EU Certification for Palm Oil.
Smallholders the greatest challenge to Indonesian Sustainable Palm Oil certification
The EU has made a decision to phase out palm oil as a feedstock for its renewable sources of energy under RED ll. This decision continues to be controversial as major palm oil producing countries are challenging it at the WTO. Indonesia filed its grievance with the WTO in December of 2019 which can be tracked on this WTO page. Malaysia has since stated on July 01, 2020 that it will be filing a similar complaint to the WTO.
While the current controversy has its focus on the use of palm oil for EU energy, the EU’s Green New Deal which started out as an ambitious concept to reduce EU emissions to “net zero” by 2050 has also met controversy as questions roil around the “net zero” policies. Criticism of the Green New Deal can be read here, internal conflicts between EU members here but most relevant to palm oil, the WTO and the EU is its obvious discrimination against palm oil.
But if the Green New Deal is to be taken seriously as an EU lead on fighting climate change, the deal must address the EU’s total impact in its imports. As the very vocal European NGO, FERN, puts it in addressing the environmental problems caused by soy production in Brazil:
EU must not sacrifice the Amazon rainforest on the altar of trade with Brazil
An EU certificate for deforestation free imports?
It is obvious that the EU’s unilateral decision to phase out palm oil from state subsidies for renewable energy will not stand up to WTO challenges in light of all the environmental problems caused by its other imports including soy.
What may end up happening is certification, an EU standard which applies to all imported goods from animal feed to energy. The concept of having an EU standard for imported goods has been around for a while but it seems to have been adopted as announced by the European Committee of the Regions. From the EU CoR website:
“ Roby Biwer (LU/PES), Member of Bettembourg Municipal Council, answers six questions on the EU action to protect and restore forests worldwide. In the context of the COVID-19, the rapporteur of the CoR opinion on 'Stepping up EU action to protect and restore the world's forests' calls for a new EU certification scheme and information system that endorses deforestation-free products and short, transparent supply chains. The opinion is to be adopted at the 1-2 July plenary session.”
Pending the outcome of the complaint filed at the WTO by Indonesia and Malaysia, it can be expected that an EU certificate will affect both the import of palm for biofuel as well as non-biofuel uses.
This possibility has not been lost on the palm oil producing countries. Malaysia in particular, has invested heavily into the certification of its palm oil under the Malaysian Sustainable Palm Oil scheme, MSPO and has targeted the end of 2020 to get all of its smallholders certified.
Indonesia is making a similar move to get its smallholders certified under the Indonesian Sustainable Palm Oil scheme (ISPO) The inclusion of smallholders is crucial to reducing deforestation in the Indonesian palm oil supply chain. With an estimated 40% of Indonesian palm oil production under smallholders, their impact on the landscape is well documented. As reported in Chain Reaction Research,
“...financial and land tenure hurdles prevent effective financing of replanting, raising the risk of increasing deforestation in Southeast Asia after a period of declining forest loss.”
Reducing Smallholders Deforestation in Indonesia Will Require Land Tenure
To reduce the threat of continued illegal deforestation by smallholders, the Indonesian government has allocated funding to rejuvenate 500,000 hectares of smallholders plantations. The funds which are being managed by the Palm Oil Plantation Fund Management Agency (BPDP-KS) are part of a wider government scheme to support its palm-based biodiesel program. Through the program, the government has a levy to help finance its palm oil programmes, including subsidies for biodiesel and replanting programmes for smallholders.
The distribution of funds has been criticized as overly heavy for biodiesel producers and not enough for smallholders.
It was nevertheless welcomed by smallholders whose greatest challenge in keeping a farm afloat is the lack of income when aging palm oil farms need to be replanted. The Indonesian Palm Oil Farmers Association (Apkasindo) applauded the increase from 25 million Rupiah per ha to 30 million Rupiah per ha with the Chairman of, Apkasindo, Gulat Manurung quoted as saying:
"But we don't mind as long as the funds are used again to improve many things in the palm oil sector, and we, Apkasindo Oil Palm Farmers, really feel that. Actually, Indonesia is already late in establishing this BPDKS, look at Malaysia, it was decades ago establishing an institution like BPDPKS"
Apkasindo, whose mission is to defend the rights of farmers and improve their livelihoods is an official organization which is not shy about carrying out its mission. The organization fired off a letter of protest to the EU when the latter was contemplating the ban of palm-based biodiesel. More recently, it added the voice of Indonesian farmers to a formal complaint to the WHO’s nutrition advice for adults during Covid19.
On the homefront, Apkasindo has been very vocal about the key issue of land tenure for smallholders. Land tenure poses the greatest challenge in certifying Indonesia’s smallholders. An investigation by the Indonesian government estimated there were over 3 million hectares of illegal palm oil plantations. At the heart of the problem is the issue of land certification. Agrarian and Spatial Planning Minister Sofyan Djalil blames Indonesia’s poor land certification system for land conflicts which have taken place.
