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A Big Shift: ASEAN & the EU Set New Path on Palm Oil

This week’s ASEAN-EU Ministerial Meeting (AEMM) resulted in a new path for the palm oil trade between the two economic blocs heralding an end to discrimination and opening the importance of addressing the challenge of sustainability within the vegetable oil sector and most importantly, addressing environmental issues from a holistic point of view, to embrace air, soil and water. This demonstrates the commitment of the ASEAN and EU to meet the overriding and all-embracing environmental challenges being faced  within an objective, non-discriminatory framework of vegetable oils in general and not exercise discrimination against palm oil.

Two events took place that are of note.

1. First, ASEAN and the EU upgraded their relationship from a ‘Dialogue Partnership’ to a ‘Strategic Partnership’.

2. Second, the two blocs set meeting dates for a joint working group on vegetable oils.

The two events are intertwined. At last year’s AEMM in January 2019, the governments of Indonesia and Malaysia lobbied other ASEAN members to block the upgrade of the relationship. This was specifically because of the EU’s treatment of palm oil. This is no surprise, given that palm oil is ASEAN’s largest agricultural export, and other ASEAN members had been feeling some pressure from EU trade policy. At that time, the two sides agreed to a joint working group on “issues related to palm oil.” However, the working group has not met since then.

The result in 2019 was a blow to Brussels, and their strategy to increase cooperation and engagement in the ASEAN. Astute observers within the Commission and key Member State capitols were more than aware that the issue was over palm oil, and nothing else.

This year, the joint working group has agreed to have its first meeting in January.

The additional key differences are that:

• The working group has expanded its scope to cover vegetable oils; and

• The working group will “address the challenge towards reaching Sustainable Development Goals in the vegetable oil sector, especially the importance of a holistic approach to the environment.”

This expansion of scope is key, because it ensures that when sustainable development is discussed, it is within the context of the United Nations Sustainable Development Goals, and not a narrow definition of sustainability that might focus on a single issue such as biodiversity or deforestation. This is underlined by reference to a ‘holistic approach to the environment’, meaning all aspects of environmental management.

In addition, the expansion to ‘vegetable oils’ means that it is now possible for the discussion to include comparisons of the environmental footprint of palm oil with other vegetable oils using a ‘holistic approach’. This means that the discussion will not simply be isolated to indirect land use change and associated emissions, but will now include discussion on rapeseed and sunflower, grown almost exclusively in Western and Eastern Europe.

It is well understood that the inputs required and the environmental footprint of palm oil is much lower than other vegetable oils such as rapeseed and sunflower.

Finally, placing the discussion within the context of the SDGs adds another element: trade.

Trade is a key part of the SDGs and Agenda 21, specifically the promotion of ‘sustainable development through trade liberalisation.’

In other words, the discussion around palm oil between ASEAN and the EU should itself now be holistic.

The first test of Europe’s commitment to the Ministerial communique is upon us.

In 2021, the European Union will consider a wide-ranging ‘Forest Regulation’, which will include a ‘Due Diligence’ measure. The EU will have a choice: to pursue a regulatory approach that is based on legality – rather than sustainability, respects mutual recognition and supports national standards such as the Indonesia Sustainable Palm Oil (ISPO) as the starting point for sustainability for Indonesian palm oil or will they pursue a path that does not uphold the agreement of the communique. 

The first meeting of the joint working group is now less than two months away. It will open a new channel for dialogue for ASEAN and the EU on palm oil. Let’s see.

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