Logo of Phnom Penh Post newspaper Phnom Penh Post - Indonesia takes EU to WTO over ‘discriminatory’ palm oil policy

Indonesia takes EU to WTO over ‘discriminatory’ palm oil policy

Content image - Phnom Penh Post
A worker gathers oil palm fruit bunches at a plantation in Indonesia. AFP

Indonesia takes EU to WTO over ‘discriminatory’ palm oil policy

Indonesia added fuel to its ongoing feud with the EU last week by filing a lawsuit to the World Trade Organisation (WTO) against the bloc’s palm oil policy, which Indonesia has deemed discriminatory to its palm oil sector.

Trade Minister Agus Suparmanto said authorities sent an official request for consultation on December 9 to the EU to initiate the lawsuit against the latter’s Renewable Energy Directive II (RED II). He said the government made the decision after conducting a scientific study and consulting with stakeholders in the palm oil sector.

“With the lawsuit, Indonesia hopes the EU will promptly change its RED II policy and delegated act as well as scrap the high-risk ILUC [Indirect Land Use Change] status it has given to palm oil,” added Agus, as quoted in a statement published on Sunday.

The decision came after the European Commission, the EU’s executive arm, adopted the directive last March, which categorises palm oil as an unsustainable product and lays out plans to phase out its use in biofuels by 2030.

Indonesia had previously threatened to take the issue to the WTO, adding that it could either file a lawsuit independently or collaborate with Malaysia, another major palm oil producer.

The lawsuit, Agus said, was a sign of the “government’s seriousness” about “fighting the EU’s discrimination”. He said the RED II policy limited market access for palm oil and palm oil-based biofuel, arguing this jeopardised the country’s palm oil product exports to the EU market.

The ministry’s foreign trade director general, Indrasari Wisnu Wardhana, echoed the minister’s statement.

“The government objects to EU’s decision to end the use of palm-oil based biofuel. Aside from negatively impacting Indonesia’s palm oil exports to the EU, [the policy] will also tarnish the image of palm oil products in global trade,” he said.

Statistics Indonesia data shows that exports of fatty acid methyl ester (FAME), the raw material used for palm-oil based biofuel, to the EU have decreased over the last five years. Between January and September this year, the value of FAME exports totalled $882 million, down 5.58 per cent compared to the same period last year.

Globally, palm oil and FAME exports also dropped 6.96 per cent to $3.04 billion between January and September from $3.27 billion recorded in the same period last year.

In the statement, the ministry’s international trade negotiation director general, Iman Pambagyo, said the government had made similar complaints through the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) working group on trade and investment as well as at a WTO Technical Barriers to Trade Committee meeting. He said Indonesia needed to formalise its objections to the EU policy.

Last week, the government hinted at a possible lawsuit against the EU’s biodiesel tariffs. The bloc imposed the tariffs on December 9 after the European Commission claimed it had discovered the Indonesian government was allegedly providing trade-distorting subsidies to several biodiesel producers.

“The possible steps vary from appealing the decision at the EU’s local courts … to challenging the EU at the WTO DSB [Dispute Settlement Body],” Trade Ministry trade security director Pradnyawati said previously.

THE JAKARTA POST/ASIA NEWS NETWORK

MOST VIEWED

  • Municipal hall releases map detailing colour coded Covid risks by commune

    Phnom Penh municipal governor Khuong Sreng released an official map detailing the red, yellow and dark yellow zones within the city under the new lockdown orders for Phnom Penh announced on April 26. The designation of red, dark yellow and yellow corresponds to areas with high,

  • Phnom Penh unveils rules for post-lockdown transition

    The Phnom Penh Municipal Administration issued a set of detailed guidelines for the seven days to May 12 after the capital emerges from lockdown at the onset of May 6. In the 14-page document signed by municipal governor Khuong Sreng released on the evening of May 5, the

  • SBI LY HOUR Bank Launches Cross Border Money Transfer Service between Cambodia and Vietnam on RippleNet, utilizing DLT

    SBI LY HOUR Bank Plc and Hanoi-based Tien Phong Commercial Joint Stock Bank (TPBank) on Friday launched the first Cambodia-Vietnam money transfer service in real currency via RippleNet, provided by SBI Ripple Asia Co Ltd to provide safe, fast and convenient services. SBI LY HOUR

  • Phnom Penh, Takmao lockdown extended for another week

    The government late on April 26 announced an extension of lockdown in Phnom Penh and adjacent Takmao town in Kandal province for another seven days – or longer if residents do not comply with Covid-19 preventive measures and the community outbreak does not subside – until May 5. According

  • Gov't mulls extension of Phnom Penh, Takmao lockdown

    The Inter-ministerial National Commission for the Control and Enforcement of Lockdown held a video conference meeting on April 25 to review a draft document on the extension of lockdown in Phnom Penh and adjacent Kandal province’s Takmao town. The meeting was chaired by Minister of

  • Gov’t issues guidelines as lockdown nears end

    The government has issued a five-page set of instructions to be enforced when the three-week lockdown of Phnom Penh and adjacent Takmao town in Kandal province ends on May 6. According to an announcement signed by Prime Minister Hun Sen on May 4, the instructions cover a