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

  • NagaWorld casinos set to reopen, schools to follow

    NAGACORP Ltd has requested that it be allowed to reopen its NagaWorld integrated resorts in Phnom Penh after the government recently approved casinos to operate again, provided they follow Covid-19 prevention measures set by the Ministry of Health. Mey Vann, the director-general of the Ministry

  • ASEM supports Kingdom’s proposal to postpone meeting amid Covid

    The 13th Asia-Europe Meeting (ASEM13) scheduled to be held in Cambodia in November has been postponed until mid-2021 due to the Covid-19 pandemic, a Ministry of Foreign Affairs and International Cooperation press statement released on Saturday said. The decision was made during a two-day meeting

  • Coffee maker roasted for producing fake product

    The Ministry of Interior’s Counter Counterfeit Committee will send a suspect to court on Monday after she allegedly roasted coffee mixed with soybeans and other ingredients, creating a product which could pose a high risk to consumers’ health. On the afternoon of July 2, the

  • Cambodia armed with money laundering laws

    Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday. Comprising nine

  • Schools to be reopened in ‘three stages’

    With guidance from Prime Minister Hun Sen, the Ministry of Education, Youth and Sport, is in the process of reopening schools in three stages. But no timeline has been set, ministry spokesperson Ros Soveacha said on Thursday. Soveacha said the first stage will be to

  • Thai border crossings eased

    The Cambodian Embassy in Thailand said in an announcement on Wednesday that Thailand’s government has allowed certain passengers from several countries to enter its borders. The visitors must go back to their country immediately after their duties in Thailand are fulfilled, the embassy said.

  • Gov’t says tourism recovers slightly despite pandemic

    The Ministry of Tourism and the Phnom Penh municipal administration have recognised 33 tourism businesses in the capital which have consistently implemented safety measures for tourists and adhered to the code of conduct issued by the ministry. Recently, the ministry announced that tourism businesses had to

  • Mull ASEAN border opening, PM urges

    Prime Minister Hun Sen has requested that ASEAN launch a scenario for gradually reopening cross-border travel and trade between countries in the region. He said ASEAN has had more success combating Covid-19 compared to other regions. The prime minister’s request was made at the

  • Ministry reports 11 new Covid-19 cases, reiterates vigilance

    Minister of Health Mam Bun Heng has urged people to continue practising virus prevention techniques after 11 people tested positive for Covid-19 within two days after arriving in the Kingdom. Speaking on Sunday, Bun Heng stressed the importance of washing hands, wearing masks or scarves when

  • Koh Rong land ‘belongs to firm’

    Preah Sihanouk Provincial Administration spokesperson Kheang Phearum told The Post on Sunday that the 35ha being bulldozed by Royal Group Co Ltd in Koh Rong belongs to it after it was leased to it for 99 years by the government in 2008. Phearum said the land does