The European Union, while bent on curbing deforestation and other negative impacts of palm oil cultivation, is aware that the crop plays an important role in the economies of producing countries and their battle against poverty, and therefore it is open to dialogue with producing countries to ensure sustainable production of the commodity.
“The EU attaches great importance to international dialogue and cooperation with both consumer and producer countries and to the need to explore common solutions to the problem of deforestation and tropical forest degradation, having regard to its various drivers, including agricultural expansion linked to a variety of commodities,” the Delegation of the European Union to Indonesia said in a written reply to questions from The Palm Scribe.
In the reply, the delegation said that the European Commission considered that palm oil production had to be addressed in a balanced manner, as it presents both opportunities and challenges.
At current production levels, the Indonesian palm oil industry generates around $20 billion a year in exports, the Indonesian Oil Palm Plantation Fund Management Agency said. With plantation area currently at 11.9 million hectares, the industry directly employs four million people in cultivation while providing an estimated 12 million downstream jobs as well as having other important multiplier effects.
The delegation said that the European Commission believes that it was essential to cooperate and support the efforts of producer countries to minimize deforestation and other negative impacts that palm oil cultivation can have so that sustainable production and consumption of this commodity could be achieved.
“In this context, the EU is interested in the efforts made by countries, such as Indonesia, to strengthen the sustainability of palm oil production and looks forward to further exchanging and working together on this matter,” it added.
The delegation said that it also acknowledged that other vegetable oil crops have a lower productivity and would, therefore, require more extensive use of land and other inputs, and stressed that EU policies and measures on sustainable development are not product-specific but may be relevant to palm oil.
A 2013 report by Oil World showed that in terms of average productivity per hectares Palm oil was way ahead of other oilseeds, producing almost four tons per hectare per year. Rapeseed, sunflower and soybean each produce less than one tons per hectare per year.
The report also said that oil palm accounted for 5.5 percent of global land use for cultivation but produced 32,0 percent of global oils and fats output in 2012.
“These policies and measures are not discriminatory: they apply to EU-grown vegetable oils as well as imported ones,” it said, stressing that the EU itself does not have specific sustainability criteria for palm oil.
However, in April this year, the European Parliament issued earlier a Resolution on palm oil and deforestation that put forward a number of calls for action to the European Commission, the EU executive body, and to member states, including a proposed commitment to “sourcing 100 % certified sustainable palm oil by 2020”.
The delegation said that this Resolution is not binding and is not part of a legislative process.
“The Commission considers this Resolution as a useful contribution to the broader debate on these matters, which the Commissions believe should also fully involve producer countries,” the delegation added.
In its reply to the EP Resolution, the Commission according to the delegation noted that the existence of different certification schemes may better allow addressing national specifics or consumer preferences.
Accordingly, the Commission considers that work on certification should build on existing initiatives and is interested in continuing to work jointly with palm oil producer countries to see how existing certification scheme, such as the Roundtable on Sustainable Palm Oil (RSPO) or the Indonesia Sustainable Palm Oil (ISPO) that is now mandatory for palm oil producers in Indonesia, could best be strengthened.
“EU institutions and stakeholders welcome an open and transparent dialogue with producer countries and private sector initiatives, also with a view to shared commitments such as the Paris Agreement, or the 2030 Sustainable Development Goals,” the delegation said.
The delegation said that the European Union, also said it was open to considering a good framework to address the root causes of concerns over sustainability impacts of palm oil production, its ongoing negotiations on a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia.
“The EU remains interested in exchanging views with Indonesia on how to best address this issue in the FTA/CEPA, as well as on the next steps Indonesia intends to take towards achieving its objective of 100% sustainable palm oil value chains by 2020,” it said.
It cited the experience with the Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreements and the EU Timber Regulation can certainly provide a useful set of lessons learnt for both producer countries and the EU. However, the delegation added that the feasibility of following a similar approach for palm oil or other agriculture commodities would need to be assessed very carefully.
The European Commission also pointed out that under existing systems, including RSPO and ISPO, the coverage of independent smallholders remained so far marginal. This meant that smallholders, which according to official figures account for some 40 percent of Indonesian palm oil plantation, had no or limited access to international certified markets.
“EU is open to having such a conversation on most effective and efficient ways to demonstrate and reward sustainability, and on how governments, buyers, traders, and various kind of producers should bear the costs (financial or liabilities), but these are the first and foremost market and governance issues,” the delegation said.
It pointed to the experience with the FLEGT process for timber and wood, which was pinned on the need for interactive, transparent consultations between a broad diversity of interest groups along the supply chain. Such consultations are discussing from pragmatic, cheap, manageable solutions at farm/plantation level, down to solid means of proof to secure market acceptance on the demand side.
The Indonesian government, recognizing the growing role and importance of smallholders in the national palm oil production, is now trying to upgrade their productivity, currently very low, by replanting with superior seeds. RSPO and ISPO are also working on a bridging mechanism to allow smallholders access to sustainability certifications.