EU deforestation regulation will ‘increase poverty’, claims Indonesian Palm Oil Association

By Oliver Morrison contact

- Last updated on GMT

Palm oil plantation at the edge of tropical rainforest. Image: Getty/Cn0ra
Palm oil plantation at the edge of tropical rainforest. Image: Getty/Cn0ra

Related tags: deforestation, Palm oil

Ahead of this week’s trilogue negotiations on the EU’s Deforestation Regulation, the Indonesian Palm Oil Association (IPOA/GAPKI) has complained the legislation “will increase poverty, decrease sustainable development, and undermine decades of progress for rural communities and exclude vulnerable groups”.

The so-called trilogue discussions aim to agree the final text of the regulation, which was approved by the EU Parliament in September.

The new law would make it obligatory for companies to verify that goods sold in the EU have not been produced on deforested or degraded land anywhere in the world. This would guarantee consumers that the products they buy do not contribute to the destruction of forests, including of irreplaceable tropical forests, and hence reduce the EU’s contribution to climate change and biodiversity loss. The financial sector too will have to abide by a set of rules preventing products linked to deforestation from entering the EU market. 

Influential campaigners such as the WWF support the legislation. It said the vote in September sent “a strong signal towards EU Member States that the European Parliament is prepared to take responsibility for the EU’s destructive footprint on nature, as well as the related human rights violations”.​ However, it wants the scope of the legislation to go beyond forests to also include bushland, shrubland and other wooded land, which means that large parts of the Brazilian Cerrado will be covered, and grasslands and wetlands such as the Pampas or the Pantanal which it says are still at risk of facing increased pressure of being destroyed through EU consumption. 

But in many producer countries of commodities such as palm oil, however, there are fears the regulation will drive up the cost of palm oil and other commodities, and thus raise food and beverage prices in Europe, whilst heavily impacting small holder farmers who are ill-equipped to deal with the changes.

“The EU’s Deforestation Regulation will negatively undermine Indonesia’s palm oil sector and the 4 million small farmers that produce palm oil,”​ the IPOA/GAPKI said. “Indonesian small famers will be blocked from the European market, undermining the economic growth of Indonesia and killing jobs… Either the EU does not understand the existential threat the Regulation will have for millions of small farmers in Indonesia, or it simply does not care. Social justice is ignored, and development policy is abandoned. The EU will lose all moral authority in the developing world if it implements this policy.”

In a letter sent a letter to Virginijus Sinkevičius - EU Commissioner for Environment, Christophe Hansen MEP - EU Parliament Rapporteur on the Deforestation Regulation and Jaroslav Zajicek – from the Czech Presidency of the Council, the IPOA/GAPKI called for the legislation to make small farmers from the regulation’s traceability requirements and accept national and voluntary certification schemes as a form of compliance.

“GAPKI is supportive of the EU’s stated goal to prevent illegal deforestation, and to support sustainable commodities,”​ the letter said. “However, by forcing small farmers out of supply chains, the EU’s current draft Deforestation Regulation will undermine these goals.”

It repeated fears “the EU Regulation will increase costs for business, raise food prices for consumers, and undermine food security,”​ adding, “Small farmers are explicitly targeted by the Deforestation Regulation. As a direct result of this EU regulation, many Indonesian smallholders will lose income, and lose livelihoods. Poverty will rise in rural areas as a result.

“The EU should support Indonesia’s progress. Instead, the EU Deforestation Regulation undermines Indonesia’s progress and chooses conflict instead of cooperation.”

The letter reiterates concerns from opponents of the legislation who claim it that nothing more than a political protectionist tool. “There is serious concern this will be a protectionist trade barrier deliberately targeted at developing nations,”​ it said.

But supporters of the law such as environmental NGO ZERO and European Consumer Organisation BEUC also wrote to EU environment ministers urging them to confirm the deforestation regulation proposals. ZERO claims polls show that eight in 10 consumers overwhelmingly support a strong and ambitious EU anti-deforestation law.

“This law is good for consumers,”​ it said, “because it will keep destruction off supermarket shelves; mandate transparency and traceability; and will protect the Amazon and other critical rainforests.”

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