- Indonesia and Malaysia undertook a series of palm events in Europe
- A ‘no-show’ from EU Commission officials in Rotterdam was a source of frustration
- The events coincided with a ‘pile-on’ on the EUDR from numerous industries
For Indonesian click here
The EU No-Show at SVOC
Palm oil officials and stakeholders undertook a series of events across Europe last week, with the aim of promoting palm oil’s sustainable credentials, as well as pushing for better conditions for the EUDR – and a delay in implementation.
At the Sustainable Vegetable Oil Conference in Rotterdam, the clearest areas of concern were both the lack of clarification on compliance from EU officials, and the potential impact on smallholders.
The frustration around the lack of EUDR information was compounded by the non-appearance of EU officials. Despite committing to an appearance, the European Commission ‘phoned it in’ with a pre-recorded video presentation rather than putting in a personal appearance.
And rather than providing new information, the presentation simply repeated information already available on the Commission website.
The general concern over smallholder impacts stretched from larger companies such as Musim Mas – one of the sector’s clear leaders on sustainability – to NGOs such as Solidaridad.
The general concern was that EUDR has effectively been designed to exclude smallholders rather than try to include them.
This point was underlined by Solidaridad, which at various points said that “the Commission is failing” in terms of getting its guidelines out, and that “EU policies can be neocolonialist”.
The most aggressive take on the EUDR came from Indonesia’s Ambassador to Germany, Arif Havas Oegroseno, who published a pamphlet specifically for the event, ‘Legal Implications and Challenges of the EUDR: How to Decimate Smallholders of the Global South.’ Ambassador Havas wrote:
“EUDR develops the legal framework for the EU to force convoluted and burdensome obligations on others, to receive complaints, to conduct investigations in the EU as well as other countries, to deliver judgement and penalties, and to publish penalties. However, there is no recourse to legally challenge the EU. EUDR only provides the legal basis to challenge Member States, while the EU holds the major role in deciding penalties and judgement, thus providing the EU the opportunity to be “Judge, Jury and Executioner” all at once like the American Old West.”
The EUDR Pile-On Grows
The stakeholder delegation moved to Brussels later in the week for the Third Meeting of the Ad Hoc Joint Task Force on the EUDR. It was a closed-door meeting, but it became readily apparent that criticisms of the EUDR were becoming louder from inside and outside the EU, and from all sectors. And this was on top of the objections from major agricultural groups such as COPA-COGECA, and trading partners such as the US and China.
At the top of the list was German Chancellor Olaf Scholz. As Bloomberg reported:
“To be clear: the regulation must be practicable,” Scholz said on Thursday at a BDZV newspaper lobby congress in Berlin. Scholz said he had personally asked European Commission President Ursula von der Leyen, a former German defense minister, to put the EUDR on hold until issues raised by the BDZV have been clarified.”
At the same time, the German auto industry started raising objections.
“The automotive industry sees an urgent need for clarifications and adjustments to the regulation in order to ensure practical implementation and avoid unnecessary bureaucracy. The current version of the regulation cannot be implemented …
“There is a lack of essential guidance, such as the guidance document announced by the EU Commission, which is intended to help companies apply the regulation. The country benchmarking, which is crucial for the risk assessment of products, has not yet been published by the EU. Without this basic information, companies face a significant additional burden without making any additional contribution to protecting forests.”
So, why are European manufacturers now objecting to the regulation?
It’s important to remember that the printing and publishing industry in Europe doesn’t just import paper, it imports books, packaging and other goods manufactured overseas – all of which fall in the scope of the regulation. It’s worth remembering that the EU imported around USD3 billion of books and other printed materials – much of which will be subject to the EUDR.
For the auto industry, rubber in the supply chain is the chief concern – particularly because the regulation doesn’t, and potentially can’t, distinguish between natural and synthetic rubber.
Adding to the criticism, WTO chief echoed complaints around compliance guidelines, which is leading to uncertainty. In an interview with the Financial Times, she said:
“I want to give the EU credit for listening, coming in and engaging and listening to other members. And I hope that they use the feedback that they’ve got here to relook at the system…”
And, almost on the same day, Brazil’s government wrote to the Commission, stating:
“To avoid any negative impact on our trade relations, we request that the EU refrain from implementing the EUDR at the end of 2024 and urgently reassess its approach to the matter.
“Since the beginning of the legislation’s discussion in Brussels, Brazil has made its position clear. We consider the EUDR to be a unilateral and punitive instrument that disregards national laws on combating deforestation. It contains extraterritorial aspects that conflict with the principle of sovereignty; it discriminates between countries by affecting only those with forest resources; it increases production and export costs, especially for smallholders; and it violates principles and rules of the multilateral trading system as well as commitments undertaken in the context of multilateral environmental agreements.”
So, given the growing objections, does this mean a delay is likely? There are several political calculations that are at the heart of a potential EUDR delay. We’ll go through these in the coming week.