Palm Oil Monitor – Weekly Update 31st July 2018

Malaysia right to be wary of France

Malaysia’s Ministry of Primary Industries has issued a statement in response to a comment by the French Ambassador to Malaysia, Frederic Laplanche.

Laplanche said, opinion in Europe on palm oil, “is still negative due to concerns on climate change, environmental protection and biodiversity conservation,” and that both governments should work together to allay these concerns.

Indeed, government-to-government cooperation was floated in the recent SNDI document issued by France’s environment ministry.

A close look at France’s track record on being nice to palm oil simply isn’t that great.

Go back to 2012: France introduced the idea of a ‘Nutella Tax’, which was scrapped after a four-year battle.

Go back to 2016: France’s Sustainability Criteria Commission (introduced in the aftermath of the Nutella debate) made a series of recommendations on palm oil. Among them:

  • the EU should take the lead in a possible future EU scheme for sustainable palm oil;
  • the EU should adopt a clear definition of HCS land;
  • the EU should consider a FLEGT-style agreement for all commodities (including vegetable oils).

These look like the current actions around RED.

Go back 12 months and Nicolas Hulot, France’s environment minister, was actively looking for ways to ban palm oil from the RED – and he stated that publicly. The RED ban, of course, was also eventually dropped.

Ambassador Laplanche says it is ‘public opinion’ that is driving French actions on palm oil , but it’s pretty clear from Hulot and others that this extends to the French government as well.

It also needs to be remembered what the ‘public opinion’ actually is. Most French consumers simply don’t have that much of a problem with palm oil. Nutella sales in France are holding up just fine.

When Laplanche is talking about ‘public opinion’, we think he means European farmers, NGOs like Friends of the Earth and Greenpeace and French retail private brands looking for ways to compete with Nutella.

 

Indonesia – EU trade agreement: Progress?

The European Commission has released its report on the fifth round of negotiations with Indonesia that took place in Brussels two weeks ago.

According to the document, the EU side gave Indonesia a briefing on future Renewable Energy Directive regulations going forward. We understand, however, this is probably quite difficult given the complete lack of certainty on where things are headed with how ‘high risk’ biofuels will be defined. As reported earlier, this will incorporate both indirect land use change (ILUC) and high carbon stock (HCS) definitions.

On trade and sustainable development, the EU wrote:

Text consolidation started after a fruitful exchange of views at chief negotiators’ level. Formal text consolidation started and covered provisions of seven articles. On the other hand, further work is required on existing conceptual differences. The TSD negotiators agreed on detailed information exchanges and to work intersessionally on additional text proposals to address some of the specific diverging points.

This is a very nice way of saying that the countries are miles apart when it comes to sustainability.

Similarly, Indonesia has expressed dissatisfaction at the EU’s new system for investment dispute resolution. Indonesia has been antipathetic to dispute resolution mechanisms in international trade agreements. It recently tore up a number of bilateral investment treaties for that reason. This will be a let down for EU investors, who see these sorts of mechanisms as the only way of mitigating the risks of investing in Indonesia.

What does this all mean? Both countries have now laid out offers on tariff reductions and there is also a proposal on rules of origin. This means work is progressing in other areas, but the tough stuff still has some way to go.

 

ISPO and the I-EU trade agreement

Some observers – including Palm Oil Monitor – had hoped that Indonesian Sustainable Palm Oil certification would provide a means of satisfying the European Union’s desire for sustainable palm oil imports.  But this appears to be less and less likely from both the European and Indonesian sides.

ISPO was originally established under the Indonesian Agriculture Ministry. It was effectively a legality verification scheme rather than a sustainability standard and has significantly lower compliance requirements than other standards, such as MSPO, RSPO and ISCC. The ambition – articulated in 2016 – was for it to become a national standard, endorsed by Indonesia’s national standards body.

This didn’t happen.

Instead, the scheme is being ‘revamped’ under a joint project between UK Aid and Kehati, a biodiversity conservation group. Looking at the project documentation, neither group appears to understand how national standards are created and the significance of ISPO membership in the process.