Apkasindo has offered up solutions including a “land amnesty” for palm oil smallholders which makes a lot of sense considering the chaotic status of land claims in Indonesia. Recognizing the land rights of farmers especially those with customary claims to lands looks like the first step Indonesia has to take before any aspirations of sustainability certification can take place.
Published July, 2020. CSPO Watch
While the current controversy has its focus on the use of palm oil for EU energy, the EU’s Green New Deal which started out as an ambitious concept to reduce EU emissions to “net zero” by 2050 has also met controversy as questions roil around the “net zero” policies. Criticism of the Green New Deal can be read here, internal conflicts between EU members here but most relevant to palm oil, the WTO and the EU is its obvious discrimination against palm oil.
But if the Green New Deal is to be taken seriously as an EU lead on fighting climate change, the deal must address the EU’s total impact in its imports. As the very vocal European NGO, FERN, puts it in addressing the environmental problems caused by soy production in Brazil:
EU must not sacrifice the Amazon rainforest on the altar of trade with Brazil
An EU certificate for deforestation free imports?
It is obvious that the EU’s unilateral decision to phase out palm oil from state subsidies for renewable energy will not stand up to WTO challenges in light of all the environmental problems caused by its other imports including soy.
What may end up happening is certification, an EU standard which applies to all imported goods from animal feed to energy. The concept of having an EU standard for imported goods has been around for a while but it seems to have been adopted as announced by the European Committee of the Regions. From the EU CoR website:
“ Roby Biwer (LU/PES), Member of Bettembourg Municipal Council, answers six questions on the EU action to protect and restore forests worldwide. In the context of the COVID-19, the rapporteur of the CoR opinion on 'Stepping up EU action to protect and restore the world's forests' calls for a new EU certification scheme and information system that endorses deforestation-free products and short, transparent supply chains. The opinion is to be adopted at the 1-2 July plenary session.”
Pending the outcome of the complaint filed at the WTO by Indonesia and Malaysia, it can be expected that an EU certificate will affect both the import of palm for biofuel as well as non-biofuel uses.
This possibility has not been lost on the palm oil producing countries. Malaysia in particular, has invested heavily into the certification of its palm oil under the Malaysian Sustainable Palm Oil scheme, MSPO and has targeted the end of 2020 to get all of its smallholders certified.
Indonesia is making a similar move to get its smallholders certified under the Indonesian Sustainable Palm Oil scheme (ISPO) The inclusion of smallholders is crucial to reducing deforestation in the Indonesian palm oil supply chain. With an estimated 40% of Indonesian palm oil production under smallholders, their impact on the landscape is well documented. As reported in Chain Reaction Research,
“...financial and land tenure hurdles prevent effective financing of replanting, raising the risk of increasing deforestation in Southeast Asia after a period of declining forest loss.”
Reducing Smallholders Deforestation in Indonesia Will Require Land Tenure
To reduce the threat of continued illegal deforestation by smallholders, the Indonesian government has allocated funding to rejuvenate 500,000 hectares of smallholders plantations. The funds which are being managed by the Palm Oil Plantation Fund Management Agency (BPDP-KS) are part of a wider government scheme to support its palm-based biodiesel program. Through the program, the government has a levy to help finance its palm oil programmes, including subsidies for biodiesel and replanting programmes for smallholders.
The distribution of funds has been criticized as overly heavy for biodiesel producers and not enough for smallholders.
It was nevertheless welcomed by smallholders whose greatest challenge in keeping a farm afloat is the lack of income when aging palm oil farms need to be replanted. The Indonesian Palm Oil Farmers Association (Apkasindo) applauded the increase from 25 million Rupiah per ha to 30 million Rupiah per ha with the Chairman of, Apkasindo, Gulat Manurung quoted as saying:
"But we don't mind as long as the funds are used again to improve many things in the palm oil sector, and we, Apkasindo Oil Palm Farmers, really feel that. Actually, Indonesia is already late in establishing this BPDKS, look at Malaysia, it was decades ago establishing an institution like BPDPKS"
Apkasindo, whose mission is to defend the rights of farmers and improve their livelihoods is an official organization which is not shy about carrying out its mission. The organization fired off a letter of protest to the EU when the latter was contemplating the ban of palm-based biodiesel. More recently, it added the voice of Indonesian farmers to a formal complaint to the WHO’s nutrition advice for adults during Covid19.
On the homefront, Apkasindo has been very vocal about the key issue of land tenure for smallholders. Land tenure poses the greatest challenge in certifying Indonesia’s smallholders. An investigation by the Indonesian government estimated there were over 3 million hectares of illegal palm oil plantations. At the heart of the problem is the issue of land certification. Agrarian and Spatial Planning Minister Sofyan Djalil blames Indonesia’s poor land certification system for land conflicts which have taken place.
Apkasindo has offered up solutions including a “land amnesty” for palm oil smallholders which makes a lot of sense considering the chaotic status of land claims in Indonesia. Recognizing the land rights of farmers especially those with customary claims to lands looks like the first step Indonesia has to take before any aspirations of sustainability certification can take place.
Published July, 2020. CSPO Watch