The Amsterdam Declaration’s Subtle Shift
The recent European Palm Oil Alliance meeting in Spain brought the Amsterdam Declaration back into the spotlight.
The Amsterdam Declaration was set with great fanfare in 2015. The target set under the non-binding ‘agreement’ back then was for 100 per cent imports of certified sustainable palm oil, i.e. all palm oil exported to signatory countries by 2020 would be CSPO. Signatories included the UK, France, Germany, Denmark, Italy, the Netherlands and Norway. All countries signed in 2015, with the exception of Italy, which signed in 2017. One of the biggest palm importers and users in Europe –Spain – is yet to sign up.
On paper, the rationale of the Declaration was that greater demand for sustainable palm oil in signatory countries would spur sustainable production.
When the Amsterdam Declaration was written, it was a product of the Netherlands Presidency of the Council of the EU. Officials from the Dutch government produced a ‘non paper’ in which they stated that their intent was to have the Amsterdam Declaration included as part of a trade agreement with Indonesia. Dutch officials were seeking to have a common EU position on imports of palm oil.
The EU is still the major market for CSPO, but the 100 per cent target hasn’t been filled according to Amsterdam Declaration representatives. However, we don’t think that’s far off; mandatory national certification schemes likes MSPO and ISPO will likely push the target even closer. There will be some risk for European officials to declare oil certified under either scheme as ‘unsustainable’.
However, Amsterdam Declaration officials also said recently that the key to closing the gap is:
“better harmonization between supply chain initiatives and jurisdictional approaches in countries for examples Malaysia and Indonesia – and to reward those approaches.”
In other words, the Amsterdam Declaration grouping is arguing that if there are greater commitments by exporting governments on sustainability, the gap will be met. Are the promoters of the Amsterdam Declaration arguing that producer countries are not doing enough? Yes, apparently.
It shouldn’t matter – according to the Amsterdam Declaration – that palm oil going from Malaysia or Indonesia to somewhere like China is or isn’t certified under MSPO or RSPO or ISPO. The Amsterdam Declaration, at least on paper, is only about Europe. However, this focus on jurisdictional approach has rather showed the hand of those pushing the Declaration. It makes it clear that the intent is wider – it points to this entire debate being about regulating global palm oil production under a European regulatory approach, no matter where it comes from or goes to.
A couple of conclusions can be drawn.
First, the Amsterdam Declaration is trying to make itself relevant. Its targets have largely been filled. RED regulation has solved – and may tighten up – the ‘problem’ of sustainability in renewable fuels.
Second, Amsterdam Declaration advocates and their allies may consider that public campaigns that shame companies into using CSPO work in their favour. They don’t. They simply end up smearing the industry as a whole and support a narrative taken up by some Parliamentarians in Brussels (and elsewhere) that all palm oil is bad.
Third, and related to this, is that the Amsterdam approach considers the ‘gap’ on sustainable imports to be the problem for palm oil’s ‘image’, and they see the way to solve this is in producer countries. This isn’t the case at all. EU Parliamentarians have made it clear in the RED debate that they don’t like certification: RSPO, MSPO, ISPO or otherwise. This is precisely why there’s a push in Brussels to have all palm oil – certified or otherwise — labelled as ‘high risk’. Even if a 100 per cent target was hit tomorrow, palm oil would still be attacked.
What then is the new goal of proponents of the Amsterdam Declaration? Increasingly, it looks like it will become a vehicle to support EU regulation of agriculture outside of the EU, which the Commission is actively working on.
EU Agreements Progress in the ASEAN Region
The EU has made some progress with various trade and partnership agreements in the ASEAN region.
First, the EU and Singapore signed a trifecta of trade, investment and cooperation agreements. Although this represents a step with the region’s most developed economy, the Singapore agreement is very much about services and investment. Singapore’s economy is dominated by services; with manufacturing (mostly chemicals) making up much of the remainder. Not having to undertake any negotiations on agriculture has made the process relatively straightforward. That said, ratification via the Parliament and member states may present difficulties.
Similarly, the Vietnam-EU trade deal, which was also submitted for approval, will need to get through the Parliament and the member states. There has already been some consternation among EU nations regarding Vietnam’s human rights record.
Finally, the EU also completed a forest law enforcement, governance and trade (FLEGT) agreement with Vietnam. The completion follows a path set by Indonesia, which was signed in 2013. The agreement took another four years to reach implementation stage. FLEGT agreements require an export licensing process that is based on verification of the legality of timber harvesting and processing. Coming up with a FLEGT-style agreement has also been suggested for palm oil exports, though this would be particularly difficult.
The relative ease with which the EU has completed its agreements with Vietnam can be partly attributed to a communist government; when governments have control of all major industries, it’s difficult for large incumbent companies to object – which is often the case in Indonesia.
The EU’s Ace on Imported Biodiesel
The EU has decided not to introduce punitive tariffs against biofuels from Argentina, which are the subject of a countervailing duties (CVD) investigation. The European Commission initially found that the Argentine export industry received subsidies – and should therefore be subject to tariffs when entering the EU. However, the EU has decided to hold off until its investigations have uncovered more information.
The investigation came directly after the WTO declared that antidumping duties imposed on Argentinean and Indonesian biofuels were illegal. It was requested by the European Biodiesel Board (EBB).
EU oilseed producers and processors have – obviously – reacted negatively to the development. The flood of imported biodiesel has given EU processors to cut output.
This will place additional pressure on EU rapeseed and oilseed producers in the meantime.
However, is the EU’s holding off a sign of things to come? It’s quite possible that the EU’s ace is to find a way to block imported feedstocks under the guise of being ‘high risk’ for land use change. The February deadline for the Commission’s ‘deforestation criteria’ is only months away.