In any trade agreement it will be difficult for ISPO to be recognised as a standard in the strict, technical sense.  It may need to be recognised in a ‘softer’ part of the agreement, such as the Trade and Sustainable Development chapter. Kehati wishes to make ISPO mandatory for exports, with a licensing system similar to that of the Indonesian timber legality standard. This, however, requires a separate bilateral agreement, and a vast array of implementation processes.

In other words, a ‘magic bullet’ for ISPO in the EU-Indonesia agreement is unlikely.

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Palm Oil Monitor – Weekly Update 26th July 2018

EU-Indonesia Negotiations Update

The Indonesia-EU trade agreement negotiations re-started at the beginning of last week in Brussels. The new round comes after what seemed to be an impasse on palm oil and the renewable energy directive. And, as noted last week, European NGOs are already seeking to capitalise on the potential agreement and turn it into an environmental rather than trade agreement.

The prevailing NGO view presents a potentially overdone level of optimism about what the talks might achieve. The question now is what progress was made in Brussels.

Iman Pambogyo, Indonesia’s lead and veteran trade negotiator was reasonably blunt in his assessment of how palm progressed in the talks:

We know, there [is]  good progress in the fifth meeting. Some texts in the chapters are going to be confirmed. Meanwhile about the more sensitive issues or the new issues for Indonesia, we need clarification about what EU wants …

We keep vocalizing our concern about palm oil …  which is always discussed in Europe. We also emphasized the special concern to what happens in Indonesia, such as, in agriculture, fishery, and access to EU markets that is limited by the expensive tariff or the difficult standard that Indonesia is hard to realize.”

This statement doesn’t require reading between the lines: the EU’s standards for fish and agricultural commodities – including palm oil – are problematic.

The European Commission will, as usual, publish a negotiating round report in the next few months. Some matters – the low-hanging fruit – will likely have been resolved. But palm oil will be a problem.

Those who don’t understand trade agreements tend to overlook why parties come to the table in the first place. Indonesia already has reasonable access for palm oil into Europe. It is one of its largest exports to the EU’s northern member states. Why would it even be at the table if it wasn’t able to either improve access or safeguard existing access?

 

Brussels reaches out to KL

The EU’s other big task in the region is re-starting its bilateral talks with Malaysia. These talks were called off in 2012. More recently they were subject to a ‘stocktaking’ exercise.

However, last week, the EU’s Ambassador to Malaysia Maria Fernandez Castillo said:

As the EU already formed FTAs with Vietnam and Singapore, and discussion is ongoing for Indonesia and the Philippines, Malaysia is one important but missing link currently that we urgently want to connect.

Representing the EU, I cannot emphasise more the importance of regional economic and political integration as a key factor in generating economic growth, social inclusiveness, fostering democratic values and ensuring political stability.

This will be a boon for Malaysia if the agreement is completed, and would undoubtedly have widespread business support. The problem may be domestic rather than bilateral to begin with; the new government is reviewing a number of existing trade relationships.

The EU has completed its social and economic impact assessment inception report of a EU-Malaysia deal. There are four major points to note.

First, the EU is going to commission a special report on palm oil as part of its larger assessment: “impacts related to Malaysia’s palm oil sector will be examined, including an assessment of the potential linkages that may arise with the FLEGT Voluntary Partnership Agreement between the EU and Malaysia on illegal logging.” The impact of the agreement on the vegetable oils sector will also be subject to special in-depth analysis.

Second, the report has cited research by the World Resources Institute on Malaysia’s emissions from land-use change. It states:

Special attention, however, should be put on emissions attributed to Land-Use Change and Forestry (LUCF). Estimates by the World Resource Institute reveal negative GHG emissions for LUCF by 129 MtCO2 for 2014 alone. According to this report, unlike in neighbouring Indonesia, Malaysia LUCF’s policy functions as a CO2 sink. Furthermore, unsustainable management of solid waste disposal accounted for 46 per cent of methane emissions, while another 44 per cent of emissions were attributed to oil and natural gas, and 4 per cent to industrial wastewater on palm oil mills.

