Mahendra said the Indonesian government was let down by the sentiments expressed in the internal EU documents. He said the EU discriminated against palm oil exports.

“While the [Indonesian government] considers it pointless and counterproductive to debate the authenticity of the [EU Renewable Energy Directive] RED II-Delegated Act leak or its contents, it is clear that the intention of the EU is to discriminate against palm oil exports by resorting to scientifically flawed findings on high ILUC [indirect land use change] to favor of home-produced rapeseed — as well as excluding soya to avoid retaliation from the United States,” Mahendra wrote in the letter dated Nov. 6.

The disclosed documents may strain the prolonged deliberations on the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA).

“In the interim, and in light of the disclosed documents on EU policy, the government of Indonesia will review the chapter on sustainable development in the CEPA and you will be informed accordingly once this revision is complete,” Mahendra wrote.

“These revisions will be made in a genuine spirit of good faith, but the past modifications proposed by the EU will evidently deserve closer attention and scrutiny,” he added.

Mahendra was not available for comment at the time of writing.

The European Commission decided in March to phase out the use of biofuels, one of the derivatives of palm oil, by 2030, citing concerns that cultivation of the crop was causing deforestation. The decision sparked a trade spat between the EU, one of the world’s top palm oil importers, and producers Indonesia and Malaysia.

President Joko “Jokowi” Widodo assigned Mahendra to “secure the sustainability of the palm oil industry” when Mahendra was appointed deputy foreign minister in October. Jokowi’s brief prioritized “neutralizing the EU’s unfriendly position” against Indonesian palm oil.

The exposé on the website Palm Oil Monitor combed through several internal documents, including a hand-signed letter of legal advice from EU director general for trade Jean Luc Demarty to director general of energy Dominique Ristori regarding the European Parliament’s (EP) proposal to exclude biofuels and bioliquids derived from palm oil — but not those derived from other vegetable oils — from RED II by 2021.

In the document, Luc Demarty assessed the possible implications of such a proposal on the policy’s compatibility with World Trade Organization law and trade policy.

“From a trade policy perspective, the EP proposal raises substantive concerns, both in terms of compatibility with the EU’s obligations in the WTO and of trade relations with palm oil-producing countries,” Luc Demarty noted in the letter dated Mar. 23, 2018.

“Broader impacts on trade relations could also be expected, notably with regard to the possible adoption by palm oil-producing countries of retaliatory measures against EU products or the risk of jeopardizing negotiations for Free Trade Agreements [FTAs] with Indonesia and Malaysia.”

Palm oil, a key crop for Indonesia, generates significant foreign exchange revenue and makes up between 1.5 and 2.5 percent of the country’s gross domestic product. Smallholder oil palm farmers account for more than 3 million hectares of land in the country.

“We wish to remind the EU of the importance of negotiating in good faith, trade and investment based on mutual interests, reciprocity and perhaps most importantly mutual respect,” Mahendra remarked in the letter to Malmström.

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