Jokowi Calls out France; Malaysia’s Responsible Employment Charter Announcement

President Jokowi has issued something of a warning to France on palm oil, just as President Macron is seeking to put the EU’s deforestation regulation at the centre of his election campaign.

Last month France’s foreign minister Jean-Yves Le Drian visited Jakarta with the express intention of promoting maritime and defence ties. President Jokowi stated after the meeting that although both sides are keen to accelerate the completion of the EU-Indonesia FTA the President stated: “I strongly support sustainable trade. But I object if environmental issues are misused to be used as trade barriers.”

Over the next few months, France will become an absolute centre for campaigning against palm oil. There are two key alignments in place: the French elections in April, and France’s EU Presidency in the first half of the year.

As both align, President Macron will be seeking to use both developments to chase the votes of French farmers.  How? By tightening imports of agricultural commodities using the EU Deforestation Regulation.

At a campaign event in Paris last week, Macron’s showpiece environmental policy was the regulation itself. He stated:

“We will [] advance negotiations on the creation of a European instrument to fight against imported deforestation, which will aim to ban imports to the European Union of soya, beef, palm oil, cocoa and coffee when they have contributed to deforestation.”

The Commission’s DG Environment has already stated that it will throw its weight behind the French position. EU Environment Commissioner Virginijus Sinkevičius told a recent meeting of agriculture ministers that “To make substantial progress” Brussels would “strongly support the French presidency and delegations”.

It’s no surprise, then, that NGOs such as the US-based SumOfUs are heading on a recruitment drive for anti-palm oil campaigners – in France.

Labour: A New Direction for Putrajaya?

Last month Palm Oil Monitor participated in a seminar on labour in the Indonesian palm oil sector, alongside representatives from the ILO and others. The upshot was reasonably simple: there is clear ambition for government, labour organisations and the private sector to work more closely and this has given all three some success in Indonesia.

However, this week Malaysia appeared to take some steps towards better engagement on labour, which has plagued the industry over the past few years.

The Malaysian Palm Oil Association (MPOA) – which represents the private sector – announced its ethical recruitment charter. At the core of the document are the ILO and UN treaties on human rights. But the charter also includes an element that hasn’t previously emerged in Malaysia’s labour debate, which is the International Organization for Migration’s International Recruitment Integrity System (IRIS). This specifically attempts to address international labourers – the biggest problem that Malaysian palm oil faces.  

There are two other notable elements.

First, the initiative was launched by the MPOA, which is the most private sector-oriented Malaysian palm oil institution. This seems to represent a change; more often than not it has previously been the government that leads on policy.

Second, the announcement coincided with a visit to southeast Asia by US Secretary of State Antony Blinken. At a press conference following the meeting between Blinken and Malaysian Foreign Minister Saifuddin Abdullah, Abdullah mentioned that the two had discussed the ongoing disruptions to Malaysia’s palm oil exports to the US. He also stated that Malaysia “is committed to ensure that the employees are given what is due both in their salary, in their welfare, in their accommodation, and also that they have sufficient channel that they can freely use to complain.”

Could this be a potential change for Malaysia’s approach? If so, anti-palm oil campaigners shouldn’t count on labour being the next big challenge to exports from Indonesia or Malaysia. Labour has its own set of dynamics that operate very much outside of the environmental campaign sphere.

On the same subject, this week we were reminded that wealthy countries don’t have a clean record, either. The tragic story of exploited labour in Georgia in the US was a clear indication that Western governments need to get their own houses in order too.

The sector in question was, again, agriculture, specifically onions.

It also reminds of the ongoing problems associated with labour in the EU, particularly the treatment of Asian and African migrants working in Italian agriculture, and the unscrupulous practices of Italian labour recruitment firms.

Yes, there may be a significant political appetite in Europe for criticising other countries and curbing imports because of modern slavery, but that appetite can exist in other countries too.

Indonesia and Brazil: A New Alignment?

Brazil’s government and private sector have struck out at the EU’s proposed deforestation rules, with Brazil’s foreign minister immediately calling them protectionist.

In comments to the Financial Times, foreign minister Carlos Alberto Franco França said, “What I can’t accept is using the environment as a form of trade protectionism. It’s bad for consumers [and] trade flows … I think there’s a certain myopia from the EU.”

França also criticised the French government in particular for its subsidies and agricultural inefficiency, noting that agriculture is “increasingly technologically advanced” in Brazil.

The Brazilian Association of Soybean Producers (Aprosoja Brazil) went further, calling the measure “commercial protectionism disguised as environmental concern … [It] is an affront to national sovereignty and puts the conversion of land use allowed into law in the same common ditch of illegal deforestation, which is already punished by Brazilian environmental legislation … The European Union needs to understand that they are no longer the metropolis of the world and that Brazil and other countries in South America are no longer its colonies … Respect our sovereignty!”

The comments from Brazil – the world’s largest soybean producer – indicate an increasing animosity towards EU trade policy. A recent opinion piece by a group of Brazilian academics at the country’s leading foreign policy think tank (OPEB) described the EU-Mercosur agreement as essentially imbalanced, “linked to the interests of dominant sectors of the European economy.”

Brazil’s views echo an increasing sentiment from many developing and emerging economies, particularly palm oil producers, but also producers of cocoa and coffee. The question is, however, can they align?

Both countries have also discussed a potential Indonesia-Mercosur trade agreement. But there is greater potential for political alignment.

Indonesia and Brazil find themselves in a similar position. Just as both are finding themselves under threat from the EU’s Green Deal protectionism, both find themselves at the end of trade agreements where the EU is seeking greater market access for investment and manufactured products. And both are finding themselves in a spot where EU domestic politics appears to be holding up completion of the agreements, namely European farmers being unwilling to accept the agreements unless there are additional controls on agricultural imports. This is playing out in France more than anywhere else (see above).

Can the two economies capitalise on this alignment? Governments may not be able to outside of the WTO, but agricultural industries in both countries certainly can.

Analyst: Palm oil should not be a scapegoat

Indonesian sustainability analyst Edi Suhardi has launched a full throated defence of palm oil in a recent article in the Jakarta Post.

The article responds to various criticisms of the Indonesian Government’s decision not to extend the palm oil moratorium.

Suhardi makes three key points that are in line with Indonesia’s broader current approach on palm oil. 

First, “For the benefit of all, the key policy is to prevent future deforestation, not to ban palm oil. It is imperative to improve the productivity and sustainability of palm plantations, enabling them to produce more in the same area.”

Second, “The focus of attention should be on sustainable palm oil development under the Indonesia Sustainable Palm Oil policy which bans the conversion and cultivation of primary forests.”

And finally, “Rather than making palm oil a scapegoat of deforestation, we need to focus on the improvement of forest governance and the enforcement of laws. The government decisions not to extend the moratorium is applauded not only because it shows appreciation for a commodity that has been spurring development in the regions and boosting state revenue but also because it resists pressure from skeptics to further denigrate palm oil.”

In other words: palm oil bans don’t solve deforestation; certification is key to sustainable palm oil; and sustainable palm oil is key to sustainable development.

We couldn’t have said it better ourselves.