With that in mind, the case against Malaysia’s palm oil sector as a major greenhouse gas emitter holds very little water. And, certainly, at the national level, excluding Malaysian palm oil from renewables schemes on account of low or negative greenhouse savings is also unconvincing

Third, the above points will tie into concerns that the report raises with certification of palm oil. It cites that stakeholders will be seeking greater levels of assurance from the certification schemes used for palm oil. At the Malaysian Government end, this can only mean one thing: MSPO. This will almost certainly be the default position of the government on sustainability. The clear demand will therefore be recognition of MSPO by the EU, within any trade agreement.

Fourth, any attempts to ratchet up any standards for palm oil will be met with reluctance, particularly from Eastern states. The Voluntary Partnership Agreement (VPA) on timber products between the EU and Malaysia stalled at the end of 2014 for precisely this reason. Peninsular Malaysia and Sarawak had different approaches to the required legality standards for timber products going to the EU, and harmonising them was impossible. This impasse halted negotiations, and EU officials have more than once expressed their frustration. Could a similar thing happen for palm?

 

Palm financiers get attacked

Like a well-oiled machine, Western NGOs have commenced their attacks on financiers of palm oil plantations. The most recent action is from Friends of the Earth (both EU and US), which has gone after the operations of GVL, the Liberian subsidiary of Golden Agri Resources, which is part of the Widjaya family conglomerate. It’s even more surprising, knowing that GAR and GVL are both members of the High Carbon Stock Approach Steering Group; and GAR was part of the group (with TFT and Greenpeace) that has developed the HCS forest concept in 2010. What will be the reaction of Greenpeace and TFT to this report?

The campaign action comes directly after the European Parliament’s DEVE Committee voted in favour of a report to put more pressure on European companies investing in operations that may have some level of deforestation risk.

One of the key recommendations is that: “Both lenders and investors should take public action to support the integration of ESG criteria in investment decisions and support improved regulation of financial services in line with the Paris Agreement and the Sustainable Development Goals.”

To be completely fair, this type of action isn’t anything new. One of the claims is that financiers may be breaching the “OECD Guidelines on Responsible Business Conduct.” This is a tried and true campaign method that NGOs have been using since the early 2000s.

So what’s the real impetus for FOTE’s attack? Probably a very large grant from US foundations. The organisation has received around USD700,000 over the past three years to “to engage financiers of key palm oil companies to encourage better business practices that

reduce deforestation and protect community rights” – among other things.

That money may well have been better spent developing sustainability certification for palm oil smallholders in Africa. It is baffling that such giant funding agreements continue to be signed for what are in effect PR campaigns, when so much is needed on-the-ground to actually improve the lives of farmers – and indeed the environmental management in many poor countries.

 

France launches its ‘imported deforestation’ strategy

France has launched its national strategy to combat imported deforestation. The strategy has emerged almost a year after France’s environment minister Nicolas Hulot announced it. The timing is conspicuous. Originally the strategy was to be launched in March; and it has only been published once the RED matter has been resolved in Brussels. The strategy comprises five components.

  • Developing, valuing and sharing knowledge around the theme of deforestation;
  • Actions to combat imported deforestation to be developed in the framework of international cooperation;
  • Measures that will make public policies a lever to promote a French demand for sustainable products;
  • Promoting and coordinating the commitment of the actors;
  • Monitoring procedures to ensure that objectives are achieved.

The SNDI’s definition of ‘imported deforestation’ is as follows:

The importation of raw materials or processed products whose production has contributed, directly or indirectly, to deforestation, forest degradation or conversion natural ecosystems outside the national territory.

The SNDI doesn’t provide a ‘cutoff’ date that will determine when deforestation is or was possible. When the SNDI does so it will reveal more about their motivations, and will no doubt be subject to intense debate. The policy has been developed to satisfy NGOs arguing against deforestation in the tropics. At no time is a global view considered. One hectare of deforestation for oil palm would free 10 ha of soy or rapeseed in Europe, Brazil or the US, for reforestation.

For example, Mozambique has a percentage of forest cover (68%) and the world’s 14th-largest forest area.  But its human development indicators are low, and agriculture is a major source of employment, livelihoods and deforestation. Will Mozambique’s future agricultural exports be blocked by France’s policy?

