achievement of the Sustainable Development Goals (SDG).

“Palm oil is a strategic commodity for Indonesia, especially for small farmers. About 20 million ASEAN people depend on the palm oil industry and more than 5 million small farmers in Indonesia, Thailand and the Philippines depend on palm oil for their livelihoods,” he said in a statement received on Tuesday.

Nearly 90 percent of the world’s palm oil comes from Southeast Asia, mostly from Indonesia and Malaysia. The commodity is one of Indonesia’s most important sources of export revenue, worth US$19 billion annually, with the EU being the second biggest export destination after India. Around half of the EU’s palm oil imports is used for biodiesel.

The EU and relevant ASEAN member states have agreed to form a joint working group to address issues relating to palm oil.

Furthermore, Fachir stressed the importance of trust and respect for the ASEAN-EU partnership, saying mutual trust and respect could be translated into policies that advanced the common interests of ASEAN and the EU, “including by stopping discriminatory policies on oil palm that are counter to the interests of the ASEAN community, especially Indonesia”.

Foreign ministers still “agree in principle” to upgrade the EU’s official status to a new strategic dialogue partner but added that it was “subject to details and timing to be worked out” according to a joint statement issued after the meeting.

In the joint statement, EU commissioner for foreign affairs and security policy Federica Mogherini said such progress was “a recognition of the strategic partnership we already have in many fields”.

The sentiment of the statement was the same as the statement issued by Thailand, the current ASEAN chair, after an ASEAN foreign ministers’ retreat last week.

According to unofficial minutes of a discussion among Indonesian officials obtained by The Jakarta Post, Indonesia and other ASEAN countries would delay the elevation of ASEAN-EU dialogue status, after it was originally scheduled for the Brussels meeting.

The meeting was attended by foreign ministers from all 10 ASEAN member countries, 28 EU member states and ASEAN secretary-general Lim Jock Hoi and co-chaired by Singaporean Foreign Minister Vivian Balakrishnan and Mogherini.

Indonesia is preparing to respond to the EU’s Renewable Energy Directive II targets and its determination of the criteria for high and low risk Indirect Land Use Change feed crops, which critics argue is based on a controversial scientific methodology.

Indonesia has credited the palm oil industry with contributing to the country’s achievement of 12 of the 17 SDGs, from poverty reduction, eliminating hunger to achieving clean and affordable energy.

“Refusing to use palm oil is the same as rejecting the SDGs, which is already a global agreement,” Fachir said.