May 25, 2019

Indonesian ambassador in US blasts EU on palm oil stance

In the picture H.E. Ambassador I Gusti Wesaka Puja, Anton Lutter, H.E. Ambassador Mahendra Siregar . Photography by A. Lutter.

By Anton Lutter.

The newly appointed ambassador of Indonesia at Washington DC H.E. Mahendra Siregar made an impressive speech during a meeting organized by the Indonesia Nederland Society at the senatebuilding in The Hague on the 4th of April.

Former minister of Defense and senator Dr. Willem van Eekelen chaired the meeting which – among many others – was attended by the president of the senate Mrs. Ankie Broekers-Knol and the Indonesian ambassador to The Netherlands H.E. I Gusti Anak Wesaka Puja.

Indonesia Ambassador to Washington DC H.E. Mahendra Siregar.

Ambassador Siregar, previously executive director of the Council of Palm Oil Producing Countries (CPOPC), intended to speak frankly and so he did: 

“the EU Commission with the full support of member states and various vested interests have decided to adopt a Delegated Act (DA) under Renewable Energy Directive (RED) II that will phase out and ban the use of palm oil in the EU biofuel sector no later than 2030. Calls are growing within Europe for an immediate ban on palm oil classified as high-risk of Indirect Land Use Change (ILUC). Certain EU member states such as France have revealed the mercantile approach of Europe by demanding that their private sector, especially the Hydrogenated Vegetable Oil/HVO Industries (also known as the advanced or next-generation biofuel), stop sourcing palm oil in favour of rapeseeds”. 

The prohibition of crude palm oil will hit at least 16 million people many of them labourers, probably losing their jobs and creating social tensions. Indonesia is the largest palm oil producing country and these EU policies will have a significantly effect on the almost 4 million Indonesians working on oil palm plantations. At the same time it’s obvious the ban on palm oil will protect the EU market of its oils like sunflower and rapeseed oil, which the Indonesian government qualifies as discriminatory.

Siregar argumented that:

“The grounds being used against palm oil do not bear close scrutiny. The DA of the European Union establishes criteria that deliberately discriminates against palm oil. Amongst others: 

a. Loss of biodiversity is assessed on the period 1989-2003 projected for 2008 and 2015 conveniently ignoring the dramatic decline in forest clearance witnessed in Indonesia in 2017 as result of the moratorium applied by the Government;

b. Palm oil from low carbon lands which has less carbon emission than soy and rapeseed is still classified as high ILUC;

c. Ignores the fact that palm oil contributes less to bio diversity than other vegetable oils on a per unit/area basis as 6% of global land devoted to palm oil produces 38% of vegetable oil output;

d. The ILUC scheme adopted by the EU is unilateral in nature and is widely accepted to be scientifically flawed; and it is not a genuine response to environmental challenges in the biofuel sector as less than 4% of the global land mass used for the cultivation of vegetable oils is destined for the biofuel sector;

e. The acknowledgment by the European Commission that the DA is not supported by an impact assessment further undermines the credibility of the approach adopted.

We consider that a ban on palm oil would significantly accelerate the loss of biodiversity associated with the cultivation of soy and rape seed. This discriminatory approach does not contribute to addressing the global challenges of meeting vegetable oil demand which is expected to rise from 165 million tons in 2013 up to 310 million tons by 2040. In fact, a reduction in palm oil would simply displace and significantly accelerate the loss of biodiversity elsewhere”.

Earlier the coordinating minister overseeing maritime and natural resources Luhut Pandjaitan, warned that under these circumstances Indonesia could leave the Paris climate accord. Indonesia has at the same time committed to significantly reduce its greenhouse as emissions while adopting sustainable policies which would boost its economy. 

A variety of responses will be contemplated by the government of Indonesia. the ambassador put them clearly on the table at the fully packed meeting in the senate building. Amongst the many possible options:

“Along side our commitment to address environmental concerns, the discrimination exercised against palm oil, which is politically motivated, should receive an adequate and commensurate response. Indonesia, along with other palm oil producing countries, should consider imposing limitations on the imports of rapeseed and other products from Europe that contribute to high levels of CO2 emissions to include dairy, meat products and wines. 

Those EU member states that have been the most vociferous against palm oil should be targeted for appropriate retaliation; and this should be coordinated with the major palm producing countries and within the ASEAN. Recourse to the WTO will be undertaken against the EU to address the blatant discrimination exercised”.

Concerning The Netherlands ambassador Mahendra Siregar had a strong and clear message:

“We believe that the Dutch Government should support the case of Indonesia and other palm oil producing countries by fully rejecting the Delegated Act. Being low key and passive on this matter, is not only a wrong option but also very risky for the Netherlands”.

He noted with regret “that the Government of Netherlands is considering not to oppose the implementation of the Delegated Act. Although the Netherlands recognizes the discriminatory nature of the DA in terms of soy, palm oil producing countries also consider that DA is intended to promote EU rapeseed consumption in the biofuel sector by freezing the imports of palm oil at a time that the capacity of HVO production in Europe is entering on stream”. 

The important question for the EU and The Netherlands – the latter being a large refiner and distributor of palm oil and as one of the largest traders of agricultural products worldwide – 

“Should Indonesia and other palm oil producing countries follow Europe and apply an ILUC system on canola oil, dairy and meat products? Should our Ministers also instruct our Industry to stop importing from Europe using the example of the French Government, which demanded that Total SA biofuel facility in La Mede, France cease sourcing pam oil and instead use rapeseed?”.

The answer could have a significant impact on the global economy and multilateral trading! 

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