Probably the most surprising element of the SNDI document is that it really doesn’t single out a palm oil as a major source of imported deforestation. France’s government has paid close attention to well-established EU research that points out beef, soy and maize are much larger sources of deforestation than palm oil.

However, the strategy itself does appear as though it will be a long-term, publicly funded lobbying campaign against imported products, including palm oil. This is particularly the case given the very broad definition given to ‘imported deforestation’. This broad definition is likely to mean one thing: protectionism. The looser the definition of deforestation, the more imported commodities it can capture, particularly when France finished its own massive process of deforestation more than 200 years ago.

This document has longer term significance. The EU appears to be gearing up to push its ‘Action Plan on Deforestation’ – which has similar objectives, i.e. reducing the ‘deforestation footprint’ of the EU – towards the end of the year. The SNDI document will undoubtedly inform what the EU does next.

 

And finally, The Ecologist …

UK-based portal The Ecologist has published the kind of broadside against palm oil that we haven’t seen since 2008. The authors behind the piece even lay down the Greenpeace-sourced ‘football fields’ meme: “A football pitch sized patch of rainforest is lost every 25 seconds and 24 million hectares were destroyed in Indonesia alone between 1990 and 2015.”

There are several problems with this statistic.

First, the ’25 seconds’ part of the meme fails to mention that this refers only to Indonesia.  Other palm oil producers – such as Malaysia – have stable forest cover. This is well known.

Second, it implies that all of this deforestation is due to palm oil, and this simply isn’t the case.

The statistic is sourced from Indonesian government sources, but it’s only 11 per cent of the story. Here’s what the European Commission published on this earlier in the year:

Estimates for the proportion of deforestation caused by the expansion of oil palm cultivation in Indonesia range from 11% (between 2000 and 2010) to a maximum of 16% (between 1990 and 2005).

And here’s what else they wrote:

…55% of overall tree cover loss within Indonesia between 2000-2015 occurred within legal concessions, of which approximately 1.5 million hectares (one third of the total) was contributed by palm oil. The remaining 45% of tree cover loss took place outside legal concessions.

Implying that palm oil is the main source of deforestation in Southeast Asia – or anywhere else in the world – is simply inexcusable. It is not remotely constructive in the sustainability debate.

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Palm Oil Monitor – Weekly Update 18th July 2018

FTAs and Palm Oil Sustainability

The completion of the RED negotiations means that NGOs are having to move on to other targets in the palm oil debate.

One of the first is the EU’s proposed trade agreements with ASEAN countries.

FERN, a Dutch NGO that has consistently lobbied on forestry and commodities for more than two decades, is now pointing towards the EU-Indonesia FTA as a means of ensuring sustainability for palm oil products going into the EU.

FERN writes:

This could be done by setting up of a binding roadmap on palm oil that would determine measurable objectives, such as improving governance around the allocation of land for palm oil plantations as well as clarifying and securing community tenure rights of forest communities and indigenous peoples. National authorities would need to set up a transparent and inclusive process with Indonesian stakeholders, including civil society organisations, to come up with meaningful solutions.

While this is potentially ambitious and admirable goal for a FTA, it demonstrates a general misunderstanding of both Indonesia and FTAs.

What FERN is calling for here for Indonesia is reform of the relationships between the national, provincial and local-level governments as well as wholesale land reform, both of which would need to take place at the constitutional level. In other words, FERN seems to think that Indonesian national politicians would stake considerable political capital on wholesale reforms that would take power away from provincial and local authorities, just for the sake of a FTA with Europe.  That’s wishful thinking.

When the Suharto dictatorship fell in 1998, the reformasi period that followed rested heavily upon decentralising the concentrating of power that was held in Jakarta. This had some unintended consequences, particularly around forestry. But it made for a more inclusive and decentralised system of government and gave Indonesia’s 300-plus ethnic groups spread over 17,000 islands greater autonomy and made it the largest democracy in East Asia.

FERN is implying that autonomy is less important than the EU’s sustainability criteria for biofuels.

If European NGOs – or other groups – plan to weigh in on the future of political reforms in Indonesia, they should read their history first.

