JAKARTA, SAWIT INDONESIA – The Council and the European Parliament on Dec. 6 reached a provisional deal on a proposal to minimize the risk of deforestation and forest degradation associated with products that are imported into or exported from the European Union. The agreement is provisional pending formal adoption in both institutions.
In an apparent defense against the critics who have from the outset attacked the deforestation label as discriminative against palm oil, the EU argues that the policy also will be enforced for all commodities and their derivatives that play a substantial part in deforestation such as beef, cacao, soy, timber and rubber.
But Joko Supriyono, Chairman of the Indonesian Palm Oil Association (GAPKI) commented on Wednesday “The EU proposals on traceability, small farmers, and risk profiles clearly go beyond what is necessary and reasonable to guarantee sustainability. It would make the EU an outlier in refusing to support Indonesia’s record-breaking environmental progress, and put the EU directly at odds with the 2030 U.N. Sustainable Development Goals. We urge the Council and Commission to be the voices of reason.”
The EU argues that the rules aim to ensure that when consumers buy these products, they don’t contribute to further degrading forest ecosystems. The provisional agreement sets mandatory due diligence rules for all operators and traders who place, make available or export the commodities.
The co-legislators set the cut-off date of the new rules at Dec.31 2020, meaning that only products that have been produced on land that has not been subject to deforestation or forest degradation after 31 December 2020 will be allowed on the Union market or to be exported.
In an attempt to clarify the many polemics about the deforestation-free label, the Council and Parliament also agreed to set a definition for deforestation, based on a definition from the Food and Agriculture Organization (FAO). They set an innovative concept for the definition of ‘forest degradation’ meaning the structural changes to forest cover, taking the form of the conversion of naturally regenerating forests and primary forests into plantation forests and other wooded land and the conversion of primary forests into planted forests
The co-legislators agreed on stringent due diligence obligations for operators, which will be required to trace the products they are selling back to the plot of land where it was produced. At the same time, the new rules avoid duplication of obligations and reduce administrative burdens for operators and authorities. It also adds the possibility for small operators to rely on larger operators to prepare due diligence declarations.
The caveat, though, is that the Council and Parliament also agreed to set up a benchmarking system, which assigns to third and EU countries a level of risk related to deforestation and forest degradation (low, standard or high). The risk category will determine the level of specific obligations for operators and member states’ authorities to carry out inspections and controls.
Authorities will be required to conduct checks on nine percent of operators and traders trading products from high-risk countries. Checks also will be required for nine percent of the quantity of each of the relevant commodities and products from high-risk countries. Checks for commodities from standard and low-risk countries are set only at three and one percent, respectively.
The biggest question then is who or which independent organization will be authorized to set the benchmarking system and what are the principles and criteria used for the benchmarking that are also agreed or accepted by producer countries.
However the benchmarking system will be set up, palm oil producers, notably Indonesia, the world’s largest producer with an annual output of over 50 million tons, will most likely be classified as a high-risk country of origin or supplier. The perpetual negative campaign against palm oil over the past three decades staged by major green NGOs in Europe and the United States, blaming this commodity as one of the main drivers of deforestation in the agricultural sector, has unfairly built-up bad public perception of this commodity.
The high-risk classification will become a big barrier to enter the international market because it will add huge administrative burdens not only for hundreds of oil palm companies and millions of smallholders but also the producers of palm oil derivatives as well as traders dealing in these products.
Even though many surveys by independent non-profit research groups such as Chain Reaction Research and Global Canopy, have concluded that deforestation from palm oil has fallen to its lowest level ever, the bad perception still lingers on.
The EU’s aggressive campaign against palm oil simply still does not make sense. The widespread use of palm oil removes the need to use other vegetable oil products, almost all of which are worse for the planet.
Researchers have found that making the switch away from palm oil to other edible oils, such as sunflower, rapeseed, soybean would, in fact, increase deforestation. Production of these other oils is much less land-efficient, needing between six and ten times more land to yield the same amount of oil, which would require more deforestation.
In fact, palm oil currently fulfills 45 percent of the world’s vegetable oil demand, and rising steadily, while occupying only six percent of the land used for the production of vegetable oil. Curbing palm oil imports would therefore be destructive and short-sighted.
At a time of inflation and a rising global cost of living due to the energy crisis and disruption in vegetable oil supplies due to the Russian-Ukraine war, forcing the most commonly used and most land-efficient vegetable oil out of the market will only accelerate already rapid increases in food prices.
As energy bills soar and millions of families around the world struggle to make ends meet, artificially inflating the price of food by meddling in the vegetable oil market, as the European Union seems intent on doing, is utterly unwise.
Worse, the introduction of deforestation-free criteria without due consultations with the affected parties, such as producers and smallholders only showcased the sense of superiority of the self-centered EU market.
Such unilateral acts have deliberately compromised the basic principles of ethical and sustainable trade by disregarding the social impacts on and human rightsof the affected farmers in the producing countries. On the other hand, the palm oil producing countries, particularly Indonesia, need to diversify their market outside the EU countries such as China, India, Pakistan, by introducing robust sustainability standards accepted by both producers and consumers.
Further, we need to have a global sustainability standard applicable for all commodities based on a common platform universally agreed, such as Sustainable Development Goals (SDGs), which have been recognized and adopted by all nations. (*)