Indonesian Delegates Fly to France to Protest Palm Oil Tax

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  • Workers are seen unloading crude palm oil (CPO) at a port in Cilincing, Jakarta, January 18, 2016. Tempo/Tony Hartawan

    Workers are seen unloading crude palm oil (CPO) at a port in Cilincing, Jakarta, January 18, 2016. Tempo/Tony Hartawan

    TEMPO.CO, Jakarta-Indonesian delegates are flying to France today to protes the plan of palm oil imposition. “I will fly today with the businesses’ representatives and the Trade Ministry,” said the Managing Director of Public Service Agency of Palm Oil Fund, Bayu Krisnamurthi on Monday, February 8, 2016.

    In France, the delegates would be assisted by officers from Indonesian Embassy in Paris to meet the officials of both senates and government of France.

    The measure, according to Bayu, is a follow-up to show Indonesia’s protestation against tax imposition plan on palm oil in France. Previously, Trade Minister has also sent a letter of protest to the French government in relation to the plan. “It is a necessary process to stop policies that would be harmful to us and to make our palm oil image to be more positive,” he said.

    In Biodiversity Law draft, which would come into force in 2017, France government would impose tax on palm oil. In the first year, the tax would be in the amount of 300 euro per ton. The tax would increase to 500 euro per ton in 2018. It would further increase to 700 euro per ton in 2019 and 900 euro per ton in 2020.

    Palm oil tax regulated in Amendment Number 367 as adopted by the French Senate on January 21, 2016, is deemed to have breached the principles of World Trade Organization (WTO) and General Agreement on Tariff and Trade (GATT) 1994. Trade Minister Thomas Limbong said, “It would create price discrimination and could be harmful to Indonesia. I have sent a letter to the French government to help cancel the plan.”

    The palm oil imposition is feared to make palm oil unable to compete in France’s vegetable oil market. CPO price in Europe are currently around 500 euro per ton. Sunflower oil and soybean oil currently reach 650 euro per ton. “If palm oil be imposed with high tax, however, other vegetable oil prices would be less expensive,” said the Head of Palm Oil Council, Derom Bangun.

    If implemented, the policy could also disrupt the economic stability, considering that palm oil is a strategic sector. The sector has approximately absorbed 16 million workforces in Indonesia. In addition, it has also contributed 1.6 percent to Indonesia’s GDP. Indonesia’s export income of the commodity reaches approximately US$ 19 billion per year.


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