Indonesia effectively called off its negotiations with the EU until the planned palm oil ban under the EU’s RED was resolved. Palm oil is a priority for ASEAN exporters, and no trade agreements will be signed without better market access for palm oil. Now the planned inclusion by Brussels of ILUC & HCS criteria into RED potentially threaten this market access, once again.

 

What the Nestlé Suspension Means

Last week we gave an overview of the RSPO’s European Roundtable (EURT). One thing we didn’t mention was that Nestlé had found itself in the surprising position of being suspended from RSPO. The original suspension occurred three weeks ago, before Nestlé was reinstated this Monday 16th July. The breach of the rules was simple: first, it didn’t file its annual report; second, it didn’t pay its membership; third, it has had a fundamental difference in opinion on what sustainable palm oil actually is: Nestlé had considered that maintaining traceability and a commitment to TFT-style commitments was more important than being 100 per cent certified to RSPO. However, after a three-week suspension, Nestlé has now committed to a new action plan to achieve 100 percent RSPO-certified sustainable palm oil by 2023.

There was a difference of opinion on sustainability; such a difference of opinion may also occur in the process of choosing sustainability systems. For example, Starbucks developed its own sustainability standard instead of choosing to use one from external organisations.

But the response to Nestlé’s suspension was quite remarkable. At last count, just two organisations stated that they would suspend sales of Nestle products: two zoos, one in Melbourne, Australia and one in Chester, England.

There is an interesting comparison to be drawn, here. Compare this rather tepid reaction to previously-witnessed responses when major Indonesian or Malaysian palm producers were suspended by RSPO. A major purchaser, e.g. Nestlé or Unilever, will threaten cancelling contracts or do so immediately. This will be complemented by an NGO campaign calling on all businesses to cease dealing with the producer. This isn’t hypothetical: it occurs all of the time. If there were equity, then major purchasers of Nestle’s palm oil products – such as RSPO members like Tesco – would have refused to stock Nestlé products (just as they had refused to deal with Asian producers who were condemned by RSPO). This did not happen, however.

If there were equity, then Greenpeace would have launched a boycott against Nestlé – as they have done with Asian producers in the past. This also didn’t happen.

This is not to make any assumption about Nestlé’s guilt or otherwise.

The question, rather, is about the double standard that would appear to exist, dependent on whether the accused is a Western multinational or an Asian producer.

One explanation is that this demonstrates the sheer lack of leverage palm producers have within an organisation like RSPO. This isn’t that different to agricultural commodities around the world; more often than not producers are price takers. Policy and product specifications aren’t that different.

The specific case of Nestlé and RSPO has now, apparently, been resolved. However, the broader questions remain. Will palm oil producers begin to ask questions about this apparent differential treatment?

 

ISCC Takes the RED to Task

ISCC, the International Sustainability and Carbon Certification scheme, has weighed in on the post-RED negotiation environment.

Gernot Klepper, ISCC’s chair, has written in Eco Business on the negative ramifications of the current parlous state of the EU’s sustainability criteria.

Klepper is particularly concerned that the EU’s ongoing tinkering with the sustainability criteria will have perverse outcomes that work against the original ambitions of the RED, i.e. reducing emissions.

He notes:

Palm oil producers specialising in exporting to the European biodiesel market will be most hurt.  … these are the producers who have been certified according to the RED and are more sustainable than their competitors supplying to other markets … It sends a clear signal to producers that a more sustainable production is not honoured by the EU.Sustainability certification has had a widespread positive impact by putting social and ecologic aspects higher on the agenda of companies, thus inducing technical progress in processes for lowering the greenhouse gas footprint, increasing awareness about social conditions, and at the end promoting investment for modernising the palm oil value chain.

This kind of clear thinking on sustainability will most likely be lost on EU lawmakers and policymakers. The RED started as a way of propping up oilseed producers as the EU’s quota system ended. The use of imported feedstocks was not envisaged by policymakers. Any perverse outcomes from changes to the system are unlikely to faze them now.

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ICYMI: The Jakarta Post sets the stage for the EU’s continued war on Palm Oil

Last week, The Jakarta Post published an opinion piece by trade and sustainability consultant and Palm Oil Monitor author, Khalil Hegarty. For months the tumultuous, drawn out battle between the world’s top palm oil producing countries, smallholders and the European Union, regarding a ban on palm oil usage for biofuels was heavily covered and assessed by NGOs, European media, and anti-palm oil forces.

