Economy PolicyTrade

Gov’t to Re-Assess Relations with Countries Supporting Palm Oil Discrimination

The Indonesian Government has announced it will assess bilateral relations with countries supporting discriminatory actions proposed by the European Commission against Indonesia’s palm oil exports, Coordinating Minister for the Economy Darmin Nasution has said.

“If the discrimination against palm oil continues, we are afraid this will affect years of good relations between Indonesia and the EU, especially at this time when we are conducting intensive discussions on Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA),” Darmin said during a press briefing on Discrimination of the European Union (EU) against Palm Oil at the office of the Indonesian Ministry of Foreign Affairs in Jakarta, Wednesday (20/3).

Darmin’s statement came in response to the issuance of the Delegated Act of the Renewable Energy Directive II (RED II) policy which classifies palm oil as an unsustainable “high-risk” ILUC (Indirect Land Use Change) biofuel commodity.

According to him, palm oil is a very important commodity with US$ 17.89 billion export value in 2018. He added that the palm oil industry contributes up to 3.5% of Indonesia’s Gross Domestic Product and provides employment for 19.5 million workers, including 4 million oil palm farmers in it.

Palm oil is also an important part of the strategy to meet the needs of national energy replacing fossil fuels and has an important role in alleviating poverty in Indonesia, he added.

The Minister also revealed the President’s concern on trade and investment relations with the EU if the policy on discrimination against oil palm continues.

Echoing a similar sentiment, Coordinating Minister for Maritime Affairs Luhut B. Pandjaitan stressed that palm oil has a positive impact in reducing poverty. He also highlighted the Government’s commitment to environmental issues.

“We are being discriminated against and almost 20 million of our people, especially the farmers, will be affected. Of course, we should respond to it. We are not a poor country, but a developing one. This is of our national interest,” Luhut said, adding that the Indonesian Government is asking for a full support from the EU business communities to convey Indonesia’s concerns to their governments related to the acts of discrimination.

“Indonesia will continue to collaborate with palm oil producing countries within the CPOPC (Council of Palm Oil Producing Countries) and ASEAN. This effort does not only aim to promote sustainability of palm oil but also to encourage a joint position against the European Commission’s discriminatory actions,” he added.

Luhut further said that the Government continues to make effort to stop the process of passing the RED II Delegated Act to maintain partnership and friendship between Indonesia and the EU, considering that at the moment both parties are trying to expand and improve relations through IEU-CEPA cooperation. (EKON/ES)


Translated by : Fairuzzamani Inayatillah
Edited by : Ridwan Ibadurrohman, M. Ersan Pamungkas

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