Deputy Minister of Trade Demands Equal Treatment on Palm Oil

TEMPO.CO, Jakarta - Deputy Minister of Trade Jerry Sambuaga, met with the European Comission and European countries executive agencies on Brussels, Belgium to discuss the Indonesia-European Union Comprehensive Economic Partnership Agreement. In the meeting, Jerry reiterated Indonesia's firm stance in relation to the discrimination against Indonesian palm oil products by the European Union.

"It is a little ironic when they [European Union] blocked our palm oil," Jerry said in the Tempo Economic Briefing event at Westin Hotel on Thursday, December 19, 2019.

Jerry said that European Union countries is known for promoting transparency in relation to global trade. However, they are currently barring Indonesian palm oil from entering the region. "If [they are] consistent with international trade, any products should be allowed," Jerry said.

The European Commission had agreed on sustainable environment initiatives stated in the Renewable Energy Directive, or also known as RED II on June 2018. Through the initiative, Europe banned the use of high risk fuel planted on areas previously used for food crops. Palm oil is considered to be part of this high risk fuel.

Jerry expressed his understanding that each country has its own method of protecting domestic producers and consumers. However, Jerry explained that what Indonesia demanded is equal treatment. "Not protectionism," he said.

Jerry asserted that in reality, high number of food producers and consumers relying on palm oil are originated from Europe. Therefore, Jerry said that European Union should not should not impose restrictions based on sustainability argument.

Jerry added that based on further examination, it was noted that the ban on Indonesian palm oil products were resulting from lobbies from politician in the European Parliament. Nevertheless, Jerry said that Europe is only part of a larger palm oil market. "Other countries have waited [to accept Indonesian palm oil]," Jerry argued.

Jerry added that President Joko Widodo or Jokowi, hoped that the negotiation can be completed and yielded results in mid-2020.

Despite having listened to statements of Indonesian officials repeatedly, the European Commission remains on its decision. On Friday, November 8, 2019, Climate Change and Environmental Counsellor of the European Union Delegation for Indonesia Micahel Bucki, affirms the European Union's stance on the issue.

Bucki asserted that palm oil has high environmental risks. "Palm oil has high risk, this is inevitable," Bucki said.

Further, Bucki admitted that the Indonesian government has carried out improvements in the palm oil industry. He added that Indonesia has shown good intentions in reorganizing palm oil management. However, Bucki explained that the European Union considered that there are a number of matters that are yet to be fully implemented, such as legal and registered palm oil plantation.

Bucki also stated that ED II was not intended specifically for palm oil, but also for all biofuel included in the high ILUC (Indirect Land-Use Change) risk category.

Bucki also rebutted the statement of Indonesian government officials that stated that RED II was applied because the European Union does not want their products, such as the sunflower oil and rapeseed to be overtaken by palm oil. "I don't know why they [Indonesian officials] said those things," he argued.

FAJAR PEBRIANTO