As it stands, the European Commission will finalize a methodology in 2019 to determine which biofuels are considered “high-risk.”

“Any “high-risk” biofuels — imported or European — will have their use frozen at 2019 levels, and the commission will then recommend a phase-out strategy for high-risk biofuels, commencing in 2024 and ending in 2030. But “high risk” is yet to be determined. The ‘high carbon stock’ criteria may be carried over from the original RED. Schemes such as RSPO RED and ISCC already comply if that is the case.

ILUC is the true wildcard here. The ILUC debate has been going on for nearly a decade. The concept has been criticized repeatedly for its lack of a robust methodology.”

The debate over the scientific dependency of indirect land-use change (ILUC) and high carbon stock (HCS) will be underway soon, as the anti-palm forces band together once more in a large scheme threat to the EU market and trade relations.

Read the full piece at The Jakarta Post.

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Palm Oil Monitor – Weekly Update 9th July 2018

EURT Roundup

The RSPO European Roundtable (EURT) was recently held in Paris after weeks of lengthy debate around palm in Europe as part of the Renewable Energy Directive.

Although the proposed ban on palm oil biofuels in the Renewable Energy Directive has now been removed, it’s reasonably clear that NGOs and activists in Europe are well-prepared for the next round of policy battles that have emerged from the revised RED text.

Here are our key takeaways from the meeting.

HCS might become a new flashpoint

The compromise RED text indicated that indirect land use change (ILUC) and high carbon stock (HCS) forests will likely have their scope and definitions shifted.

ILUC has always been a contentious point among policymakers. However, MEPs also called for HCS to be redefined under the RED. The existing definition in the RED is from 2008, based on the FAO definition and is quite broad.

It was set well before Greenpeace, TFT and Golden Agri Resources established a new definition in 2010, which then led to the “HCS Approach”, which is a landscape approach that also includes social criteria. We’re going to call this the “Greenpeace Approach.” The threshold for HCS is somewhere between scrub and young regenerating forest, with no well-defined figure to distinguish the two. This is what the Greenpeace-backed HCS Steering Group refers to as ‘no deforestation in practice’ in its HCS Toolkit. And this is what MEPs are pushing.

RSPO is currently reviewing its principles and criteria and there is a proposal to have the Greenpeace Approach used in the new proposed ‘no deforestation’ requirement. This will be voted on in November and apply to any new developments after that date, if accepted.

In other words, there is a push to have Greenpeace’s HCS Approach accepted in both RSPO and in EU regulations. Pressure will mount for either or both to accept the tougher definition.

Greenpeace gets Wilmar, but is that all?

Greenpeace went after Wilmar in a big way at the EURT. The NGO accused Wilmar – which has been one of the poster-children for no deforestation policies – of clearing several thousand hectares of forest in Kalimantan, Papua and Sumatra.

More specifically, the claims are against Gama, a company that has familial links to the Wilmar conglomerate, and that the land was cleared following Wilmar’s adoption of HCSA and its no deforestation, no peat, no exploitation policies.

The company’s commitments were made in 2014; part of that was a ‘deforestation free’ supply agreement with Unilever, the world’s largest palm buyer.

Wilmar founder Martua Sitorus has announced he is standing down as CEO of Wilmar as a result of the report.

This is a big step, but not entirely surprising. This is a story about the world’s largest trader and buyer of the world’s most consumed edible oil. Unilever’s decision to go with Wilmar was based on Unilever CEO Paul Polman’s bigger position on sustainability. The stakes are high for him, too.

Greenpeace will try to capitalise on this further; they will likely state that this is why the Greenpeace HCS Approach is required.

Are national targets the next big battle?

Under the RED compromise, national targets for lower feed- or food-based crops can be set by EU member state governments.

The push for these national targets may already have started, with two policy proposals using the EURT as a backdrop.

First, Le JDD, a weekly French newspaper, ran a conveniently timed article on France’s ‘National Strategy to Combat Deforestation’ (SNDI).

