The Indonesia-UK Joint Partnership Forum Is a Big Deal for Palm Oil

Last week Indonesia and the UK held a Joint Partnership Forum, led by Indonesian Minister for Foreign Affairs Retno L.P. Marsudi and UK Secretary of State for Foreign, Commonwealth and Development Affairs, Dominic Raab.

Although the meeting didn’t generate significant headlines – any news coverage concentrated mostly on COVID, Myanmar and defence – the meeting and its resultant statement holds significant promise for both Indonesian palm oil, the UK’s ambitions in the region, and how the EU might approach Indonesia going forward.

The statement outlines the establishment of a Joint Working Group (JWG) that will:

“facilitate a discussion on Agricultural Commodities in order to support sustainable production and non-discriminatory, two-way sustainable trade based on mutual respect of national legislation and mutual understanding of standards and certification… It will include consultation on the UK’s due diligence requirements, which will require large businesses in the UK to ensure that the commodities they use have been produced in accordance with relevant local laws. The due diligence requirements will allow for a pathway to recognise different national standards and certification schemes as evidence of that legal compliance.”

For those that have been following the UK’s introduction of a due diligence measure on deforestation related commodities, this is hugely important.

This is the first clear and formal signal from an importing government that it recognises the significance of national sustainability standards, and that it is prepared to work collaboratively – rather than unilaterally – on recognition.

It also makes it clear that London is rapidly beginning to understand how important palm oil exports are to Indonesia, and to reaching any bilateral agreements with Jakarta. This contrasts significantly with Brussels, which is continuing to pursue a ‘my way or the highway’ approach on both palm oil and trade.

London is doing two things here. It is attempting to shore up its ambition to have the UK elevated to ASEAN Dialogue Partner status towards the end of the year. The UK obviously paid attention to Indonesia and Malaysia’s lobbying against the EU’s strategic partner status in 2019. It is also attempting to further its trade ambitions in the region. It completed its Joint Trade Review with Indonesia late last year; the next step is a trade agreement.

This contrasts with the EU. By many accounts, the Indonesia-EU talks have been at an impasse for some time, specifically over sustainability issues. The EU’s lack of ability to compromise on sustainability has been hampered further by its new trade policy document.

If the UK’s pragmatic approach furthers its political and trade ambitions with Indonesia before the EU, it will be a significant embarrassment for Brussels and the ‘assertive’ approach to trade negotiations taken by von der Leyen’s cabinet.

Greenpeace lives dangerously on MOEF and Papua

Greenpeace’s Netherlands-based international arm has made a full-throated attack on the Indonesian government, specifically its handling of forest management and plantation development in West Papua.

Its recent report – which has generally been overlooked by the media – specifically targets the policy initiatives and implementation around forest conservation pushed by both President Jokowi and Minister for Environment and Forestry Siti Nurabaya.

It argues that the policies – particularly the Oil Palm Moratorium – have been watered down and ineffective, and the process of permit allocation has been corrupt.

Greenpeace has two big problems to manage with this report.

The first is that despite Greenpeace’s arguments, Indonesia’s deforestation rates in 2019 were the lowest on record, dropping a full 75 per cent from previous years.

This drop has been lauded by highly credible groups such as the World Resources Institute, which have stated that the drop is also a direct result of these policies and that they should be appreciated.”

Greenpeace’s response to the positive news on deforestation hasn’t been to congratulate the leadership, or even consider that the policies might be working. Rather, they have doubled down on the claim, completely doubting the achievement, stating: “it is counterproductive to make public statements about the country’s supposed achievements.”

The second is that Greenpeace has decided to wade into the political situation in West Papua. It conflates the Indonesian military, government, palm oil sector throughout the report, attempting to link the industry to what is a very sensitive political situation in the Province.

This would appear to be political opportunism at its worst: exploiting a complex and occasionally violent political situation – that has nothing to do with palm oil – in its anti-palm oil campaign.

We think it highly likely that Greenpeace’s attempt to conflate Papua and palm oil will be a part of a broader NGO campaign that will tar Indonesian palm oil with allegations of human rights abuses going forward.

If that’s the case, Greenpeace needs to tread carefully. Arguing the regulations are ineffective is one thing; getting involved in politicised resistance movements is another.

Are Norway’s REDD payments forthcoming?

Indonesia’s reduced deforestation rates may make the case for Norway’s reduced-deforestation payments to Indonesia even more compelling. However, there appear to be some question marks over whether Norway’s last tranche of promised payments are forthcoming.

In May of last year, the Norwegian government approved a payment of $56 million under the country’s REDD program for reduced deforestation and forest degradation in 2016 and 2017. This was widely reported in the media – and on POM – and also prompted Indonesian officials in Jakarta to state that Indonesia was ‘on the right track’.

Palm Oil Monitor understands there have been further delays on the payments, despite completion of verification reports and institutional assessments.

This leaves the ball firmly in Norway’s court. If the payments aren’t made, this will undermine not just Norway’s collaborative approach, but the trustworthiness of any promised incentives for reduced deforestation from Western countries.