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Anti-palm oil campaign worse than expected
Harvest time: A worker gathers oil palm fruit bunches at a plantation in Lampung
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arvest time: A worker gathers oil palm fruit bunches at a plantation in Lampung. Indonesia and Malaysia, the first- and second-largest palm oil producers, have threatened to challenge the European Union via the World Trade Organization if the EU continues to phase out palm oil from transportation fuel. (JP/R. Berto Wedhatama)
The diplomatic effort to counter the negative campaign against Indonesia’s palm oil in the European Union is proving to be much harder than expected, said a senior minister who just returned from a diplomatic mission to end misconceptions about the product.
The massive campaign against the use of palm oil in Europe has derived from a misunderstanding among Europeans that the commodity damages the environment, thus preventing Indonesia and other palm oil-producing countries from getting a fair hearing, Coordinating Economic Minister Darmin Nasution said.
Earlier this month, Darmin co-led a joint mission with delegations from Indonesia, Malaysia and Colombia to the EU to discuss the latter’s policy that could effectively ban palm oil use in the bloc by 2030.
“However, from our numerous discussions with representatives of the EU, we found that their understanding of palm oil [farming] is a far cry from reality,” Darmin told a recent press conference. “Not only do such bad perceptions [about palm oil] already exist among lawmakers, they also exist among citizens.”
He cited as an example an unnamed Italy-based chocolate manufacturer that spent five times as much on campaigns against palm oil as the total advertising budget of Coca-Cola in the region.
Furthermore, the situation was exacerbated by stiff competition from producers of other vegetable oils, such as rapeseed oil and sunflower oil, he added.
Palm oil, rapeseed oil, sunflower oil and soybean oil are included in EU’s recent Delegated Regulation Supplementing Directive 2018/2001 or the Delegated Act, a derivative of EU’s Renewable Energy Directive (RED) II concerning biofuels.
The Delegated Act is based upon the EU’s indirect land use change (ILUC) approach that the Council of Palm Oil Producing Countries (CPOPC) has called a “scientifically flawed concept”, and which includes palm oil as a high-risk commodity in regard to deforestation.
The CPOPC has pointed out that the Delegated Act classifies soybean, rapeseed and sunflower oils as low-risk vegetable oils despite the EU’s own research saying the three were responsible for far more “imported deforestation” than palm oil, which is eight to 10 times more productive than the other three and thus requires less land to cultivate.
Given such classifications, if the Delegated Act gets adopted, palm oil consumption in the EU would be phased out completely, whereas low-risk vegetable oils would still be accepted, albeit with certain caps.
His calls into question the whole Delegated Act and the probability that political and economic protectionism rather than science-based decisions are the true drivers of this Delegated Act,” the CPOPC wrote in its April 8 statement.
The act has passed through the European Commission and is currently with the European Parliament for deliberation before its May 12 deadline, said Darmin.
To counter the negative sentiment, the government has also emphasized the importance of palm oil to the Indonesian economy.
“This industry employs 19 million people and has lifted so many of them out of poverty, so what the EU is aiming for is no joke for us,” said Darmin, adding that poverty alleviation was the foremost objective of the Sustainable Development Goals (SDGs) Indonesia is striving toward.
Nevertheless, Indonesia’s efforts might bear fruit as Darmin said several stakeholders in the EU had proposed that the two entities establish a communication platform to promote positive campaigning for palm oil that would be taken into account in a review of RED II in 2021.
“We will provide them with written campaign proposals and they will come up with revisions to make the proposals agreeable,” he added.
Despite the efforts, Indonesia is preparing to challenge the EU by taking the palm oil dispute to the World Trade Organization’s Dispute Settlement Body (DSB) if it continues to treat palm oil as high-risk.
Foreign Ministry special staff member Peter F. Gontha said the government actually would have no problem if the Delegated Act was adopted. Indonesia simply wants to persuade the EU to classify palm oil as a low-risk vegetable oil as it should be.
“Should this Delegated Act be adopted, Indonesia will undertake litigation at the WTO to challenge the EU [through the DSB],” Peter said.
Darmin confirmed the plan, acknowledging that the EU’s move, as a non-tariff measure, would be harder to challenge.
“Nonetheless, [this is] something Indonesia must do [...] I believe that the Trade Ministry is currently preparing the necessary data and paperwork to proceed with this move,” he said.