Last year French Environment Minister Nicolas Hulot said that his government would publish the SNDI by March of this year.

According to the article, environmental groups are expecting bigger commitments on biofuels.

Second, the signatories to the ‘Amsterdam Declaration’ met following the EURT meeting in Paris. The Amsterdam Declaration was signed in 2015 by Denmark, Germany, Italy, the Netherlands, Norway and the United Kingdom. Their objective was 100 per cent sustainable palm oil going into Europe by 2020, alongside a ‘zero deforestation’ commitment.

As with the pressure on the French Government’s SNDI, there will be growing pressure on the Amsterdam Declaration countries to set a lower limit for crop-based renewable energy consumption going forward.

 

EU Parliament and UK Updates

MEPs, Commission, Indonesia push back against palm oil bans

Chair of the EU-ASEAN delegation, German MEP Werner Langen, has pushed back against the myriad proposals to have trade restrictions placed on palm oil.

In a lengthy letter to MEPs written last week, he described palm oil as a ‘vital commodity.’

Langen’s criticisms of the actions of his fellow MEPs are myriad, including its potential impact on poverty reduction efforts among smallholders in Indonesia – he points out that around 16 million people in the region are dependent on palm oil for employment.

At the same time, Vincent Guérend, the EU ambassador to Indonesia, said in a statement that the compromise “will not single out, nor ban palm oil … The EU is and remains the most open market for Indonesian palm oil.”

However, one of Langen’s biggest criticisms is this: it will jeopardise EU-ASEAN relations, noting the threats of retaliation coming from Malaysia and Indonesia. This is of critical importance, particularly for Germany, which is trying to expand its export markets for goods and services around the world. Palm oil is also a critical input into food manufacturing in Germany.

Langen supports the RED compromise text, as long as it is WTO compliant. Clearly he understands that it’s not just palm oil exports that at stake.

But the Commission – and the Ambassador — also need to be careful. Tying palm oil to HCS risks will single it out and create a de facto ban.

Indonesia is acutely aware of this. Indonesian Minister for Maritime Affairs Luhut Pandjaitan has laid out their push back. He has planned a meeting in August between oil palm smallholders, the EU and the UN that will examine EU actions in the context of the UN Sustainable Development Goals (SDGs), followed by another meeting in September where the EU policy’s impact on poverty reduction will be examined. Both will feed into the UN climate meeting at the end of the year.

Is the UK washing its hands?

The UK’s Secretary of State for Business, Energy and Industrial Strategy Greg Clark has responded to a letter from the Ambassadors of Malaysia, Indonesia, Thailand, Honduras and Columbia, which was penned in early May.

The original letter – addressed to Boris Johnston – expressed concern that the UK-based MEPs were voting in favour of the palm oil ban.

The response is simple: it simply rehashes what is contained in the compromise text and suggests that the respective Ambassadors get in touch with Brussels.

It is somewhat understandable that the UK government doesn’t want to deal with a problem that Brussels has created. However, the UK has pushed a Brussels-like position by signing on to the Amsterdam Declaration.

The UK has talked about a FTA with Malaysia post-Brexit; at some point it will realise that  improved market access for palm oil is non-negotiable.

DEVE Committee votes on deforestation

The European Parliament’s DEVE Committee almost unanimously supported the report on deforestation and forests in developing countries last week. This was to be expected.

During the Parliamentary session, MEP Heidi Hautala, the key sponsor of the bill, expressed relief that this would finally mean that the Commission and the EU more broadly would commence implementation of the EU Action Plan on Deforestation.

As we’ve noted previously, one of the supporting opinions on the report came from Katerina Konecna, a vigorous opponent of palm oil in the European Parliament and in other forums.

Arguably the oddest thing Konecna has said in this debate is around smallholders. She told the Guardian that she understands the plight of smallholders, but “these smallholders are a slice of big national and international corporations who are responsible for deforestation.” That’s rubbish, and the MEP knows it.

The DEVE is tasked with international development – which includes reducing poverty – but it has just supported a report attacking proven successful tools for poverty reduction (i.e. palm oil and other smallholder agriculture). That irony appears to have been lost on Europe’s Parliamentarians.

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