Hasan Kleib: Indonesia Upbeat to Win Palm Oil Case at WTO

JAKARTA, SAWIT INDONESIA – The European Union (EU) issued in 2019 a policy called Renewable Energy Directive II (RED II) which is considered as a political step to discriminate Indonesia’s palm oil production. Based on the RED II, palm oil cannot meet the EU standard as it causes deforestation and in high risk of indirect land use change (ILUC).

The RED II will hinder exports of palm oil and other palm oil based products from Indonesia to European countries. The Indonesian government has filed a lawsuit against the EU policy at the World Trade Organization (WTO) in December 2019.

Hasan Kleib, permanent representative of Indonesia to the United Nations (UN), WTO, and other international organizations in Geneva, said recently that he is optimistic Indonesia will win the case at the WTO.

“The Indonesian government has several times raised the issue of RED II as an issue of specific trade concern during the meetings of WTO. But unfortunately, the EU has always stated that the RED II policy has been in line with the prevailing regulations of WTO,” Hasan Kleib told a #INApalmoil webinar on palm oil and neocolonialism agenda, which was organized by the Indonesian Palm Oil Association’s (GAPKI) Communication Forum recently.

He said that Indonesia had also sued EU for its another policy called the delegated act and French fuel tax, which all discriminate Indonesia’s palm oil production.

The failure of negotiations between EU and Indonesia has prompted Indonesia to file the lawsuit at the WTO, hoping that the EU will revise the discriminative policies.

He said that Indonesia needs to strengthen its diplomacy of palm oil. To facilitate such diplomacy, the country should provide all necessary information on the positive impacts of palm oil to the economy, society, and environment, not only in Indonesia but also in other producing countries and consuming countries.

“If Indonesia wins this case, then the EU will have to revise its policies of RED II, delegated act and the French fuel tax according to the prevailing regulations applied by WTO. If EU fails to comply with the requirement within agreed time, Indonesia has the rights to retaliate,” said Hasan.

Denying EU
The RED II policy bans the use of palm oil as raw material to produce biofuel as it is categorized as having high risks to cause indirect land use change (ILUC). The category is reportedly based on the indicators of carbon emissions that caused by the land use change by setting the cut-off date in 2008.

Meanwhile, France had unilaterally applied its policy of French fuel tax for production of biofuel which is categorized as sustainable energy source. But by referring to RED II, the palm oil is exempted from the tax incentive.

Gapki Deputy Chairman Kacuk Sumarto told the webinar that the cutoff date set by the EU in 2008 is not fair as it has no scientific basis. During that time Indonesia is developing its agriculture and plantations, which include oil palm plantation, while the EU and US have done it long time ago and as a result had also caused deforestations.

Based on the Roser research (2012), during the period of 1700 – 1900 deforestations were massive in temperate regions, including in Europe. The deforestations were first inflicted in European continent and later in North America and other global parts, causing the reduction of natural forests and the biodiversity.

The Guardian reported that the CO2 content in the atmosphere or greenhouse gas (GHG) was kept stable at 280 ppm for 800 years until the industrial revolution. Since the industrial revolution until 2013, the CO2 content in the atmosphere increased by 40 percent to 400 ppm.
Kacuk noted that all of the facts have denied the accusation that the deforestations were mainly caused by the oil palm industries.

Yanto Santosa, a professor of forestry science with the forestry faculty of Bogor University of Agriculture (IPB) said that based on the research of the European Commission in 2013 the global total deforestations reached 239 million hectares, of which 58 million Ha caused by animal husbandry, 13 million Ha by cultivation of soybeans, 8.0 million Ha by corn cultivation, and only 6.0 million Ha or 2.5 percent of the total deforestations caused by the oil palm industries.

Yanto further said that actually of the total 6.0 million deforestation for oil palm around 22 percent were converted from secondary forests or not virgin forests, while the rest from bare lands, shrub lands, swamp areas, rubber plantations and others.

In terms of reduction of the greenhouse gas emissions, the palm oil based biofuel can exceed the level set by the EU at 35 percent in RED I and 65 percent in RED II. (*)

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